FORM 10-Q | ||||||||||||||
[x] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||
For the quarterly period ended September 30, 2009 | ||||||||||||||
OR | ||||||||||||||
[ ] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||
Commission File Number: 1-31771 | ||||||||||||||
MEDLINK INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) | ||||||||||||||
Delaware | 41-1311718 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||||||||||
1 Roebling Court, Ronkonkoma, NY 11779 (Address of principal executive offices) | ||||||||||||||
631-342-8800 (Issuer’s telephone number) | ||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X]No [ ] | ||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): | ||||||||||||||
[ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Accelerated filer | ||||||||||
[ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Accelerated filer | |||||||||||
[ ] Large accelerated filer | [ ] Large accelerated filer | [ ] Accelerated filer | ||||||||||||
[ ] Large accelerated filer | [ ] Accelerated filer | |||||||||||||
[ ] Non-accelerated filer | [X] Smaller reporting company |
[ ] Large accelerated filer | [ ] Accelerated filer | |
[ ] Non-accelerated filer | [X] Smaller reporting company |
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: as of November 15, 2009 there were 27,060,470 Class A and 5,361,876 Class B shares outstanding.
MEDLINK INTERNATIONAL, INC.
FORM 10-Q
INDEX
Item | Page | |
Part I. | FINANCIAL INFORMATION | |
Part II. | OTHER INFORMATION | |
Ex. 31.1 | Section 302 Certification of Chief Executive Officer | |
Ex. 31.2 | Section 302 Certification Chief Financial Officer | |
Ex. 32.1 | Section 906 Certification Chief Executive Officer | |
Ex. 32.2 | Section 906 Certification of Chief Financial Officer | |
2
MEDLINK INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008 |
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
(unaudited) | ||||||||
Current Assets: | ||||||||
Cash | $ | 35,672 | ||||||
Accounts Receivable | 129,594 | 20,731 | ||||||
Due from related party | (350 | ) | - | |||||
Inventory | 2,818 | 2,818 | ||||||
Deposits | 9,165 | 9,165 | ||||||
Total current assets | 176,899 | 32,714 | ||||||
Office equipment (at cost) net of accumulated depreciation | 147,687 | 179,025 | ||||||
Intangible asset (at cost), net of accumulated amortization | 30,278 | 40,450 | ||||||
Goodwill | 879,326 | 975,000 | ||||||
Security deposit | 18,350 | 20,438 | ||||||
Other assets | 54,070 | 5,400 | ||||||
Total Assets | $ | 1,306,609 | $ | 1,253,027 | ||||
See accompanying notes to consolidated financial statements
3
MEDLINK INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED) SEPTEMBER 30, 2009 (UNAUDITED) AND 2008 |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | September 30, | December 31, | ||||||
2009 | 2008 | |||||||
(unaudited) | ||||||||
Curent liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 428,456 | $ | 403,277 | ||||
Bank overdraft | - | 26,834 | ||||||
Deferred revenue | 70,384 | 70,384 | ||||||
Current portion of capitalized lease payable | 5,500 | 5,500 | ||||||
Note payable | 642,005 | 701,145 | ||||||
Due to related party | 1,042,397 | 1,002,988 | ||||||
Total current liabilities | 2,188,743 | 2,210,138 | ||||||
Total liabilities | 2,188,743 | 2,210,138 | ||||||
Stockholders' deficit: | ||||||||
Common stock Class A $.001 par value; authorized 150,000,000 shares; 27,060,470 and 26,947,333 shares issued, respectively | 27,060 | 26,947 | ||||||
Common stock B Class B $.001 par value; authorized 50,000,000; 5,361,876 issued and outstanding | 5,362 | 5,362 | ||||||
Subscription receivable | (300,000 | ) | (300,000 | ) | ||||
Additional paid-in capital | 17,740,262 | 17,094,371 | ||||||
Accumulated deficit | (18,224,266 | ) | (17,653,240 | ) | ||||
Treasury stock | (130,551 | ) | (130,551 | ) | ||||
Total stockholders' deficit | (882,133 | ) | (957,111 | ) | ||||
Total stockholders’ liabilities and stockholder equity | $ | 1,306,609 | $ | 1,253,027 |
See accompanying notes to consolidated financial statements
4
MEDLINK INTERNATIONAL INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2009 (UNAUDITED) and 2008 |
For the three months | For the nine months | |||||||||||||||
Ended | Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Sales | $ | 129,543 | $ | 105,606 | $ | 389,514 | $ | 374,125 | ||||||||
Cost of Revenues | - | 15,673 | 3496 | 15,673 | ||||||||||||
Gross Profit | 129,543 | 89,933 | 386,018 | 358,452 | ||||||||||||
Operating expenses: | ||||||||||||||||
Operating and administrative | 115,150 | 1,058,998 | 924,156 | 2,514,642 | ||||||||||||
Depreciation and amortization | 2,085 | - | 32,190 | 22,443 | ||||||||||||
Total Operating expenses | 117,235 | 1,058,998 | 956,346 | 2,537,085 | ||||||||||||
Net Profit/(Loss) | $ | 12,308 | $ | (969,065 | ) | $ | (570,328 | ) | $ | (2,178,633 | ) | |||||
Basic and diluted loss per share (Class A) | $ | 0.0004 | $ | (0.04 | ) | $ | (0.02 | ) | $ | (0.08 | ) | |||||
Basic and diluted loss per share (Class B) | $ | 0.002 | $ | (0.18 | ) | $ | (0.11 | ) | $ | (0.41 | ) | |||||
Weighted average number of basic shares outstanding (Class A) | 27,060,470 | 25,840,944 | 26,805,987 | 25,840,944 | ||||||||||||
Weighted average number of basic shares outstanding (Class A) | 5,361,876 | 5,361,876 | 5,361,876 | 5,361,876 | ||||||||||||
See accompanying notes to consolidated financial statements
5
MEDLINK INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 (UNAUDITED) AND 2008 | ||||||||
For the nine months ended September 30, | ||||||||
2009 | 2008 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (570,328 | ) | $ | (2,178,633 | ) | ||
Adjustment to reconcile net loss to cash flows used in operating activities: | ||||||||
Depreciation | 30,105 | 22,443 | ||||||
Amortization and deferred charges | (901 | ) | (1,364,335 | ) | ||||
Share based compensation | 646,004 | 2,056,443 | ||||||
Accounts receivable | (108,863 | ) | (80,865 | ) | ||||
Accrued expense and other current liabilities | 24,482 | (21,682 | ) | |||||
Issuance of common shares for consulting and other services rendered | 2,056,446 | |||||||
Security Deposits | (12,950 | ) | - | |||||
Other Assets | (33,632 | ) | 11,847 | |||||
Net Cash used in operating activities | (26,083 | ) | (683,519 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of fixed assets | - | (69,700 | ) | |||||
Purchase of intangible assets | - | (6,945 | ) | |||||
Adjustment to net fixed assets | 12,306 | - | ||||||
Writedown of goodwill | 95,674 | - | ||||||
Net cash provided by (used in) investing activities | 107,980 | (76,645 | ) | |||||
Cash flows from financing activities: | ||||||||
Issuance of common stock | - | 6,241 | ||||||
Bank overdraft | (26,834 | ) | - | |||||
Repayment of loans | (59,140 | ) | 600,281 | |||||
Advanced from officer/shareholders | 39,749 | 39,372 | ||||||
Increase in lease payable | - | 5,500 | ||||||
Proceeds from loan payable | - | (98,500 | ) | |||||
Write off of intercompany receivable | - | (287,168 | ) | |||||
Proceed from common stock | - | 490,000 | ||||||
Net cash flows provided by financing activities | (46,225 | ) | 755,726 | |||||
Net increase (decrease) in cash | 35,672 | (4,438 | ) | |||||
Cash-at beginning of period | - | 7,200 | ||||||
Cash-at end of period | 35,672 | 2,762 |
See accompanying notes to consolidated financial statements
6
MEDLINK INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 (UNAUDITED) AND 2008 |
For the nine months ended September 30, | ||
2009 | 2008 | |
Supplemental disclosures of cash flows information: | ||
Interest | $0 | $0 |
Income taxes | $0 | $0 |
Non-cash financing activities:
Reference is made to financial statements notes for certain non-cash financing
activities.
See accompanying notes to consolidated financial statements
7
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2009 (UNAUDITED) |
Nature of Business
MedLink International Inc. (the “Company”) is a healthcare information enterprise system business focused on the physician sector. The Company is in the business of selling, implementing and supporting software solutions that provide healthcare providers with secure access to clinical, administrative and financial data in real-time, allowing them to improve the quality, safety and efficiency in the delivery of healthcare services.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Interim Financial Statements
The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and nine month period ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. For further information, refer to the financial statements and footnotes thereto included in our Form 10-K/A Report for the fiscal year ended December 31, 2008.
In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of September 30, 2009, the results of operations for the three months ended September 30, 2009 and 2008, and the cash flows for the nine months ended September 30, 2009 and 2008, have been included. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year. In accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification™ (“ASC”) Topic 855, Subsequent Events, or ASC 855, the Company evaluated all events or transactions that occurred after September 30, 2009 through the date of this report, which represents the date the consolidated financial statements were issued. During this period the Company did not have any material recognizable subsequent events, except for events disclosed herein.
8
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Depreciation and Amortization
Property and equipment are recorded at cost. Depreciation on equipment, furniture and fixtures and leasehold improvements is computed on the straight-line method over the estimated useful lives of such assets between 3-10 years. Maintenance and repairs are charged to operations as incurred.
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEPTEMBER 30, 2009 (UNAUDITED) |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Evaluation of Long Lived Assets
Long-lived assets are assessed for recoverability on an ongoing basis. In evaluating the fair value and future benefits of long-lived assets, their carrying value would be reduced by the excess, if any, of the long-lived asset over management’s estimate of the anticipated undiscounted future net cash flows of the related long-lived asset.
Goodwill and Intangible Assets
The Company accounts for its goodwill and intangible assets pursuant to Statement of Financial Accounting Standards (SFAS) 142, "Goodwill and Other Intangible Assets". According to the Codification ASC Topic 350, formerly under SFAS 142, intangibles with definite lives continue to be amortized on a straight-line basis over the lesser of their estimated useful lives or contractual terms. Goodwill and intangibles with indefinite lives are evaluated at least annually for impairment by comparing the asset's estimated fair value with its carrying value, based on cash flow methodology.
The Company’s intangible assets including goodwill are subject to impairment testing in the event of certain indicators. Impairment in the carrying value of an asset is recognized whenever anticipated future cash flows (undiscounted) from an asset are estimated to be less than its carrying value. The amount of the impairment recognized is the difference between the carrying value of the asset and its fair value.
Accounting for Stock-Based Compensation
According to ASC Topic 505 of the Codification compensation costs related to share-based payment transactions should be recognized in the statement of operations. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be re-measured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. The Company used the black-scholes option pricing model for estimating the fair value of the options granted under the company’s incentive plan.
9
Income Taxes
According to ASC Topic 740, formerly Under SFAS 109 “Accounting for Income Taxes”, the Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expenses are expected to be settled in the Company’s income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. Accordingly, for Federal and state income tax purposes, the benefit for income taxes has been offset entirely by a valuation allowance against the related federal and state deferred tax asset.
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEPTEMBER 30, 2009 (UNAUDITED) |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company also considers ASC Topic 740, formerly FIN 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” when determining the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax return. There were no uncertain tax positions expected to be taken by the Company as of September 30, 2009.
Net Loss Per Share
Net loss per share, in accordance with the provisions of ASC Topic 260, formerly SFAS 128, “Earnings Per Share” is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the period. Common Stock equivalents have not been included in this computation since the effect would be anti-dilutive.
Revenue Recognition
MedLink’s revenues are derived from Subscription Contracts (including software license, support and maintenance), Professional Services (including implementation, integration, and training); and the sale of computer hardware.
The Company recognizes revenues in accordance with the provisions of ASC Topic 605, formerly Staff Accounting Bulletin ("SAB") 104 "Revenue Recognition,". SOP 97-2 and SAB 104, as amended, require among other matters, that there be a signed contract evidencing an arrangement exists, delivery has occurred, the fee is fixed or determinable, collectability is probable, and remaining obligations under the agreement are insignificant.
10
Recent Accounting Updates
In June 2009, the Financial Accounting Standards Board (FASB) issued its final Statement of Financial Accounting Standards (SFAS) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a Replacement of FASB Statement No. 162”. SFAS No. 168 made the FASB Accounting Standards Codification (the Codification) the single source of U.S. GAAP used by nongovernmental entities in the preparation of financial statements, except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws, which are sources of authoritative accounting guidance for SEC registrants. The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing U.S. GAAP pronouncements into roughly 90 accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance. The Codification supersedes all existing non-SEC accounting and reporting standards and was effective for the Company beginning July 1, 2009. Following SFAS No. 168, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead, it will issue Accounting Standards Updates (ASU). The FASB will not consider ASUs as authoritative in their own right; these updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification.
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEPTEMBER 30, 2009 (UNAUDITED) |
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In August 2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”. The update provides clarification that in circumstances, in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. The amendments in this ASU clarify that a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this ASU is effective for the first reporting period, including interim periods, beginning after issuance. The adoption of this standard did not have a material impact on the Company’s financial position and results of operations.
In September 2009, the FASB issued ASU 2009-06, Income Taxes (Topic 740), ”Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities”, which provides implementation guidance on accounting for uncertainty in income taxes, as well as eliminates certain disclosure requirements for nonpublic entities. For entities that are currently applying the standards for accounting for uncertainty in income taxes, this update shall be effective for interim and annual periods ending after September 15, 2009. For those entities that have deferred the application of accounting for uncertainty in income taxes in accordance with paragraph 740-10-65-1(e), this update shall be effective upon adoption of those standards. The adoption of this standard is not expected to have an impact on the Company’s financial position and results of operations since this accounting standard update provides only implementation and disclosure amendments.
In September 2009, the FASB has published ASU No. 2009-12, “Fair Value Measurements and Disclosures (Topic 820) - Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. This ASU amends Subtopic 820-10, “Fair Value Measurements and Disclosures – Overall”, to permit a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This ASU also requires new disclosures, by major category of investments including the attributes of investments within the scope of this amendment to the Codification. The guidance in this Update is effective for interim and annual periods ending after December 15, 2009. Early application is permitted. The adoption of this standard did not have an impact on the Company’s financial position and results of operations.
11
In October 2009, the FASB has published ASU 2009-13, “Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements”, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than as a combined unit. Specifically, this guidance amends the criteria in Subtopic 605-25, “Revenue Recognition-Multiple-Element Arrangements”, for separating consideration in multiple-deliverable arrangements. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method and also requires expanded disclosures. The guidance in this update is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEPTEMBER 30, 2009 (UNAUDITED) |
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of its liabilities in the normal course of business. Through September 30, 2009, the Company had incurred cumulative losses of approximately $18,224,226. As of September 30, 2009, the Company has negative working capital of approximately $2,011,844.
Management plans to take the following steps that it believes will be sufficient to provide the Company with the ability to continue in existence. (i) Management intends to continue to raise additional financing through private equity or debt financing to pay down Company debt and/or reduce the cost of debt service. (ii) Management is also planning to continue to finance the company using their own personal funds or using the equity that they personally own in the company. (iii) Management intends to increase revenues and is actively pursuing additional contracts in several markets.
NOTE 3 - PROPERTY AND EQUIPMENT
As of September 30, 2009, a summary of property and equipment and the estimated useful lives used in the computation of depreciation is as follows:
Estimated Useful Life (years) | Amount | |
Furniture and fixtures | 5 | $33,425 |
Leasehold improvements | 3 | 11,073 |
Equipment | 5 | 252,855 |
297,353 | ||
Less accumulated depreciation | 149,665 | |
$147,688 |
Depreciation expense for the periods ended September 30, 2009 and 2008 was $32,190 and $22,443, respectively. Amounts include amortization expense associated with equipment under capital leases.
12
NOTE 4 - LOAN PAYABLE - RELATED PARTIES
The Company, as of September 30, 2009, has loans due to three of its employees/shareholders in the amount of $1,042,397. These loans are payable on demand and are non-interest bearing.
NOTE 5 – NOTE PAYABLE
The Company purchased 130,000,000 shares of Anywhere MD, Inc.’s stock from the majority shareholder of Anywhere MD., Inc. in exchange for a note in the amount of $875,000. As of September 30, 2009 $509,825 was due on demand. This note is non-interest bearing.
MEDLINK INTERNATIONAL INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEPTEMBER 30, 2009 (UNAUDITED) |
NOTE 6 - COMMITMENTS AND CONTINGENCIES
In February 2009 the company entered into a rental lease agreement for its corporate headquarters in Ronkonkoma, New York which expires on February 28, 2014.
Minimum annual lease commitments are as follows:
Year ended December 31,
2009 $19,425
2010 80,780
2011 84,486
2012 88,184
2013 91,880
2014 15,416
13
Business Overview
MedLink International, Inc. (“MedLink” or the “Company”) sells and supports a healthcare information enterprise system for physician practices, including a practice management and electronic health record (“EHR”). MedLink’s core product offering is the CCHIT Certified 08 Ambulatory EHR, MedLink TotalOffice EHR, a healthcare information enterprise system that provides physician practices with an entire practice management, clinical decision support and EHR solution. MedLink’s TotalOffice EHR is priced below competing products with similar comprehensive services. MedLink also offers a “lite” version of its application, EHR Lite, which provides physicians with basic EHR functionality at no cost to physicians. The MedLink EHR Lite is offered for physicians through affiliated radiology and laboratory, with the focus of upgrading physicians to the TotalOffice EHR. Through a business partnership, MedLink offers physician practices complete billing, collection, consulting services and use of the TotalOffice EHR, all for a fixed fee.
MedLink’s business strategy is to build critical mass and develop a national presence among small to medium sized physician practices (1 to 20 physicians) by increasing market penetration of the EHR Lite and the TotalOffice EHR. Our strategy is to help physicians select the MedLink EHR Lite as they transition towards full EHR adoption. As part of its growth strategy, MedLink has applied for inclusion as a preferred vendor to a number of Regional Health Information Networks (“RHIOs”) and has partnered with medical societies, radiology centers and laboratories, as well as value-added resellers. MedLink’s strategic partnerships provide a framework for physician adoption of EHR and a captive audience for a focused sales and marketing plan.
MedLink saw its first profitable period during the 3rd quarter of 2009. MedLink is poised for continued growth as the market demand for EHRs has never been more promising given the number of government initiatives to promote adoption of EHRs by healthcare providers. President Obama considers healthcare information technology as a key piece of his plan to fix the nation’s ailing healthcare system and in February 2009, signed the federal stimulus bill which provides more than $35 billion of incentives to help healthcare organizations acquire healthcare information technology. Recent and existing government programs provide funds that represent significant income opportunities for existing EHR users and new EHR adopters.
MedLink is well positioned to capitalize on the demand trend for EHR adoption. MedLink has been selected and is currently working with various not-for profit and government agencies that assist physician practices with the adoption of EHR technology through significant grants up to as much as 85% of the overall cost of the license, training and implementation. Additionally, as of the date of this report MedLink is only one of 4 EHR vendors to reach the 3rd and final phase of the CMS EHR PQRI testing program which will go into effect in January of 2010. As it is likely that the submission of PQRI data to CMS (Medicare and Medicaid) will be one of the foundations for “meaningful use” for physicians to qualify for the $44k-$65k incentives, participation in the CMS PQRI EHR program is likely to present a significant competitive advantage for the Company.
The Company is headquartered in Ronkonkoma, NY with an office Hyderabad, India. The Company’s web site address is www.medlinkus.com.
14
Business Environment
Economic Stimulus Package Provides Incentives for Physicians to Adopt EHRs
MedLink’s TotalOffice EHR is well-positioned to be a beneficiary of the recently enacted stimulus bill, the American Recovery and Reinvestment Act of 2009 (“ARRA”), which provides incentives for office-based physicians and other providers to adopt electronic health records. Physicians can qualify under either the Medicare or Medicaid provision of ARRA. The Medicare provision includes incentives of up to $44,000 per physician over a 5-year period. The Medicaid provision includes incentives of up to $65,000 per physician over a 6-year period. The funds become available for office-based physicians on January 1, 2011. In order to qualify for incentives, physicians must demonstrate “meaningful use” of a certified EHR. “Meaningful use” is not yet defined, but will likely be defined as measurable results that demonstrate quality, safety and efficiency improvements. The certification requirements, also not yet defined, are likely to be based on the standards adopted by CCHIT and framed around the PQRI data submitted directly to the Centers of Medicare and Medicaid Services (“CMS”).
Medicare Provision: Beginning in 2011, office-based physicians who are “meaningful users” of certified EHRs are entitled to receive up to $44,000 of total Medicare incentive payments over 5 years, from 2011 to 2015. The structure of the maximum incentives physicians can receive is as follows: $15,000 the first year, $12,000 the second year, $8,000 the third year, $4,000 the fourth year and $2,000 the fifth year. Additionally, office-based physicians can qualify for a one-time, “early adopter” incentive of $3,000 if they qualify for the program in 2011 or 2012.
Medicaid Provision: Beginning in 2011, office-based physicians who qualify under the Medicaid provision could collect a total of $65,000, calculated as 85% of EHR costs not exceeding $25,000 in the first year, followed by 85% of annual costs not exceeding $10,000 over the next five years. To be eligible under this provision, office-based physicians must demonstrate “meaningful use” of a certified EHR, and more than 30% of their cases must be attributed to Medicaid, or 20% of their cases attributable to pediatrics. Office-based pediatricians are eligible to receive up to two-thirds of the maximum payment.
Office-based physicians who do not adopt EHR technology by 2015 will see their Medicare payments reduced by 1% in 2015, 2% in 2016, 3% in 2017 and beyond. In 2018 and beyond, the HHS Secretary may decrease one additional percentage point per year (maximum of 5%) contingent upon the levels of overall EHR adoption in the market.
MedLink is particularly well positioned among competing EHR vendors when physicians decide to buy an EHR under this funding incentive. MedLink’s TotalOffice EHR is one of the lowest cost applications in the market, is directly connected to CMS for PQRI submission, and is an approved EHR for New York State subsidies through various RHIO and not-for-profit programs.
15
Status of Operations
Regional Health Information Networks
As part of its growth strategy to expand its customer base and rapidly increase revenues, MedLink has applied for inclusion as a preferred vendor to a number of RHIOs. RHIOs are quickly becoming key intermediaries to support federal and state financial incentive programs by allocating subsidies and grants to physicians to pay for EHR software and installation. MedLink submitted a number of Requests for Quotations at the beginning of 2009 and has been selected as a preferred vendor by some programs and is still in the final evaluation process for a number of other RHIO and RFQ programs.
MedLink views the RHIO program as a significant key to its rapid growth, and since the inception of the marketing program of select RHIO subsidized programs for physicians, the company has seen request submissions grow exponentially with more bookings in the first week alone than the Company had received all year.
New York City Department of Health
The NYC DOH has a number of initiatives underway to promote the adoption of EHRs in order to collect patient data. As a normal part of its business strategy, MedLink has been in active discussions with the NYC DOH to participate in these initiatives and to promote the installation EHRs as one means for the NYC DOH to accomplish their objectives. MedLink has already established the required protocols for Physicians Measure Reporting as well as specific Syndromic Reporting and is working with the NYC DOH on a number of other initiatives.
Billing Services Partnership
MedLink has partnered with multiple billing companies to offer a complete billing and collection service offering. Billing companies have realized the significant market opportunity of EHRs and the need for the billing industry to align themselves with a CCHIT-certified EHR. The billing companies provide full billing and collections services as well as complete medical office management and group purchasing. MedLink’s partnerships represent a compelling business opportunity as the Company is able to offer a physician practice a CCHIT-certified EHR within a bundled practice management and billing service offering all for a fixed fee with no capital outlay for the TotalOffice EHR by the physician. There are a number of business competitors who are successfully offering this service, and with these partnerships, MedLink will have a more competitive and comprehensive service offering.
Recent Business Developments
MedLink in CMS PQRI 2009 EHR Testing Program
In April 2009, MedLink and its CCHIT 2008 certified MedLink TotalOffice EHR 3.1 was selected by CMS to participate in the Physician Quality Reporting Initiative (“PQRI”) 2009 EHR Testing Program. PQRI is a voluntary quality reporting program that offers financial incentives to eligible healthcare providers. The program provides for the payment of up to 2% of the total allowed charges for covered Medicare Physician Fee Schedule services to eligible healthcare professionals who successfully report PQRI quality measures. PQRI reporting focuses on quality of care measures, such as prevention, chronic care management, acute episode of care management, procedural related care, resource utilization and care coordination. The 2% PQRI payments are in addition to the 2% e-prescribing incentive available to physicians who utilize e-prescriptions tools, available through MedLink’s TotalOffice EHR. MedLink is one of 10 healthcare IT vendors, and only 1 of 9 commercial EHR companies selected to test EHR’s as a tool to facilitate simplifying physician reporting under PQRI.
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The PQRI EHR program was recently approved and will go into effect starting January of 2010. Upon completion of Phase 3, MedLink will become one of a select few EHR systems approved by CMS to submit EHR data directly to CMS. This ability should positively influence physicians when deciding among competing EHR vendors to select MedLink as PQRI benefits include increased revenue, better quality reporting, improved productivity and enhanced competitive position. This is another example of how MedLink differentiates itself and puts its technology in the same league as industry leaders. The CMS Project is significant because of the focus on healthcare cost reduction through technology and preventative care. MedLink will give physicians who use MedLink’s products the ability to directly report Quality Measures directly to CMS. This connection allows those physicians to save time and collect money available for such programs much more efficiently.
Regional Health Information Organizations (RHIO)
Currently the MedLink TotalOffice EHR and its related services are at various stages of the selection process with New York Metropolitan area RHIOs including the Interboro RHIO, E-Health Network of Long Island RHIO, Primary Care Information Project (PCIP), Long Island Information Exchange (LIPIX), New York Clinical Information Exchange (NYCLIX) and Brooklyn Health Information Exchange (BHIX). The above referenced RHIO’s have received collectively more than $108 million in HEAL funding and the Company’s current project status vary between the RHIO’s from contract execution and current marketing and rollout, final contract negotiation, integration into the RHIO Health Information Exchange, pilot programs and proof of concepts.
The New York State RHIOs referenced above are funded through HEAL grants. It is anticipated that in 2009 HEAL 10 funds will be granted to support EHR adoption across all regions of New York State. The focus is to coordinate clinical care by supporting and connecting care givers through a PCMH model and the implementation of interoperable health record systems that are linked through the Statewide Health Information Network.
HEAL 10 is building on previous funding programs for information technology and helping to position New York to take maximum advantage of upcoming ARRA stimulus funding. These projects will allow New York to gain critical knowledge and experience in many challenging aspects of implementation including the area of "meaningful use" of information technology that will allow us to better support providers in New York State so they can maximize access to federal stimulus incentive funds.
As a New York based CCHIT Certified 08 Ambulatory EHR Company, MedLink believes that the Company is well positioned to take advantage of the nation’s most aggressive state-wide healthcare IT initiative.
Labs and Imaging Centers
The Company continues to enter into agreements with Labs and Imaging centers. During the 3rd quarter the company signed affiliation agreements with 2nd largest imaging center in New York and one of the largest labs that collectively service more than 5,000 physicians. These partnership and affiliation agreements provide for the centers to market the MedLink TotalOffice EHR and EHR Lite to their referring physician base and assist their physicians in subsidizing the cost of the MedLink TotalOffice EHR under the guidelines of satisfying the electronic health record Stark exception and the EHR anti-kickback safe harbor and pay to integrate their respective lab and radiology systems into the office based EHR of their referring physicians.
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Appointment of Dr. Abha Agrawal to Medical Advisory Board
In July 2009, Abha Agrawal, MD, FACP joined the MedLink Medical Advisory Board. Dr. Agrawal is a nationally recognized leader in healthcare IT and serves on important national and regional organizations including as a Commissioner on the Certification Commission on Healthcare Information Technology and a Board Member on New York Clinical Information Exchange (NYCLIX). She was also elected as the 2008 President of Medical Informatics New York, an association of physician leaders in informatics from hospitals, academia and corporations. Dr. Agrawal is the Interim Medical Director of Kings County Hospital Center, Brooklyn, NY. Prior to this role, she was the Chief Medical Information Officer of the Central Brooklyn Family Health Network (CBFHN) and the Associate Medical Director of Kings County Hospital. She is also an Associate Professor of Medicine as well as Medical Informatics at SUNY Downstate Medical Center.
Under her leadership, Kings County has been awarded a number of quality improvement awards driven by clinical information systems. She was responsible for providing thought leadership as well as hands-on-management of the clinical information systems. Prior to coming to Brooklyn, she was the Informatics Coordinator for the VISN1, an integrated network of hospitals and clinics in six New England states. She was appointed as a clinical faculty at Harvard Medical School and as a research scientist at the Brigham and Women’s Hospital.
Value-Added Resellers Program
During the 2nd quarter of 2009, MedLink formalized a program for value-added resellers (“VAR”) of its TotalOffice EHR application. MedLink views VARs as a cost effective way to build its sales and marketing efforts without incurring the direct cost of hiring a large sales force. MedLink added a 3rd VAR in the third quarter and is in discussion with additional VAR’s that are under consideration.
Contractual Obligations
We have contractual obligations to maintain operating leases for property. The following table summarizes our long-term contractual obligations and commitments as of September 30, 2009:
Operating lease obligations | Total | Less Than 1 Year | 1-3 Years |
$399,596 | $78,932 | $259,000 |
The commitments under our operating leases shown above consist primarily of lease payments for our Ronkonkoma, New York corporate headquarters.
Off-Balance Sheet Arrangements
As of September 30, 2009 and December 31, 2008, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
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RESULTS OF OPERATIONS
Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008.
The Company's revenues from continuing operations for the period ending September 30, 2009 and 2008 were $129,543 and $105,606, respectively. The increase in revenue is primarily attributable to reduced increased sales in the MedLink Total Office EHR and integration fees from labs and radiology centers.
Expenses for the period ending September 30, 2009 and 2008 were $115,150 and $1,058,998, respectively. The decrease in 2009 is primarily attributable to decreased stock-based compensation expenses associated primarily with the Company’s management, consultants and healthcare legal advisors.
The Company had net profit/(loss) of $12,308 and ($969,065) for the period ending September 30, 2009 and 2008, respectively. This is the first 3-month period that the company has realized a profit, ahead of management’s goal of a profit on a cash basis of the 4th quarter of 2009. The net profit is primarily attributable to increase sales of the MedLink Total Office EHR, Lab and Radiology Integrations fee’s, the scaleback of the Company’s operations in California and decreased compensation expenses due to decreased stock-based compensation expenses.
Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008.
Our revenues from continuing operations for the nine months ended September 30, 2009 and 2008 were $389,514 and $374,125, respectively. The increase in revenue is primarily attributable to reduced increased sales in the MedLink Total Office EHR and integration fees from labs and radiology centers which are both a significantly larger percentage of the Company’s overall revenue.
Operating Expenses for the nine month period ended September 30, 2009 and 2008 were $956,346 and $2,537,085, respectively. The decrease in 2009 is primarily attributable to decreased stock-based compensation expenses associated primarily with the Company’s management, consultants and healthcare legal advisors, reduced rent and affiliated expenses, and increased efficiencies through technology.
We had net losses of ($570,328) and ($2,178,633) for the nine month period ended September 30, 2009 and 2008, respectively. The decrease in net losses resulted primarily from a decreases in compensation expenses due to decreased stock-based compensation expenses and reduced expenses as described above.
Liquidity and Capital Resources
At September 30, 2009, the Company had a working capital deficiency of ($2,011,844). While the Company believes revenue that will be earned from the sales of the MedLink EHR, integration fees from labs and imaging centers as well as recurring revenue from the maintenance and support of its applications will soon be sufficient to sustain the Company's operations, there can be no guarantee that this will be the case and that the Company will not have to raise additional capital from investors.
The Company expects to experience significant growth over the next several years. As a result of the recent federal stimulus bill, over the next two to five years, an increasing number of physicians will be adopting EHR technology. There will be billions of dollars in public and private initiatives available to facilitate a rapid movement toward adoption. The federal initiative funds will be available to vendors, such as MedLink, who have demonstrated “meaningful use” (such as under CMS PQRI reporting), complied with state EHR requirements and interoperability requirements (such as with NY RHIOs) and have current year CCHIT certification. During the 2nd quarter of 2009, MedLink terminated its investment banking engagement of Shattuck Hammond Partners. The Company’s management made the decision to terminate Shattuck Hammond in conjunction with its decision to bring its capital raising activities internally. As part of its ongoing business strategy, MedLink continues to raise additional capital to execute on its business opportunities.
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Critical Accounting Policies
We believe there are several accounting policies that are critical to the understanding of our historical and future performance as these policies affect the reported amount of revenues and expenses and other significant areas and involve management’s most difficult, subjective or complex judgments and estimates. On an ongoing basis, management evaluates and adjusts its estimates and judgments, if necessary. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingencies. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be materially different from those estimates. These critical accounting policies relate to revenue recognition, allowance for doubtful accounts, capitalized software development costs, stock-based compensation and income taxes. Please refer to Note 1 of the audited Consolidated Financial Statements for further discussion of our significant accounting policies.
The preparation of financial statements and related disclosures requires management to make judgments, assumptions and estimates that affect the amounts in the Consolidated Financial Statements and accompanying notes. Note 1 to the Consolidated Annual Report on Form 10-K for the year ended December 31, 2008 describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, goodwill impairment and long-lived asset impairments. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of the Consolidated Financial Statements.
Revenue Recognition
Revenues are derived from licensing of computer software and professional services (including implementation, integration, and training) and the sale of computer hardware. We evaluate revenue recognition on a contract-by-contract basis as the terms of each arrangement vary. The evaluation of our contractual arrangements often requires judgments and estimates that affect the timing of revenue recognized in our statements of operations. Specifically, we may be required to make judgments about:
• | whether the fees associated with our software and services are fixed or determinable; |
• | whether collection of our fees is considered probable; |
• | whether professional services are essential to the functionality of the related software; |
• | whether we have the ability to make reasonably dependable estimates in the application of the percentage-of-completion method; and |
• | whether we have verifiable objective evidence of fair value for our software and services. |
Allowance for Doubtful Accounts
In evaluating the collectability of our accounts receivable, we assess a number of factors, including a specific client’s ability to meet its financial obligations to us, as well as general factors such as the length of time the receivables are past due and historical collection experience. Based on these assessments, we record a reserve for specific account balances as well as a reserve based on our historical experience for bad debt to reduce the related receivables to the amount we ultimately expect to collect from clients. If circumstances related to specific clients change, or economic conditions deteriorate such that our past collection experience is no longer relevant, our estimate of the recoverability of our accounts receivable could be further reduced from the levels provided for in the Consolidated Financial Statements.
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Goodwill
ASC Topic 350, formerly SFAS No. 142, “Goodwill and Other Intangible Assets,” classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be performed at least annually or more frequently if events or circumstances indicate that assets might be impaired. Our acquired technology and other intangible assets determined to have definite lives are amortized over their useful lives. In accordance with SFAS No. 142, if conditions exist that indicate the carrying value may not be recoverable; we review such intangible assets with definite lives for impairment. Such conditions may include an economic downturn in a market or a change in the assessment of future operations. Goodwill is not amortized. We perform tests for impairment of goodwill annually, or more frequently if events or circumstances indicate it might be impaired. We have only one reporting unit for which all goodwill is assigned. Impairment tests for goodwill include comparing the fair value of the company compared to the comparable carrying value, including goodwill.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounting for Stock-Based Compensation
ASC Topic 505, formerly SFAS 123 (“SFAS 123(R)”) requires compensation costs related to share-based payment transactions to be recognized in the statement of operations. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be re-measured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. In 2009, the Company used the black-scholes option pricing model for estimating the fair value of the options granted under the company’s incentive plan.
Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by ASC Topic 260, formerly the Financial Accounting Standards Board (“FASB”). Diluted EPS reflects the potential dilution of securities that could share in the earnings.
Disclosure about Derivative Instruments and Hedging Activities
According to ASC Topic 815, formerly SFAS No. 161, “Disclosure about Derivative Instruments and Hedging Activities,” the objectives for using derivative instruments must be disclosed in terms of underlying risk and accounting designation.
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Determination of the Useful Life of Intangible Assets
ASC Topic 350, formerly FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets,” is used to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of the expected cash flows used to measure the fair value of the asset under FASB 141 (revised 2007) “Business Combinations” and other U.S. generally accepted accounting principles. The Company is currently evaluating the potential impact of FSP FAS 142-3 on its consolidated financial statements.
CAUTIONARY STATEMENT PURSUANT TO "SAFE HARBOR" PROVISIONS OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934
The information in this annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their businesses so long as they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements other than those statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements of MedLink International, Inc., contained herein and in the Company’s annual report for the year ended December 31, 2008 as filed on Form 10-K/A. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.
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Not applicable.
Evaluation of disclosure controls and procedures
As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officers evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, these officers concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States Generally Accepted Accounting Principles and the Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2009: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
Because of the inherent limitations in all control systems, no evaluation of internal control over financial reporting can provide absolute assurance that all control issues, if any, within our company have been detected and may not prevent or detect misstatements. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Notwithstanding the existence of the material weakness described above, management has concluded that the consolidated financial statements in this Form 10-Q fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods and dates presented.
Changes in Internal Control over Financial Reporting
Since the date of the most recent evaluation of the Company’s internal controls by the Chief Executive Officer and Chief Financial Officer, there have been no changes in the Company’s internal controls or other factors for the period covered by the subject Form 10-Q that materially affected or were likely to materially affect the Company’s internal control over financial reporting.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.
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PART II - OTHER INFORMATION
In the normal course of business, we are involved in various claims and legal proceedings. While the ultimate resolution of these currently pending matters has yet to be determined, we do not presently believe that their outcome will significantly adversely affect our financial position, results of operations or liquidity.
Not applicable.
During the third quarter of 2009, the Company entered into a subscription agreement’s with two individual accredited investors for private placements in the amount of $90,000 to purchase 150,000 shares of the Company’s Class A Common Stock at a price of $0.60 per share. The Company will use the net proceeds for working capital purposes.
Not applicable.
Not applicable.
Not applicable.
No. | Description of Exhibit | |
3(i)(1) | Restated Articles of Incorporation of MedLink International, Inc., dated December 11, 1980, incorporated by reference to Exhibit 1 on Form 10-KSB filed June 16, 2000. | |
3(i)(2) | Articles of Amendment to the Articles of Incorporation of MedLink International, Inc., dated November 17, 1988, incorporated by reference to Exhibit 1 on Form 10-KSB filed June 16, 2000. | |
3(i)(3) | Articles of Amendment to the Articles of Incorporation of MedLink International, Inc., dated October 10, 2000, incorporated by reference to Exhibit 1 on Form 10-KSB filed March 4, 2001. | |
3(i)(4) | Articles of Incorporation of MedLink International, Inc., dated October 6, 2005, incorporated by reference to Exhibit 3.1 on Form 10-KSB filed April 17, 2006. | |
3(ii)(1) | Bylaws of MedLink International, Inc., incorporated by reference to Exhibit 3.2 on Form 10-KSB filed April 17, 2006. | |
10.18 | Employment Agreement between the Company and Ray Vuono dated May 11, 2009; | |
10.19 | Employment Agreement between the Company and James Rose dated May 11, 2009; | |
10.20 | Employment Agreement between the Company and Konrad Kim dated May 11, 2009; | |
31.1 | Certification of MedLink International, Inc. Chief Executive Officer, Ray Vuono, required by Rule 13a-14(a) or Rule 15d-14(a), dated November 20, 2009.* | |
31.2 | Certification of MedLink International, Inc. Principal Financial Officer, James Rose, required by Rule 13a-14(a) or Rule 15d-14(a), dated November 20, 2009.* | |
32.1 | Certification of MedLink International, Inc. Chief Executive Officer, Ray Vuono, required by Rule 13a-14(b) or Rule 15d-14(b), dated November 20, 2009.* | |
32.2 | Certification of MedLink International, Inc. Principal Financial Officer, James Rose, required by Rule 13a-14(b) or Rule 15d-14(b), dated November 20, 2009.* | |
* Filed herewith. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MEDLINK INTERNATIONAL, INC.
Date: November 20, 2009
By: /s/ James Rose
��James Rose
Chief Financial Officer
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