UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 2001 Commission File Number: 333-47924
------------------ ---------
IDMEDICAL.COM, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1506325
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 Beach Drive, Unit 1, St. Petersburg, Florida 33701
- ---------------------------------------------- -----
(Address of principal executive offices) (Zip code)
(727) 822-7011
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, $.0001 par value 10,281,500
- ------------------------------ ----------
Class Number of shares outstanding at November 19, 2001
- --------------------------------------------------------------------------------
This document is comprised of 13 pages.
FORM 10-QSB
3RD QUARTER
INDEX
<Table>
<Caption>
PAGE
----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, September 30, 2001 (unaudited) ................ 3
Condensed statements of operations, three and nine months ended
September 30, 2001 and 2000 (unaudited), and June 17, 1999
(inception) through September 30, 2001 (unaudited) .................. 4
Condensed statements of cash flows, nine months ended
September 30, 2001 and 2000 (unaudited), and June 17, 1999
(inception) through September 30, 2001 (unaudited) .................. 5
Notes to condensed financial statements (unaudited) .................... 6
Item 2. Plan of Operation .............................................. 9
PART 2 - OTHER INFORMATION
Item 1. Legal Information .............................................. 10
Item 2. Changes in Securities .......................................... 10
Item 3. Defaults Upon Senior Securities ................................ 10
Item 4. Submission of Matters to a Vote of Security Holders ............ 10
Item 5. Other Information .............................................. 10
Item 6. Exhibits and Reports on Form 8-K ............................... 11
Signatures ............................................................. 13
</Table>
2
PART 1. ITEM 1. FINANCIAL INFORMATION
IDMEDICAL.COM, INC.
(A Development Stage Company)
CONDENSED BALANCE SHEET
(Unaudited)
September 30, 2001
<Table>
ASSETS
Current assets:
Cash and cash equivalents .................................................. $ 8,777
Prepaid expenses ........................................................... 2,405
------------
Total current assets 11,182
Property and equipment, less accumulated depreciation and
amortization of $22,117 .................................................... 29,706
Intangible assets, less accumulated amortization of $9,197 ..................... 247,523
Other assets ................................................................... 31,917
------------
$ 320,328
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ..................................... $ 73,083
Unearned revenue .......................................................... 468
Current maturities on capital lease obligations ........................... 5,611
Indebtedness to related parties (Note B) .................................. 30,000
------------
Total current liabilities 109,162
Long-term debt:
Capital lease obligations, less current maturities ........................ 15,231
------------
Total liabilities 124,393
------------
Shareholders' equity:
Preferred stock ........................................................... --
Common stock .............................................................. 10,281
Additional paid-in capital ................................................ 1,538,175
Outstanding common stock options .......................................... 16,708
Outstanding warrants ...................................................... 243,250
Deferred compensation ..................................................... (243,250)
Deficit accumulated during development stage .............................. (1,369,229)
------------
Total shareholders' equity 195,935
------------
$ 320,328
============
</Table>
See accompanying notes to condensed financial statements
3
IDMEDICAL.COM, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<Table>
<Caption>
July 17,
1999
Three Months Ended Nine Months Ended (Inception)
September 30, September 30, Through
----------------------------- ----------------------------- September 30,
2001 2000 2001 2000 2001
------------ ------------ ------------ ------------ -------------
Revenue, net ............................... $ 481 $ 51 $ 1,841 $ 106 $ 2,258
Operating expenses:
Stock-based compensation .............. 108,500 1,690 108,500 1,690 136,074
Selling, general and administrative ... 147,840 221,532 437,761 335,241 1,125,446
Depreciation and amortization ......... 32,788 7,703 101,046 12,265 121,014
------------ ------------ ------------ ------------ ------------
Total operating expenses 289,128 230,925 647,307 349,196 1,382,534
------------ ------------ ------------ ------------ ------------
Operating loss (288,647) (230,874) (645,466) (349,090) (1,380,276)
Interest income ............................ 356 5,921 4,310 5,921 16,652
Interest expense ........................... (929) (958) (3,460) (1,188) (5,605)
------------ ------------ ------------ ------------ ------------
Net loss before income taxes (289,220) (225,911) (644,616) (344,357) (1,369,229)
Income taxes (Note B) ...................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net loss $ (289,220) $ (225,911) $ (644,616) $ (344,357) $ (1,369,229)
============ ============ ============ ============ ============
Basic loss per common share ................ $ (0.03) $ (0.02) $ (0.06) $ (0.04)
============ ============ ============ ============
Basic weighted average common
shares outstanding .................... 10,164,833 9,143,833 10,009,278 8,881,278
============ ============ ============ ============
</Table>
See accompanying notes to condensed financial statements
4
IDMEDICAL.COM, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<Table>
<Caption>
June 17,
1999
Nine Months Ended (Inception)
September 30, Through
------------------------------ September 30,
2001 2000 2001
------------ ------------ -------------
Net cash used in operating activities ....................... $ (454,210) $ (234,160) $ (786,631)
------------ ------------ ------------
Cash flows from investing activities:
Cash paid for copyright ................................. -- (61) (485)
Cash paid for trademark ................................. -- (525) (2,460)
Cash paid for web site .................................. (123,549) (38,650) (345,935)
Cash paid for patent .................................... (2,657) (8,840) (29,457)
Cash paid for leasehold improvements .................... -- -- (2,802)
Equipment purchases ..................................... (2,400) (17,861) (19,054)
------------ ------------ ------------
Net cash used in investing activities (128,606) (65,937) (400,193)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from sale of common stock, net of
offering costs ....................................... -- 1,116,116 1,158,150
Proceeds from exercise of stock options ................. -- 6,100 6,100
Proceeds from advances from shareholders (Note B) ....... 30,000 -- 30,000
Lease payments .......................................... (5,116) (1,356) (8,649)
Contributed capital ..................................... -- 10,000 10,000
------------ ------------ ------------
Net cash (used in) provided by financing activities 24,884 1,130,860 1,195,601
------------ ------------ ------------
Net change in cash (557,932) 830,763 8,777
Cash, beginning of period ................................... 566,709 15,558 --
------------ ------------ ------------
Cash, end of period $ 8,777 $ 846,321 $ 8,777
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ............................................. $ 3,460 $ 425 $ 5,605
============ ============ ============
Income taxes ......................................... $ -- $ -- $ --
============ ============ ============
Non-cash investing and financing activities:
Equipment purchased under capital lease .............. $ -- $ 4,532 $ 4,532
============ ============ ============
</Table>
See accompanying notes to condensed financial statements
5
IDMEDICAL.COM, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A: BASIS OF PRESENTATION
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its Form 10-KSB dated December 31,
2000, and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
The Company is in the development stage in accordance with Statements of
Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises". As of September 30, 2001, the Company has
devoted substantially all of its efforts to financial planning, raising capital
and developing markets and its web site. However, on October 25, 2001, the
Company entered into an Agreement and Plan of Reorganization with ToolTrust
Corporation ("ToolTrust"), a Nevada corporation (see Note F).
Financial data presented herein are unaudited.
NOTE B: RELATED PARTY TRANSACTIONS
On August 23, 2001, three directors each advanced the Company $10,000 for
working capital. The advances are non-interest bearing and are due on demand.
The $30,000 advances are included in the accompanying unaudited, condensed
financial statements as indebtedness to related parties.
NOTE C: INCOME TAXES
The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the nine months ended September 30, 2001 resulting
in a deferred tax asset, which was fully allowed for; therefore, the net benefit
and expense resulted in $-0- income taxes.
NOTE D: SHAREHOLDERS' EQUITY
On August 3, 2001, the Company issued Juliard Communications, Inc. ("Juliard")
200,000 of the Company's common stock in exchange for visual design and
re-design work of the Company's website and computer programming (see Note E).
The market value of the common stock on the transaction date was $.31 per share.
Stock-based compensation expense of $62,000 was recognized in the accompanying
financial statements for the nine months ended September 30, 2001.
6
IDMEDICAL.COM, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
On August 3, 2001, the Company issued 150,000 shares of its restricted common
stock to its SEC attorney in exchange for legal services. The market value of
the common stock on the transaction date was $.31 per share. Stock-based
compensation expense of $46,500 was recognized in the accompanying financial
statements for the nine months ended September 30, 2001.
Following is a statement of changes in shareholders' deficit for the nine months
ended September 30, 2001:
<Table>
<Caption>
Deficit
Accumulated
Common stock Additional During the
----------------------------- Paid-in Development
Shares Par Value Capital Stage
------------ ------------ ------------ ------------
Balance, January 1, 2001 ....................... 9,931,500 $ 9,931 $ 1,430,025 $ (724,613)
August 3, 2001, shares issued in
exchange for website services ................ 200,000 200 61,800 --
August 3, 2001, shares issued in
exchange for legal services .................. 150,000 150 46,350 --
Net loss for the nine months
ended September 30, 2001 ..................... -- -- -- (644,616)
------------ ------------ ------------ ------------
Balance, September 30, 2001 10,281,500 $ 10,281 $ 1,538,175 $ (1,369,229)
============ ============ ============ ============
</Table>
NOTE E: CONSULTING AGREEMENT
On April 1, 2001, the Company entered into a consulting agreement with Juliard.
Juliard agreed to provide strategic planning, business management, advertising
and marketing consulting services in exchange for a monthly fee of $5,000. The
term of the agreement is from April 1, 2001 through September 30, 2001 and may
be extended with the consent of both parties for a second term of 12 months. The
Company paid Juliard $15,000 during the three months ended September 30, 2001.
On July 10, 2001, the parties amended the agreement. Juliard agreed to perform
additional services including visual design and re-design work of the Company's
web site and computer programming in exchange for 200,000 shares of the
Company's common stock. The Company issued 200,000 shares of its common stock to
Juliard on August 3, 2001.
NOTE F: AGREEMENT AND PLAN OF REORGANIZATION
On October 25, 2001, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with ToolTrust. Under the Agreement, the
Company would acquire 100 percent of the issued and outstanding shares of
ToolTrust common stock in exchange for 20,000,000 shares of the Company's common
stock. Upon closing, ToolTrust would become a subsidiary of the Company.
7
IDMEDICAL.COM, INC.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Closing the Agreement would result in a change in control of the Company. As
part of the closing of the Agreement, the former officers and directors of the
Company would received the following warrants to purchase the Company's common
stock:
<Table>
<Caption>
Officer/Director Warrants
---------------- --------
Richard Schaller, Sr. 166,667 @ $0.50 per share
166,667 @ $1.00 per share
166,667 @ $2.00 per share
Richard Schaller, Jr. 166,667 @ $0.50 per share
166,667 @ $1.00 per share
166,667 @ $2.00 per share
Neil A. Cox 166,667 @ $0.50 per share
166,667 @ $1.00 per share
166,667 @ $2.00 per share
</Table>
The warrants will be fully vested upon closing and exercisable for a period of
two years.
Upon closing of the Agreement, the former officers and directors of the Company
would also be retained as consultants to the Company to assist with the online
medical records operations.
8
PART I. ITEM 2. PLAN OF OPERATION
IDMEDICAL.COM, INC.
(A Development Stage Company)
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of federal
securities laws. These statements plan for or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies, statements about our need for working capital, future revenues,
results of operations and most other statements that are not historical in
nature. In this Report, forward-looking statements are generally identified by
the words "intend", "plan", "believe", "expect", "estimate", and the like.
Investors are cautioned not to put undue reliance on forward-looking statements.
Except as otherwise required by applicable securities statues or regulations,
the Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise. Because forward-looking statements involve future risks and
uncertainties, these are factors that could cause actual results to differ
materially from those expressed or implied.
PLAN OF OPERATION
The following discussion should be read in conjunction with the Company's
financial statements and notes thereto included elsewhere in this Form 10-QSB.
Except for the historical information contained herein, the discussion in this
Form 10-QSB contains certain forward looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. The Company's actual results could
differ materially from those discussed here.
On October 25, 2001, the Company and ToolTrust Corporation, a Nevada
corporation, executed an Agreement and Plan of Reorganization ("Reorganization
Agreement") which contemplates the Company acquiring 100% of the issued and
outstanding common stock of ToolTrust, in exchange for an aggregate of
20,000,000 shares of the Company's common stock at the closing of the
transaction. As a result, ToolTrust would become a wholly-owned subsidiary of
the Company. Prior to Closing, the Company plans to form a wholly-owned
subsidiary to operate the online medical records business currently conducted by
the Company.
Pursuant to the Reorganization Agreement, the officers and directors of the
Company resigned their respective positions and Robert P. Gordon, James E.
Robbins, Robert L. Evans, Joseph R. King, and Garrett J. Girvan became directors
of the Company.
Closing of the Agreement is subject to: (i) ToolTrust closing its acquisition of
ClearDialog.com, Inc. ("ClearDialog"), an applications service provider
specializing in live voice conferencing systems; (ii) LocalToolBox Corporation
("LocalToolbox"), which provides web content and website management services;
(iii) ToolTrust completing an audit of ToolTrust, ClearDialog and LocalToolbox;
and (iv) ToolTrust having available $100,000 to pay certain accrued liabilities
of the Company. There can be no assurance that Closing will occur as
contemplated or at all.
9
IDMEDICAL.COM, INC.
(A Development Stage Company)
FINANCIAL CONDITION
The Company generated minimal revenues during the quarter ended September 30,
2001. Management does not anticipate any increase in revenues until the closing
of the Reorganization Agreement, as described above. There can be no assurance
that the Company will be able to continue as a going concern, or achieve
material revenues and profitable operations. The Company requires immediate
financing, and no assurances can be given that financing will be available to
the Company in the amounts required, or that, if available, will be on terms
satisfactory to the Company.
As of September 30, 2001, the Company had total assets of $320,328 as compared
to $850,700 at December 31, 2000. The decrease was related to the Company's use
of cash during the period. During the nine months ended September 30, 2001, the
Company's cash balance decreased by $557,932. During the nine months ended
September 30, 2001, the Company used $454,210 in operating activities as
compared to $234,160 for the nine months ended September 30, 2000. The use of
cash from operating activities during 2001 consisted of the net loss and
repayment of liabilities. During the first nine months of 2001, the Company used
$128,606 in investing activities as compared to $65,937 in 2000. The Company
invested $123,549 in web site development, $2,657 in patent costs, and $2,400 in
equipment. During the first nine months of 2001, the Company increased its cash
by $24,884 through financing activities. The Company received $30,000 in
shareholder advances and made lease payments totaling $5,116.
RESULTS OF OPERATIONS
During the nine months ended September 30, 2001, the Company recorded revenue
totaling $1,841 as compared with $106 for the nine months ended September 30,
2000. The increase in revenues was a result of the Company developing its web
site and selling memberships to customers for use of the site. Operating
expenses increased from $349,196 for the nine months ended September 30, 2000 to
$647,307 for the nine months ended September 30, 2001. The operating expenses
increased due to increases in stock-based compensation, consulting, and
depreciation and amortization. The Company also began paying salaries following
the closing of its common stock offering in June of 2000. Interest income
totaled $4,310 and $5,921 for the nine months ended September 30, 2001 and 2000,
respectively. The decrease was due to the reduction in cash in the interest
bearing bank account. Interest expense totaled $3,460 and $1,188 for the nine
months ended September 30, 2001 and 2000, respectively. The increase was due to
capital leases obtained by the Company during the fourth quarter of 2000.
PART 2. OTHER INFORMATION
Items 1 through 4 - No response required.
Item 5 - Other information
On August 3, 2001, the Registrant issued 200,000 shares of its common stock to
Juliard Communications, Inc. ("Juliard") pursuant to an Amendment to Consulting
Agreement dated July 10, 2001. The common stock was issued to Juliard as an
eligible participant in the Registrant's "IDMedical.com, Inc. 1999 Stock Option
Plan." Juliard is controlled by Richard Korn, who beneficially owns 11.67% of
the Registrant's common stock.
10
IDMEDICAL.COM, INC.
(A Development Stage Company)
Item 6 - Exhibits and reports on Form 8-K
(a) Exhibits
Exhibit Number Description
2.1 Agreement and Plan of Reorganization dated October
25, 2001 by and among the Company, ToolTrust
Corporation ("ToolTrust") and certain shareholders of
ToolTrust (filed herewith).
3.1 Articles of Incorporation, as currently in effect.
(Incorporated by reference to Exhibit 3.1 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
3.2 Bylaws, as currently in effect. (Incorporated by
reference to Exhibit 3.2 of the Company's
Registration Statement on Form SB-2, File October 13,
2000).
10.1 IDMedical.com, Inc. 1999 Stock Option Plan.
(Incorporated by reference to Exhibit 10.1 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
10.2 Form of Common Stock Purchase Warrant, exercise price
$1.10. (Incorporated by reference to Exhibit 10.2 of
the Company's Registration Statement on Form SB-2,
File October 13, 2000).
10.3 Form of Common Stock Purchase Warrant, exercise price
$2.00. (Incorporated by reference to Exhibit 10.3 of
the Company's Registration Statement on Form SB-2,
File October 13, 2000).
10.4 Contract with digitalNATION - a VERIO company - Inc.
for Web Hosting as executed November 10, 1999.
(Incorporated by reference to Exhibit 10.4 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
10.5 Contract with Fastnet Corporation for Web hosting
executed October 17, 2000. (Incorporated by reference
to Exhibit 10.5 of the Company's Amended Registration
Statement on Form SB-2/A-1, File December 18, 2000).
10.6 Contract with Happy Harry's Discount Drug Stores for
establishment of a referral relationship, executed
September 7, 2000. (Incorporated by reference to
Exhibit 10.6 of the Company's Amended Registration
Statement on Form SB-2/A-1, File December 18, 2000).
10.7 Contract with Dover Family Physicians, P.A. for
establishment of a referral relationship, executed
April 14, 2000. (Incorporated by reference to Exhibit
10.7 of the Company's Amended Registration Statement
on Form SB-2/A-1, File December 18, 2000).
10.8 Consulting Agreement with Juliard Communications,
Inc. dated April 1, 2001 and as amended July 10, 2001.
(Incorporated by reference to Exhibit 10.8 of the
Company's Quarterly Report on Form 10-QSB filed
August 14, 2001).
11
IDMEDICAL.COM, INC.
(A Development Stage Company)
(b) Reports on Form 8-K
There were no reports on Form 8-K.
12
SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three and nine months ended September 30,
2001 have been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IDMEDICAL.COM, INC.
(Registrant)
DATE: November 19, 2001 BY: /s/ Robert P. Gordon
----------------- -------------------------------
Robert P. Gordon
CEO, Treasurer and Chairman of
the Board
13
INDEX TO EXHIBITS
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
2.1 Agreement and Plan of Reorganization dated October
25, 2001 by and among the Company, ToolTrust
Corporation ("ToolTrust") and certain shareholders of
ToolTrust (filed herewith).
3.1 Articles of Incorporation, as currently in effect.
(Incorporated by reference to Exhibit 3.1 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
3.2 Bylaws, as currently in effect. (Incorporated by
reference to Exhibit 3.2 of the Company's
Registration Statement on Form SB-2, File October 13,
2000).
10.1 IDMedical.com, Inc. 1999 Stock Option Plan.
(Incorporated by reference to Exhibit 10.1 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
10.2 Form of Common Stock Purchase Warrant, exercise price
$1.10. (Incorporated by reference to Exhibit 10.2 of
the Company's Registration Statement on Form SB-2,
File October 13, 2000).
10.3 Form of Common Stock Purchase Warrant, exercise price
$2.00. (Incorporated by reference to Exhibit 10.3 of
the Company's Registration Statement on Form SB-2,
File October 13, 2000).
10.4 Contract with digitalNATION - a VERIO company - Inc.
for Web Hosting as executed November 10, 1999.
(Incorporated by reference to Exhibit 10.4 of the
Company's Registration Statement on Form SB-2, File
October 13, 2000).
10.5 Contract with Fastnet Corporation for Web hosting
executed October 17, 2000. (Incorporated by reference
to Exhibit 10.5 of the Company's Amended Registration
Statement on Form SB-2/A-1, File December 18, 2000).
10.6 Contract with Happy Harry's Discount Drug Stores for
establishment of a referral relationship, executed
September 7, 2000. (Incorporated by reference to
Exhibit 10.6 of the Company's Amended Registration
Statement on Form SB-2/A-1, File December 18, 2000).
10.7 Contract with Dover Family Physicians, P.A. for
establishment of a referral relationship, executed
April 14, 2000. (Incorporated by reference to Exhibit
10.7 of the Company's Amended Registration Statement
on Form SB-2/A-1, File December 18, 2000).
10.8 Consulting Agreement with Juliard Communications,
Inc. dated April 1, 2001 and as amended July 10, 2001.
(Incorporated by reference to Exhibit 10.8 of the
Company's Quarterly Report on Form 10-QSB filed
August 14, 2001).
</Table>