UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB/A
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2002
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period From ___________ to ____________
COMMISSION FILE NUMBER: 333-57780
INTERCARE.COM-DX,INC.
----------------------
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 95-4304537
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(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
900 WILSHIRE BOULEVARD, SUITE 500, LOS ANGELES, CALIFORNIA 90017
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(Address of Principal Executive Offices)
(213) 627-8878
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and formal fiscal year, if changed since last
report)
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 and, (2) has been subject to such filing
requirements for the past 90 days. Yes ( X ) No ( )
As of September 30, 2002, InterCare.com-dx, Inc., Registrant had 12,242,792
shares of its no par value common stock outstanding. There is currently no
public market for this stock.
Page 1 of 13 sequentially numbered pages
Form 10-Q
Third Quarter 2002
Intercare.com-dx, Inc.
INDEX
PAGE
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PART I. FINANCIAL INFORMATION
Balance Sheets - September 30, 2002 3
Statements of Operations for the Nine Months
ended September 30, 2002 4
Statement of Cash Flows for the Nine Months
ended September 30, 2002 5
Notes to Financial Statements 6-8
Company Overview 9
Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-12
PART II OTHER INFORMATION
Additional Information 12
Signature 13
2
INTERCARE.COM-DX, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
Balance Sheet As At Sept. 30,
2002 2001
====== ======
ASSETS
Current assets
Cash $2,891 $ 10,225
Accounts Receivable - Net (Note 1 ) 1,385,850 1,385,850
Inventories 52,211 160,461
Prepaid Expenses - (50)
--------- -------------
Total Current Assets.. . . . . . . . . . . . . . . . 1,440,952 1,555,474
--------- -------------
Property, Plant, and Equipment
Net Accumulated Depreciation (Note 1). . . . . . 9,070
Other Assets
Cash Advance 500 500
Deferred Public Offering Costs 65,332 35,636
---------- ------------
Total Assets 1,506,784 1,601,692
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts Payable (Note 1) . . . . . . . . . . . .1,228,949 1,499,351
Others 24,300 25,692
--------- -----------
Total Current Liabilities . . . . . . . 1,253,249 1,525,043
--------- ------------
Long term liabilities . . . . . .. . . . . 31,500 16,500
---------- -----------
Total Liabilities . . . . . . . . . . . 1,284,749 1,541,543
---------- -----------
Liabilities and Stockholders' Equity
Stockholders' Equity
Common stock (100,000,000 shares authorized
no par value ; 12,230,902 shares issued and
Outstanding as of September 30, 2001 and
12,242,972 as of September 30, 2002.(Note 2) 710,078 698,089
Accumulated deficit (488,043) (637,940)
---------- ----------
Total Stockholders' Equity . . . . . . . 222,035 60,149
---------- ---------
Total Liabilities & Equity. . . . . . . . . . . . $1,506,784 $1,601,692
========== =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
INTERCARE.COM-DX, INC.
Consolidated Statement - Unaudited
STATEMENT OF OPERATIONS
For the: 3 Mos. Ended Sept. 30, 9 Mos. Ended Sept. 30,
2002 2001 2002 2001
====== ===== ====== =====
Revenues . . . . . . . . $ 0 $ 0 $ 0 $ 334,199
Less: Cost of Revenues . 263 0 16,701 (126,897)
--------- ------- --------- ----------
Gross Margin . (263) 0 (16,701) 207,302
Operating Expense. . . . - 197,600 659,906
Other Income and Expense 45 160 364,526 1,762
---------- -------- ---------- -------
Net Income . . $ (308) (197,440) 347,825 (450,841)
========= ======== ========== ========
Weighted average number of shares 12,242,792 12,230,902 12,242,792 12,230,902
$ - $ (0.002) $ .03 $ (0.004)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
INTERCARE.COM-DX, INC.
STATEMENT OF CASH FLOW
UNAUDITED
For the Nine Months Ended Sept. 30,
2002 2001
==== ====
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss). . . . . . . . . . . . . . . $ 347,825 $(450,841)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation Expense 2,986
(Increase) Decrease in
Accounts receivables . . . . . . . . . . . . . 3,835
Inventories. . . . . . . . . . . . . . . . . . (71,123)
Prepaid Expenses . . . . . . . . . . . . . . . 50
Increase(Decrease) in
Accounts Payables. . . . . . . . . . . . . . . (357,260) 489,214
-------- --------
NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . ( 9,435) (25,884)
CASH FLOW FROM INVESTING ACTIVITIES
Deferred Public Offering . . . . . . . . . . . (22,636)
Acquisition of Fixed Assets. . . . . . . . . . - -
--------- ---------
NET CASH USED IN INVESTING ACTIVITES . . . . . . . . - (22,636)
CASH FLOW FROM FINANCING ACTIVITIES
Loan From MH . . . . . . . . . . . . . . . . 10,000 16,500
Loan From Meridian Medical Group. . . . . . . . . . . 21,800
Repayment of debt . . . . . . . . . . . . . . . ( 1,000) (30,329)
Sale of Common Stock . . . . . . . . . . . . . 47,450
Proceeds from long term debt. . . . . . . . . . 358
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . 9,000 55,779
Increase (Decrease) in cash . . . . . . . . . . ( 435) 7,264
CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 3,327 2,961
----------- ----------
CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ 2,892 10,225
=========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
Notes to the Financial Statements
Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
InterCare.com-dx, Inc. formerly known as Inter-Care Diagnostics, Inc., is
organized in the State of California to pursue bio-medical software development,
as well as Internet based healthcare transactions, contents and programs
development.
The Company was originally incorporated in 1991 for the purpose of operating a
medical diagnostics laboratory and engaging in various medical services to
clients.
On June 30, 2000, the Company signed a master value added reseller agreement
with Meridian Holdings, Inc., (an affiliate), to sell and support the
now discontinued MedMaster suite of software technology. Significant terms of
this agreement are that Intercare will sell, support, implement the
MedMaster Suite of software programs, in exchange for 40% of net sales
proceeds, and 60% of recurrent revenue from software support and
implementation.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Account Receivable
The Company recognizes account receivable to the extent that revenues have been
earned, and collections are reasonably assured.
Inventory
Inventories consists of purchased computer and software products, stated at the
lower of cost or market. Cost is determined by the first-in, first-out (FIFO)
method of valuation.
Property and Equipment
Property and equipment is recorded at cost. Maintenance and repairs are charged
to expense as incurred. Major renewals and betterments are capitalized. When
items of property are sold or retired, the related cost and accumulated
depreciation is removed from the accounts and any resultant gain or loss
is included in the results of operation.
Capital assets are depreciated by the straight-line method over estimated useful
lives of the related assets, normally five (5) to seven (7) years.
Property and equipment consists of the following as of Sept. 30, 2002 and
2001:
2002 2001
===== =====
Computer Hardware & Software 0 $68,770
Less: Accumulated Depreciation 0 59,700
------- -------
0 $ 9,070
======== =======
Advertising
The company has the policy of expensing advertising costs as incurred. There
were no advertising costs charged to expense for the quarter ended Sept. 30,
2002.
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Stock-based Compensation
Non Employee Stock-based compensation plans are recorded at fair value
measurement criteria as described in SFAS 123, "Accounting for Stock-Based
Compensation", and EITF 96-18, "Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services"
Employee Stock-based compensation plans are accounted for, using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock issued to Employees". Under this method, compensation
cost is recognized based on the excess of the fair value at the grant dates for
awards under those plans, as determined by the Company's officers and
directors. On October 3, 2002, the company issued a total of 1,000,100 shares
to its' key employees as part of their bonus pay and incentive stock option
award.
Recognition of Revenues.
Revenues from sale of software are recorded upon delivery and installation
of software at customer sites. The company provides a limited amount of
post-contract customer support (PCS) at no additional charge Pursuant to
SOP 97-2, the value of the PCS component of any sale is estimated based on
vendor specific evidence of fair value (i.e. catalogue price).
Revenues in respect of the value of the PCS, are recognized as earned ratably
over the PCS period (generally 90 days).
The company provides software implementation and professional services for all
its enterprise software sold to its clients on a contractual basis.
Professional services are billed on either an hourly rate or flat rate basis,
and revenues recognized ratably over the service period, or upon completion
of related services.
Reimbursable expenses incurred on behalf of the customer are billed to the
customer, and credited against the applicable expense.
The customer has the option to purchase an implementation services from the
Company. Revenues from implementation services contracts are deferred and
recognized as earned as services are performed in contracts with hourly billing
terms; and as related services are performed or expiration of the terms of the
contract in flat rate contracts.
The customer has the option to purchase a maintenance contract from the
Company. Revenues from maintenance component are deferred and brought
recognized income ratably over the maintenance service period. Currently, there
are no such contracts in existence. The Company's proposed maintenance charges
as based on vendor specific evidence of fair value.
Software Development Cost
Software development costs are charged to current operations
Deferred Costs Related To Proposed Public Offering.
Basic and Diluted Net Loss Per Common Share.
In accordance with SFAS No. 128, "Computation of Earnings Per Share," basic
Earnings/(loss) per share is computed by dividing the net earnings available to
Common stockholders for the period by the weighted average number of common
shares outstanding during the period.
For purposes of computing the weighted average number of shares, all stock
issued with regards to the founding of the Company is considered to be "cheap
stock" as defined in SEC Staff Accounting Bulletin 4D and is therefore
counted as outstanding for the entire period.
Common equivalent shares, consisting of incremental common shares issuable upon
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the exercise of stock options and warrants are excluded from diluted earnings
per share calculation if their effect is anti-dilutive.
Note 2. RELATED PARTY TRANSACTIONS
The Company recorded an extra-ordinary income of $350,000, due to the sell of
its intellectual property rights to the source code and proto-type software
commonly know as ICE(tm) to Meridian Holdings, Inc, an affiliated
Company, with approximately 33% equity interest in the registrant, in
exchange for long term debt reduction and prepayment for software document cost.
The source code and the prototype software sold to Meridian Holdings, Inc.,
will be utilized to develop a replacement software program for the MedMaster
product, which will satisfy the needs of our current and future customers.
InterCare.com-dx, Inc.
Business Overview
InterCare.com-dx, Inc., ("InterCare") formerly known as Inter-Care Diagnostics,
Inc., is organized in the State of California. We are an innovative software
products company specializing in state-of-the-art enterprise solutions for the
healthcare IT market.
The Company is the developer of ICE(tm), a scalable healthcare software solution
that integrates every aspect of the healthcare enterprise, designed for
information tracking, error reduction, patient safety. ICE(tm)'s extensive,
scalable system flexibility allows its adaptation to clinical workflow,
operating independently in centralized and decentralized facilities. The
program features intuitive order entry, "tapering" orders, a clinical knowledge
base, digital video enhanced patient education module, real-time
electro-physiological data capture and display, voice command, voice
recognition, digital dictation module and numerous other capabilities to
complement and document the diagnostic and treatment processes, including
unlimited free-text notes.
Microsoft OCX, GRID, SQL Server and PUSH technologies are provided on ICE , and
the system provides real time information to physicians and other healthcare
providers on a need-to-know basis. Maximized information displays increase
workflow efficiency by minimizing mouse clicks and screen changes.
ICE is available for both inpatient and outpatient clinical documentations,
thus enabling healthcare providers to be able to create a life-time longitudinal
multimedia patient clinical record.
The Company has now embarked on aggressive marketing and sales efforts in other
to introduce the application into the highly competitive healthcare market. As
of this writing, no sales prospects have been closed, however, this event
represents a significant milestone in the Company's overall business plan.
The Company anticipates a significant revenue increase in future from software
Licensing royalties.
PROPERTIES
The Company's corporate offices are located at 900 Wilshire Boulevard, Suite
500, Los Angeles, California 90017. The Company is sharing an office space with
Meridian Holdings, Inc., an affiliated Company, whereby the Company is required
to pay 1/5 of the monthly rent of $5,186.27. Other property and equipment are
stated at cost. Acquisitions having a useful life in excess of one (1) year are
capitalized. Repairs and maintenance are expensed in the year incurred. Capital
assets are depreciated by the straight-line method over estimated useful lives
of the related assets.
Legal Proceedings
The Company knows of no litigation pending, threatened or contemplated, or
unsatisfied judgments against it, or any proceedings in which the Company is a
party. The Company knows of no legal actions pending or threatened or judgment
entered against any officer or director of the Company in his capacity as such.
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There has been to date no petition under the bankruptcy act or any state
insolvency law filed by or against the Company or its officers, directors or
other key personnel.
RISKS ASSOCIATED WITH MANAGING GROWTH
The Company's anticipated level of growth, should it occur, will challenge the
Company's management and its sales and marketing, customer support, research and
development and finance and administrative operations. The Company's future
performance will depend in part on its ability to manage any such growth, should
it occur, and to adapt its operational and financial control systems, if
necessary, to respond to changes resulting from any such growth. There can be no
assurance that the Company will be able to successfully manage any future growth
or to adapt its systems to manage such growth, if any, and its failure to do so
would have a material adverse effect on the Company's business, financial
condition and results of operations.
MARKET FOR COMMON STOCK
On September 13, 2002, the Company's common stock began trading on the OTCBB,
under the symbol "ICCO". The trading price have ranged from the bid of
0.02 cents to 0.03 cents, with minimal volume. The company intends to embark
on a market awareness program to inform the investing communities about the
company's products and services. There can be no assurance that such marketing
efforts will yield any dividend, in view of the current market and economic
condition.
SELECTED FINANCIAL DATA
The Company had no revenues from operations in the quarter ended Sept 30, 2002,
this compares evenly with the comparable period in 2001. The entire quarter
was devoted in conjunction with Meridian Holdings, Inc., an affiliate to
developing and testing its new family of software known as ICE(tm) scheduled to
be released during the fourth quarter of 2002.
The selected financial data set forth above should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements notes thereto.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our current
unaudited financial statements and notes, as well as the other information
included in our annual report (10KSB) for the period ended December 31, 2001, as
filed with SEC. Our discussion contains forward-looking statements that
involve risks and uncertainties, including those referring to the period of time
the Company's existing capital resources will meet the Company's future capital
needs, the Company's future operating results, the market acceptance of the
services of the Company, the Company's efforts to establish and the development
of new services, and the Company's planned investment in the marketing of its
current services and research and development with regard to future endeavors.
The Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including:
domestic and global economic patterns and trends.
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY
Long-term cash requirements, other than normal operating expenses, are
anticipated for the continued development of the Company's business plans. The
Company will need to raise additional funds from investors in order to complete
these business plans.
If we need additional capital to fund our operations, there can be
no assurance that such additional capital can be obtained or, if obtained, that
it will be on terms acceptable to us. The incurring or assumption of additional
indebtedness could result in the issuance of additional equity and/or debt which
could have a dilutive effect on current shareholders and a significant impact on
our operations.
9
RESULTS OF OPERATIONS
We have experienced, and expect to continue to experience, seasonality in our
license revenues and results of operations, with a disproportionately greater
amount of our license revenues for any fiscal year being recognized in our
fourth fiscal quarter. As a result, our first quarter revenues can be less than
those of the preceding quarter.
In some cases, the products will be sold on a consignment basis, in which case,
we only get paid by the vendor after the vendor sells the product.
Furthermore, our quarterly revenues could be significantly affected based on how
applicable accounting standards are amended or interpreted over time. Due to
these and other factors, we believe that period-to-period comparisons of our
results of operations are not meaningful and should not be relied upon as
indicators of our future performance. It is possible that in some future periods
our results of operations may be below the expectations of public market
analysts and investors. If this occurs, the price of our common stock may
decline. We will depend on the commercial success of our product suite, which
has not yet been shipped. We have generated substantially all of our revenues
from licenses and services related to current and prior versions of our product
suite.
REVENUES
For nine months period ended September 30,2002, the registrant generated
zero revenue, as opposed to $334,199 revenue for comparable period in 2001.
The decrease in revenue was due lack of sales activity during the period ended
September 30, 2002.
SALES AND MARKETING
On September 16, 2002, Meridian Holdings, Inc. (an affiliate company) announced
the release of version 3.0 of InterCare Clinical Explorer(tm) (ICE(tm)), an
innovative and robust software application designed to integrate every aspect of
the healthcare enterprise.
ICE 's extensive, scalable system flexibility allows its adaptation to
clinical workflow, operating independently in centralized and decentralized
facilities. The program features intuitive order entry, "tapering" orders,
a clinical knowledge base, digital video enhanced patient education module,
real-time electro-physiological data capture and display, voice command,
voice recognition, digital dictation module and numerous other capabilities to
complement and document the diagnostic and treatment processes, including
unlimited free-text notes.
Microsoft OCX, GRID, SQL Server and PUSH technologies are provided on ICE , and
the system provides real time information to physicians and other healthcare
providers on a need-to-know basis. Maximized information displays increase
workflow efficiency by minimizing mouse clicks and screen changes.
ICE is available for both inpatient and outpatient clinical documentations,
thus enabling healthcare providers to be able to create a life-time longitudinal
multimedia patient clinical record.
The Company has now embarked on aggressive marketing and sales efforts in other
to introduce the application into the highly competitive healthcare market. As
of this writing, no sales prospects have been closed, however, this event
represents a significant milestone in the Company's overall business plan.
PRODUCT AND CONTENT DEVELOPMENT
Software products and Internet content development expenses is anticipated to
increase significantly during the next coming year, due to website redesign and
other Internet initiative launch costs, consisting primarily of personnel and
consulting costs. The Company projects to spend over $1,000,000 during the next
12 months to fund project and content development. This is contingent upon the
Company's ability to raise funds from investors.
10
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the third quarter ended Sept 30, 2002
was $0, compared to $197,600 during the comparable period in 2001.
For nine month period ended September 30, 2002, general administrative
expenses, the Company incurred $0 compared to $659,906 in the comparable
period in 2001. Decrease in administrative expense is due to a waiver by
Meridian Holdings, Inc. of future payments for administrative services by
the registrant to offset amounts previously paid for MedMaster Software
maintenance and enhancement to Corsys Group (Israel) Limited, a wholly owned
subsidiary of Meridian Holdings, Inc., that was not delivered in the amount
of $325,000, due to the abandonment of Medmaster Software by Meridian
Holdings, Inc., following a Georgia (Altanta USA) Court decision in 2001
to award the said asset to Lockheed Martin Owego, New York, one of Sirius
Computerized Technology (Israel), Limited creditors. The Company will start
paying its bills as they become due, as soon as the $325,000 credit memo is
exhausted.
The Company anticipates future increases in general and administrative expenses
as it embarks on aggressive product development, sales and marketing.
OPERATING LOSS
As a result of the factors described above, Company expects further increases in
operating expenses for the year 2002, assuming additional funding is raised from
this offering to be used in financing future operating costs. There is no
guarantee that the Company will be able to raise additional funds to finance all
the anticipated operating costs. In absence of such funds being available, the
Company may not be able to operate, and this could have a material impact in the
overall execution of the Company's business plan.
NET LOSS
The Company had a net income of $ 347,825 or $0.03 per share for
the nine months period ended Sept 30, 2002, compared with net loss of
$450,841 or $(0.004) per share in the comparable period in 2001. The increase
in net income was due to the sale of the ICE Software source-code, and
prototype application to Meridian Holdings, Inc.
PLAN OF OPERATIONS
On September 13, 2002, the Company's common stock began trading on the OTCBB,
under the symbol "ICCO". The trading price have ranged from the bid of
0.02 cents to 0.03 cents, with minimal volume. The company intends to embark
on a market awareness program to inform the investing communities about the
company's products and services. There can be no assurance that such marketing
efforts will yield any dividend, in view of the current market and economic
condition.
On September 23, 2002, the company announced that it has appointed Messrs
Randall W. Maxey, MD, PhD, and Jude Uwaezuoke to its board of directors.
Dr. Maxey, a physician specializing in renal medicine, is chairman of the
National Medical Association Board of Trustees. Licensed to practice medicine in
California and Guam, Maxey is affiliated with a number of hospitals in the
Los Angeles area, including the Daniel Freeman Hospitals, Robert F. Kennedy
Medical Center and Cedars Sinai Medical Centers. In addition to serving as
an attending physician at the Guam Memorial Hospital (Tumuning, Guam),
he is the supervising medical director of the Los Angeles Dialysis Center and
the Premiere Pacific Dialysis Center (Dededo, Guam). A published lecturer
and award-winning presenter, Maxey received a BS in pharmacy from the
University of Cincinnati, a PhD in cardiovascular pharmacology and MD
from Howard University.
He is founder and president of the Church Health Network and serves on the
boards of various health organizations, including the Guam Renal Care
Corporation, of which he is chairman.
Mr. Jude Uwaezuoke, who has approximately 15 years of administrative,
11
marketing and financial management experience, is president of Speedy-Care
Medical Distributors (Inglewood, Calif.), a privately held wholesaler of
surgical instruments. Currently in his third year of study at West Los
Angeles University Law School, Uwaezuoke received a BS from California
State University Dominguez Hills and an MBA from West Coast University.
RECENT EVENTS
On October 24, 2002, the registrant entered into a joint product marketing
agreement with QRS Diagnostics, LLC, a Minnesota Corporation, a privately held
designer and developer of patented, software-based medical devices in computer
(PC) cards.
PART II - OTHER INFORMATION
ADDITIONAL INFORMATION
Exhibits 99.1 Certification pursuant to 18 U.S.C. section 1350 as adopted
pursuant to Section 906 of the SARBANES-OXLEY ACT OF 2002
SIGNATURES
Pursuant to the requirements of Section 12 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.
INTERCARE.COM-DX, INC.
DATE: November 14, 2002
By: /s/ Foday Sorsor Conteh
-------------------
Foday Sorsor Conteh
Vice-President Finance
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