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 March 31, 2004
( ) 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 DX, INC.
----------------------
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 95-4304537
------------------------------- ------------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
900 WILSHIRE BOULEVARD, SUITE 500, LOS ANGELES, CALIFORNIA 90017
----------------------------------------------------------------
(Address of Principal Executive Offices)
(213) 627-8878
----------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------------------
(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 March 31, 2004, InterCare DX, Inc., Registrant had 14,293,403 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-QSB
First Quarter 2004
InterCare DX, Inc.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Balance Sheets - March 31, 2004 2
Statements of Operations for the Three Months
Ended March 31, 2004 3
Statement of Cash Flows for the Three Months
Ended March 31, 2004 4
Notes to Financial Statements 5-7
Company Overview 8
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
Item 3 Controls and Disclosure 18
PART II OTHER INFORMATION
Item 1 Legal proceedings 19
Additional Information 19
Signature 19
2
InterCare DX, Inc
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
Balance Sheet As At March 31
2004 2003
====== ======
ASSETS
Current assets
Cash $ 437 $ 396
Accounts Receivable (Note 1 ) 1,386,350 1,386,350
Less: Allow for Doubtful Accounts 0 0
Inventories and other current assets 52,211 52,211
----------- ----------
Total Current Assets.. . . . . . . . . . . . . . . . 1,438,998 1,438,957
=========== =========
Property, Plant, and Equipment
Net Accumulated Depreciation (Note 1). . . . . . 0 0
Other Assets
Deferred Public Offering Costs 65,332 65,332
----------- ----------
Total Assets 1,504,330 1,504,289
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts Payable (Note 1) . . . . . . . . . . . $ 1,574,832 1,314,945
----------- ---------
Total Current Liabilities . . . . . . . 1,574,832 1,314,945
------------ ----------
Long term liabilities . . . . . .. . . . . 64,888 72,488
----------- ----------
Total Liabilities . . . . . . . . . . . 1,639,720 1,387,432
----------- -----------
Liabilities and Stockholders' Equity
Stockholders' Equity
Common stock (100,000,000 shares authorized
no par value ; 12,242,792 shares issued and
outstanding as at March 31, 2003 and 14,242,792
as at March 31, 2004 (Note 2) . . . . . . . . . . . 710,078 710,078
Accumulated Deficit (845,467) (593,221)
---------- ------------
Total Stockholders' Equity . . . . . . . (135,389) (116,857)
------------ ------------
Total Liabilities & Equity. . . . . . . . . . . . $ 1,504,331 1,504,289
============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
InterCare DX, Inc.
Consolidated Statement - Unaudited
STATEMENT OF OPERATIONS
For the Three Months ended March 31,
2004 2003
====== =====
Revenues . . . . . . . . $ - $ -
Less: Cost of Revenues . - -
--------- ---------
Gross Margin . - -
Operating Expense. . . . 43,622 105,216
---------- --------
Net Income . . $(43,622) $ (105,216)
========= ========
Weighted average number of shares 13,184,750 11,621,396
Weighted average earnings per share $(0.003) $ (0.009)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
InterCare DX, Inc
..
STATEMENT OF CASH FLOW
UNAUDITED
For the Three Months ended March 31,
2004 2003
==== ====
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss). . . . . . . . . . . . . . . $(43,622) $ (105,216)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation Expense - -
(Increase) Decrease in
Accounts receivables . . . . . . . . . . . . . - -
Inventories. . . . . . . . . . . . . . . . . . - -
Increase(Decrease) in
Accounts payables. . . . . . . . . . . . . . . 34,534 85,994
-------- --------
NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . (9,088) (19,222)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long term debt. . . . . . . . . . 9,000 16,688
-------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . 9,000 16,688
Increase (Decrease) in cash . . . . . . . . . . (88) (2,534)
CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 525 2,930
----------- ----------
CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ 437 $ 396
=========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
The accompanying notes are an integral part of this statement.
InterCare DX, Inc.
Notes to the Financial Statements
Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
InterCare DX, Inc., is an innovative software products development and services
company, specializing in developing healthcare management and information
systems solutions. The company markets and resells the InterCare Clinical
Explorer (ICE(tm), which is designed to integrate every aspect of the healthcare
Enterprise.
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 March 31, 2004 and
2003:
2004 2003
===== =====
Computer Hardware & Software $68,770 $68,770
Less: Accumulated Depreciation 68,770 68,770
------- -------
$ 0 $ 0
======== =======
Advertising
The company has the policy of expensing advertising costs as incurred. There
were no advertising costs charged to expense for the quarter ended March 31,
2004.
6
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 of
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.
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
Fair Value of Financial Instruments and Concentration of Credit Risk.
The carrying amounts of cash, receivables, and accrued liabilities approximates
fair value because of the immediate or short-term maturity of these financial
instruments.
Deferred Costs Related To Proposed Public Offering.
Costs incurred in connection with the proposed public offering of common stock
have been deferred and will be charged against capital if the offering is
successful or against operations if it is unsuccessful.
7
The estimated expenses of this offering in connection with the issuance and
distribution of the securities being registered, all of which are to be paid
by the Registrant, excluding commissions and fees payable to the Escrow Agent
and broker/dealers are as follows:
Registration Fee $ 6,600.00
Legal Fees and Expenses 42,233.59
Accounting Fees and Expenses 5,750.00
Printing 7,077.00
Miscellaneous Expenses 3,671.00
---------
Total $65,331.59
==========
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
the exercise of stock options and warrants are excluded from diluted earnings
per share calculation if their effect is anti-dilutive.
NOTE 2. RECENT EVENTS
On May 1, 2004 the Company issued a private placement memorandum to raise up
to $750,000. This offering is still on going. The use of proceed is for product
release and other corporate purposes.
8
InterCare DX, Inc.
Business Overview
InterCare DX, Inc. formerly known as InterCare.com dx,, is organized in the
State of California. We are an innovative software products and services company
specializing in providing healthcare management and information systems
solutions, with our main office located at 900 Wilshire Blvd., Suite 500, Los
Angeles, California, USA, and international partners located worldwide. In
business since 1991, we have created, published, and marketed software products
embedded with sound, text and video for the purpose of relaxation training and
stress management. We have also developed Internet-ready applications for
healthcare transactions management as well as medical and health-related content
and information targeted toward the education, consumer, and healthcare industry
markets.
Our Products and Services
InterCare Clinical Explorer (ICE ), is the latest product developed by InterCare
DX, Inc., an innovative enterprise level clinical documentation application
designed to integrate virtually all aspects of the health care enterprise, both
inpatient and outpatient. 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, real-time electro-physiological data capture and display,
voice command and recognition, a digital dictation module, and numerous other
capabilities to complement and document the diagnostic and treatment processes,
including unlimited free-text notes. We have signed partnership and/or reseller
agreements in place to utilize, or have plans to incorporate the following
third-party products and/or technology into ICE(tm) :
The strength of ICE application is derived from differentiated core technologies
consisting of: Mainstream SQL Database with full open architecture; human
anatomy and graphical user interfaces that simplify documentation and
information access; data mining and data query tools; end-user tool sets; and
interface capabilities to facilitate peaceful coexistence with other systems.
Benefits of ICE(tm) Products to Healthcare Payors and Providers include:
Point of Care Documentation
Applications enabling all care providers (e.g. physicians, nurses, PA's,
technologists, therapists, dieticians, etc.) to document objective and
subjective patient data at the point-of-care in a manner that enhances
compliance, reduces time, enhances communications, controls resource
utilization and enhances revenue generation.
Order entry and results reporting
Simplified multi-disciplinary communication of orders, referrals, consultations,
notes and retrieval of results including Laboratory, Radiology, Pharmacy,
Respiratory Therapy, Dietary, Physiotherapy, Nursing and the like.
Imaging and general archiving
On-line viewing, manipulation and annotation of digital images and documents
such as X-rays, CAT Scans, MRIs, Ultrasounds, digitized images, scanned paper
documents, etc. This is particularly important in emergency and urgent care
settings where speed and provider viewing and interpretation is needed to
enhance care delivery. This is the foundation for an integrated healthcare
delivery system, using both Local and Wide area networks.
9
Multi-disciplinary Clinical decision support
Provision of advanced clinical functionality including protocols, pathways, care
standards and templates that facilitate care management, resources control and
outcome management.
Clinical workflow and productivity management
Personal desktop that organizes individual user tasks, simplifies follow up and
documentation requirements, improves workflow, facilitates quality assurance and
management intervention in order to make better use of time.
Care provider communication management
On-line, simplified message routing and communication that interfaces to e-mail,
voice mail and like systems to enhance coordination and follow up among care
providers.
Central Data Repository
Aggregation of all patient-centric data in the enterprise from all legacy and
newer information systems, including Registration, ADT, lab, radiology, pharmacy
PACS, departmental systems and ICE(tm).
Medical knowledge base / lexicon
ICE Clinical Observation Language (ICOL(tm))
- --------------------------------------------
There is no single published or accepted language that comprehensively and
logically describes the discrete facts about a patient's clinical condition that
can be used scientifically to create a standardized methodology for analyzing a
myriad of clinical observations, interventions and outcome in medicine, hence
the development of ICE Clinical Observation Language vocabulary (ICOL). The
unique feature of ICOL is that it is made up of short phrases that could be
plugged-in to a note without any modification, or joined with other phrases in
the ICOL knowledge base to form a complete sentence. Developed by the InterCare
team of clinical experts, ICOL contains over 50,000 phrases and clinical
terminology which are linked to over 200,000 clinical terms and codes that could
be customized or used as-is to generate a research-quality outcome measures
without compromising the quality of clinical documentation and patient care.
ICE Clinical Observation Language (ICOL) provides the corroborating 'glue' that
ties together the outcomes, diagnoses, interventions, procedures, activities and
patient responses to care delivery into the complete scientific, granular, and
comparable clinical content.
When a significant number of patient encounters are recorded using the same
clinical vocabulary, the value of the resulting clinical information is
profound. Use of this data will facilitate unprecedented and rapid improvement
in the consistency and quality of care delivery for an individual patient. This
capability will be facilitated by the ability to accurately and consistently
measure and improve patient outcomes in response to care rendered while at the
same time reducing the cost. ICE(tm) clinical documentation provides the
necessary granularity and consistency in the recording of patient health
observations required for this process to work.
Summary of the languages implemented and supported in ICE(tm) are:
- - International Classification of Diseases (ICD-9-CM)
- - Alternative Complementary Therapy Code (ABC code)
- - CPT
- - Nursing Interventions Classification (NIC)
- - Nursing Outcome Classification (NOC)
- - NANDA
- - ICE Clinical Observation Language (ICOL(tm))
- - DSM-IV
10
- - Other Third party clinical libraries
We are currently reviewing language from SNOMED and are evaluating inclusion of
language from LOINC, the Read Codes, and other UMLS component languages
Patient Care Plans
- --------------------
The ICE system incorporates a vast vocabulary of standardized languages to
facilitate the Patient Care Planning process. An unlimited number of Care Plan
Templates can be created for retrieval to establish an individual Patient Care
Plan. The Patient Care Plan can then be personalized as required. Languages
available for Diagnoses, Procedures and Interventions, Activities, and Outcomes
in ICE Care Plans include ICOL , ICD-9, CPT, NANDA, NIC, NOC etc. User
customizable labels can also be added as required, via the knowledge base set-up
module.
Patient Outcome Management
- ----------------------------
"Outcome" is probably one of the most widely used and most poorly defined terms
in health care today. In most cases the term is used generically and
subjectively to describe the results of patient care. Unfortunately the current
measurement system is inconsistent and at much too high a level to facilitate
clear comparative measures that will result in better patient care.
Outcomes in ICE are not only an underlying basis for managing the goals and
results of care delivery, they are scientifically measured. This unique
capability is made possible through the use of ICE Clinical Observation Language
combined with comprehensively researched and published outcome languages such as
(NOC).
ICE collects and aggregates data with complete confidentiality for all
concerned, via the Clinical Knowledge Base. Using proprietary database design
techniques, ICE creates a dynamic linkage between confidential patient data and
the Clinical Knowledge Base.
Management Guidelines and Regulatory Compliance
- ---------------------------------------------------
ICE conforms to the standards for clinical documentation. Any organization using
ICE increases their ability to comply with regulations applicable to
comprehensive clinical documentation for patient assessment, care coordination,
outcome achievement, and quality improvement.
The DRG system implementation in hospitals reduced care costs for a few years.
Hospital costs are increasing again with little data available to document
improvement in outcomes. To prevent similar trends in the future, the Center for
Medicare and Medicaid Services (CMS) has already implemented cost reduction and
quality improvement requirements simultaneously to protect patient outcomes in
certain care delivery settings.
This approach, which includes fixed reimbursement for specific patient
conditions and which requires outcome reporting to electronically accompany all
claims submitted for payment, is the blueprint for the future in all health care
settings.
Legal Liability/Mal-practice Insurance Companies Providers face many forms of
legal liability, with focus in four major areas:
- - Complete and accurate clinical documentation
- - Providing the care for which they are billing
- - Delivering care that is appropriate to the patient's condition
- - Managing the balance between professional responsibility and payer
limitations.
The most critical success factor in all areas of liability is accurate, complete
and retrievable clinical documentation. Providers must be able to produce such
clinical documentation or face serious consequences. The documentation must
demonstrate that the patient's condition was thoroughly assessed, that the
11
problems being treated were clearly identified, that the care plan specifically
addressed those problems, and that the patient's status was continually
evaluated.
HIPAA further requires that, upon request, the patient must be provided with a
legible, complete and understandable copy of their medical record. ICE can help
clinicians and other Healthcare providers limit their liability and avoid legal
sanctions that potentially could result from poor clinical documentation and
incomplete medical records.
Bi-directional legacy integration middleware
Data exchange in real-time between ICE(tm) and legacy systems to facilitate
data merging, data normalization and information consolidation.
Real-time Electrophysiological and Clinical Data Acquisition
InterCare has obtained a developers license from QRS Diagnostics, inc., to
integrate their Medic Software application into ICE(tm), thus making it possible
to add such medical diagnostic data as ECG, Temperature, Weight Spirometry and
Pulse-oximetry into ICE(tm) database real-time.
Data discovery, mining and analysis
Suite of ad-hoc, programming free tools, enabling novice users experimental
"cruising" of all enterprise data in real-time.
InterCare's ICE(tm) software operates over a customizable and highly
adaptable operating environment. ICE(tm) is designed to concurrently
serve all care providers throughout the continuum-of-care from acute and
long-term care to ambulatory and home health care:
- - The various medical professions (i.e. physician, nurse, therapists,
technologists, dietician, etc.)
- - The various medical specialties (i.e. Primary care, OB/Gyn, Pediatrics,
Surgery, etc.)
- - The various facility types (i.e. acute care, ambulatory care, long term
care and home care)
ICE(tm) can seamlessly integrate with legacy systems (utilizing any
off- the- shelf interface engine) through both HL7 and proprietary legacy
interfaces. A 12-tier security paradigm offers industry leading confidentiality
and control of information. Security "behavior" rules are fully configurable by
privileged system administrator(s), without programming, through the underlying
knowledge bases. ICE(tm)'s embedded security will be fully HIPAA (Health
Insurance Portability and Accountability Act of 1996 ) compliant when the final
rulings are released, and supports data compartmentalization down to the
level of specific value in any data field.
Industry Trend
On July 1, 2003 Department of Health & Human Services Secretary Tommy Thompson
announced at the National Healthcare Informatics Infrastructure meeting in
Washington, DC, that, under a contract signed by the College of Pathologists and
the National Library of Medicine, SNOMED will now be available at no charge to
those within the United States.
On December 10, 2003, in Great Britain, the British National Health Service
(NHS) announced that is awarded contracts to various health information system
vendors to facilitate the design and implementation of a bold plan that will
ensure that patients will have their own individual electronic health care
record in the NHS by 2010. Electronic files will ensure that all relevant
information on patients will be accessible anywhere in the NHS when treatment is
being given. Health professionals will have fast access to the patient's full
medical history, significantly reducing the risk of mistakes. To date, the NHS
12
has awarded the following contracts:
<Table>
<Caption>
Recent Contracts Awarded for Electronic Health Records in UK
Company Contract Amount (Pounds)
British Telecom A 10-year contract set up and run the Care 620,000,000
Records Service which will link more than
30,000 GPs and 270 acute, community and
mental health trusts into a single, secure
national system
British Telecom 10-year contract as local service provider 996,000,000
to link the London area NHS trust to the
national system
Accenture 10-year contract as local service provider 1933,000,000
to link the North East and Eastern regions
NHS trusts to the national system.
Computer Sciences Corp. 10-year contract as local service provider 973,000,000
to link the North West and West Midlands
regions NHS trusts to the national system.
</Table>
The US Initiative
According to an October 2003 report on entitled, "Information Technology -
Benefits Realized for Selected Healthcare Functions," the United States
Government Accounting Office reported 13 examples of cost savings resulting from
the use of IT, including reduction of costs associated with medication errors,
communication and documentation of clinical care and test results, staffing and
paper storage, and processing of information. Other benefits included improved
quality of care, more accurate and complete medical documentation, more accurate
capture of codes and charges, and improved communications among providers that
enabled them to respond more quickly to patients' needs. They also reported
examples of reduced costs and other benefits resulting from improvements in
electronic claims processing and the use of technology to enhance customer
service. Benefits included increased staff productivity, improved timeliness in
processing claims, improved customer satisfaction, and improved clinical care to
members.
The Bush Administration's health care agenda has outlined a comprehensive vision
for helping all Americans benefit from the potential of American health care in
the 21st century. The President's health care agenda is designed to improve the
accessibility, affordability and accountability of health care for every
American -- and to make sure that American health care keeps getting better.
ICE is positioned to facilitate many aspects of the Bush Administration's
health care initiatives.
OUR COMPETITION
InterCare DX, Inc., participates in a large and growing marketplace domestically
and internationally. The US healthcare information systems and services market
currently represents a $20 billion annual market. Electronic Medical Record
(EMR), CDR and clinical systems, being a part of an emerging arena, are
accountable for $2 US Billion of this sum Clinical systems' market volume is
expected to accelerate its growth because of the recent HIPAA regulations
requirements.
The most pro-active e-health players are Eclypsis, Cerner, GE Medical,IDX and
McKesson-HBOC. yet, each of these players has thousands of existing customers
operationally using its legacy systems. Thus, their e-health transition
strategy is slow both technically and business wise.
13
Mergers or consolidations among our competitors, or acquisitions of small
competitors by larger companies, would make such combined entities more
formidable competitors to us. Large companies may have advantages over us
because of their longer operating histories, greater name recognition, or
greater financial, technical and marketing resources. As a result, they may be
able to adapt more quickly to new or emerging technologies and changes in
customer requirements. They can also devote greater resources to the promotion
and sale of their products or services than we can.
For the above reasons, we may not be able to compete successfully against our
current and future competitors. Increased competition may result in reduced
gross margins and loss of market share.
OUR COMPETITIVE ADVANTAGE
- OUR KNOWLEDGEABLE AND GROWING SALES FORCE AND TECHNICAL STAFF.
We will be making sure that the sales force is trained on the
"high-end" networking elements in which we deal so they will be able to
service the needs of their customers.
- OUR BUSINESS MODEL COST, EFFICIENCY AND FLEXIBILITY.
We have addressed the largest cost factor in the methodology for deploying
our services through an outsourcing strategy rather than a building the
human resources from the scratch strategy. This keeps start-up costs as
low as possible.
- OUR STRATEGIC PARTNER STRENGTH.
Partnerships with CGI Communications Services, Inc., our parent company
Meridian Holdings, Inc., Meganet Corporation, Sager Midern Coputers.,
Acer America Corporation, ViewSonic Corporation, Microsoft
Corporation, Tech Data Corporation, and QRS Diagnostics, Inc., will
give us the ability to deliver our software products faster and at a lower
cost than the competition
- INTEGRATION.
We can seamlessly integrate all of the different technological solutions
and custom applications development. We use different strategic partners
to tailor the optimum solution for our customer.
- AUTOMATION AND ADVANCED TELECOMMUNICATIONS TECHNOLOGY.
Our Network Management tools are automated which leads to less downtime,
and lower labor costs. We use the latest equipment, work closely with
strategic partners that are forerunners in their fields, and are not
hampered by existing legacy infrastructures.
- OUR CUSTOMIZED CUSTOMER APPROACH.
We emphasize direct relationships with our customers. These relationships
enable us to learn information from our customers about their needs
and preferences and help us expand our service offerings to include
additional value-added services based on customer demand. We believe that
these customer relationships increase customer loyalty and reduce
turnover.
In addition, our existing customers have provided customer referrals
and we believe strong relationships will result in customer referrals in
the future.
Our success depends upon careful planning and the selection of partners. We can
meet the customer's needs more efficiently with entrenched procedures. This
enables us to excel at customer service.
14
Our Product Features and Benefits
ICE(tm) incorporates a wide variety of capabilities and functionality, which
differentiate it from other generally available Electronic Medical Record,
Central Database Repository (EMR/CDR) software programs in the global Healthcare
Information Technology (IT) market.
The most significant differentiators are:
Fully integrated Software Program
ICE(tm) is not an aggregation of unrelated and disintegrated legacy products
acquired through M&As. ICE(tm) is designed and developed as a fully
integrated suite of products, which utilize an identical graphic user interface
on top of a scaleable and highly adaptable component architecture. Thus, each
of the variety of ICE(tm) products is inherently integrated (data model and
business rules alike) with the other products, and the underlying CDR/MKB.
Human anatomy image annotation and embedding, point-and-click data entry
Three-dimensional (3D) MKB (Medical Knowledge Base) navigation utilizing
gender-sensitive, human anatomy drawings. Presentation of lifetime medical
history data over a single full-body drawing. Automatic generation of all
progress notes and forms from the graphical queues entered by the end
user on top of human anatomy drawings as well as annotation of an
embedded image referenced in the body of the document.
Customizable, component-based architecture
Multi-tier, common enterprise architecture for all ICE(tm) products
Multi-threaded engines & components. Automatic and manual load balancing &
distribution through multiple engines utilizing entry level PC hardware.
Knowledge driven applications
Knowledge base driven clinical workstation applications. Most of the
applications' "behavior" (e.g. business rules) is derived from the underlying
database(s), which is fully customizable without the need for programming by
the novice end user. This also includes extended support for visually
"painting" (e.g. designing) additional input & output screens, inclusive of its
business rules.
Repository, data warehouse and datamart unification
While ICE(tm) master central data repository engine(s) will serve the
multitude of concurrent enterprise users, its live backup(s) simultaneously
will serve as data warehouse and datamart for ad-hoc data discovery,
mining and analysis in real-time.
Third-party legacy integration
Seamless bi-directional integration with ancillary, administrative and
financial legacy systems. Concurrent support for both HL7 and proprietary
legacy messaging. Plug-and-play legacy interface(s) addition and/or
modification. Immediate value and ROI to the enterprise by integration of
legacy systems only into the ICE(Tm) CDR prior to any ICE(Tm) application
implementation.
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 $5128.00. 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
15
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.
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
The Company's Common Stock is traded on the Bulletin Board maintained by the
National Association of Securities Dealers, Inc. under the symbol "ICCO." The
price range of the Company's Common Stock has varied significantly in the past
months ranging from a high bid of $.35 and a low bid of $0.03 per share. The
above prices represent inter-dealer quotations without retail mark-up, mark-down
or commission, and may not necessarily represent actual transactions.
SELECTED FINANCIAL DATA
The Company had net working capital of $(135,834) as at March 31, 2004 compared
to networking capital of $ 124,012 during the comparable period in 2003.
The decrease in working capital was due to the increase in account payable. The
Company is currently able to meet its financial obligations through debt
financial support from Meridian Holdings, Inc., an affiliated Company.
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 financial
statements and notes, as well as the other information included elsewhere in
this prospectus. 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.
16
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.
The Company is currently able to meet its financial obligations through debt
financial support from Meridian Holdings, Inc., an affiliated Company.
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.
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
There was no revenue generated for the quarter ended March 31, 2004 and 2003
respectively.
COST OF REVENUES
There was no cost of revenue generated during this period.
SALES AND MARKETING
Only minimal sales and marketing has been done by the Company, since focusing
most of its resources at the moment on the development of the new Software,
enhancements, testing and debugging.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the period ended March 31, 2004
was $43,589, compared to $105,216 during comparable period in 2003. The decrease
in general and administrative expense was due to the portion of the management
share of cost. Of the $43,589 total expense, $40,986 was for employee payroll
and benefits, $2,603 was for office rent and utilities.
The Company anticipates future increases in general and administrative expenses
as it embarks on aggressive product development, sales and marketing with its
associated increase in personnel costs.
17
OPERATING LOSS
As a result of the factors described above, Company expects further increases in
operating expenses for the year 2004, assuming additional funding is raised from
equity investors 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 loss of $43,622 for the period ended March 31, 2004,
compared to net loss of $105,216 in March 31, 2003. The decrease in net loss
was as a result of the decreased management share of cost for the company.
PLAN OF OPERATIONS
On February 17, 2004, the registrant announced the appointment of Mr. Jerry
Miller, as the Interim President and Chief Operations Officer of the
Company.
On February 22-26, 2004, the registrant exhibited ICE(tm) software at the HIMSS
Conference on February 22-26 at Orlando Florida.
On May 1, 2004 the Company issued a private placement memorandum of its common
stock, in order to raise up to $750,000. The use of proceed is for product
marketing, hiring of support personnel, and other corporate purposes.
The Company is in the final stages of negotiations with several hospitals in
both United States and Middle East for the licensing of the ICE(tm) software.
RECENT EVENTS
On March 6 2004, the registrant held its 2004 annual shareholder meeting during
Which the following individuals were elected to serve as directors of the
company until the next annual meeting or their successors are elected and
qualified:
1. Jude Uwaezoke
2. Randall Maxey, MD
3. Russ Lyon
4. Wesley Bradford, MD
Additionally, shareholders ratified the reappointment of Andrew Smith, CPA, as
the independent auditor for the fiscal year ending December 31, 2003 and
reapproved the Company's 2001 Joint Incentive and Non-Qualified Stock Option
Plan for fiscal year 2004.
The Company will also embark on an advertisement campaign over the next several
months in major newspapers and consumer and healthcare journals of all its
new products and services. There is no assurance that such advertisement
campaign will yield any dividend.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act" ), the Company carried out an evaluation under the
Supervision and with the participation of the Company's management, including
the Chief Executive Officer and President and the Principal Financial Officer,
of the effectiveness of the Company's disclosure controls and procedures as of
September 30, 2004. In designing and evaluating the Company's disclosure
controls and procedures, the Company and its management recognize that there are
18
inherent limitations to the effectiveness of any system of disclosure controls
and procedures, including the possibility of human error and the circumvention
or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of
achieving their desired control objectives. Additionally, in evaluating and
implementing possible controls and procedures, the Company's management was
required to apply its reasonable judgment. Based upon the required evaluation,
the Management concluded that as of June 30, 2004, the Company's disclosure
controls and procedures were effective (at the "reasonable assurance" level
mentioned above) to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.
From time to time, the Company and its management have conducted and will
continue to conduct further reviews and, from time to time put in place
additional documentation, of the Company's disclosure controls and procedures,
as well as its internal control over financial reporting. The Company may from
time to time make changes aimed at enhancing their effectiveness, as well as
changes aimed at ensuring that the Company's systems evolve with, and meet the
needs of, the Company's business. These changes may include changes necessary or
desirable to address recommendations of the Company's management, its counsel
and/or its independent auditors, including any recommendations of its
independent auditors arising out of their audits and reviews of the Company's
financial statements. These changes may include changes to the Company's own
systems, as well as to the systems of businesses that the Company has acquired
or that the Company may acquire in the future and will, if made, be intended to
enhance the effectiveness of the Company's controls and procedures. The Company
is also continually striving to improve its management and operational
efficiency and the Company expects that its efforts in that regard will from
time to time directly or indirectly affect the Company's disclosure controls
and procedures, as well as the Company's internal control over financial
reporting.
Changes in Internal Control Over Financial Reporting
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation.
PART II - OTHER INFORMATION
Item 1 legal Proceedings
None
ADDITIONAL INFORMATION
Exhibits
31.1 Certification pursuant to section 302 of the Sarbanes-Oxley
Act of 2002
32.1 Certification 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 DX, Inc.
Date: February 25, 2005 Signature By: /s/ Anthony C. Dike, MD
-----------------------------
Anthony C. Dike, MD
Chairman & CEO
19