UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2001
( ) 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 March 31, 2001, InterCare.com-dx, Inc., Registrant had 12,230,902
shares of its no par value common stock outstanding. There is currently no
public market for this stock.
Page 1 of 12 sequentially numbered pages
Form 10-Q
First Quarter 2001
Intercare.com-dx, Inc.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Independent Accountant's Report 2
Balance Sheets - March 31, 2001 3
Statements of Operations for the Three Months
Ended March 31, 2001 4
Statement of Cash Flows for the Three Months
Ended March 31, 2001 5
Notes to Financial Statements 6-8
Company Overview 9
Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II OTHER INFORMATION
Additional Information 13
Signature 13
1
INTERCARE.COM-DX, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
Balance Sheet As At March 31
2001 2000
====== ======
ASSETS
Current assets
Cash $ 6,193 $ 828
Accounts Receivable (Note 2 ) 1,385,850 -
Less: Allow for Doubtful Accounts 0 -
Inventories 52,211 83,339
Prepaid Expenses 0 11,770
--------- ------
Total Current Assets.. . . . . . . . . . . . . . . . 1,444,254 95,867
========= ======
Property, Plant, and Equipment
Net Accumulated Depreciation (Note 6). . . . . . 9,070 253
Other Assets
Deferred Public Offering Costs 34,836 -
---------- --------
Total Assets 1,488,160 96,120
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts Payable (Note 2) . . . . . . . . . . . . . 1,097,769 0
--------- --------
Total Current Liabilities . . . . . . . 1,097,769 0
--------- --------
Long term liabilities . . . . . .. . . . . 0 0
--------- --------
Total Liabilities . . . . . . . . . . . 1,097,769 0
========= ========
Liabilities and Stockholders' Equity
Stockholders' Equity
Common stock (100,000,000 shares authorized
no par value ; 12,230,902 shares issued and
Outstanding) (Note 2) . . . . . . . . . . . . . 650,628 650,628
Accumulated Deficit (260,237) (554,508)
---------- ----------
Total Stockholders' Equity . . . . . . . 390,391 96,120
---------- ---------
Total Liabilities & Equity. . . . . . . . . . . . $ 1,488,160 $ 96,120
========== =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
INTERCARE.COM-DX, INC.
Consolidated Statement - Unaudited
STATEMENT OF OPERATIONS
For the Three Months ended March 31,
2001 2000
====== =====
Revenues . . . . . . . . $ 334,199 $ 0
Less: Cost of Revenues . (126,897) 0
--------- -------
Gross Margin . 207,302 0
Operating Expense. . . . 280,082 36
Other Income and Expense 0 1
---------- --------
Net Income . . $ (72,780) $ (35
========= ========
Weighted average number of shares 12,230,902 11,000,000
Weighted average earnings per share $ (0.006) $ (0.000)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
INTERCARE.COM-DX, INC.
STATEMENT OF CASH FLOW
UNAUDITED
For the Three Months ended March 31,
2001 2000
==== ====
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss). . . . . . . . . . . . . . . $ (72,780) $ (35)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation Expense 881 -
(Increase) Decrease in
Accounts receivables . . . . . . . . . . . . . 4,334 -
Inventories. . . . . . . . . . . . . . . . . . 14,460 -
Prepaid Expenses . . . . . . . . . . . . . . .
Increase(Decrease) in
Accounts Payables. . . . . . . . . . . . . . . 78,479 -
-------- --------
NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . 25,374 (35)
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of Fixed Assets. . . . . . . . . . (306) -
--------- ---------
NET CASH USED IN INVESTING ACTIVITES . . . . . . . . ( 306) 0
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from sale of stock . . . . . . . . . . - -
Repayment of debt . . . . . . . . . . . . . . . (21,836)
Proceeds from long term debt. . . . . . . . . . - -
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . (21,836) 0
Increase (Decrease) in cash . . . . . . . . . . 3,232 (35)
CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 2,961 864
----------- ----------
CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ 6,193 $ 829
=========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
The accompanying notes are an integral part of this statement.
InterCare.com-dx, Inc.
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 January 17, 1994, a 6.8 magnitude earthquake centered in Northridge,
California caused wide spread damage to commercial and residential structures,
and to major freeways, causing business interruptions and disrupting the normal
flow of traffic. The Company experienced irreversible damage to all its
high-tech computers and diagnostic equipment.
Since that time, the Company has been devoting substantially all its efforts to
establishing a new business entity that develops software for the healthcare
industry and other related activities over the Internet.
On September 27, 1999, the Company, announced that it has executed an Electronic
Commerce Agreement with Netsales, Inc., in which Netsales will distribute
InterCare's software programs through more than 140,000 loyal reseller customers
in 130 countries of Ingram Micro, the largest provider of computer technology
products and services in the world.
The Company had entered into similar agreement earlier, with DigitalRiver, Inc.,
in which DigitalRiver will market the Company's software program through major
retailers such as CompUSA, Wal-Mart, and other Internet software resellers.
On June 30, 2000, the Company signed a master value added reseller agreement
with Meridian Holdings, Inc., an affiliated company, to sell and support the
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.
InterCare as a value-added reseller, develops, markets, provides professional
services and supports for the MedMaster' - a clinically-focused,
multi-disciplinary enterprise solution targeting a variety of large-scale
healthcare organizations. These include: Integrated Healthcare Delivery Networks
(IHDNs), hospitals, HMOs and large clinics.
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.
5
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, 2001 and
2000:
2000 1999
===== =====
Computer Hardware & Software $68,770 $56,967
Less: Accumulated Depreciation 59,700 56,714
------- -------
$ 9,070 $ 253
======== =======
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,
2001.
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.
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).
6
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, prepaid banner advertisements fees
by Meridian Holdings, Inc., an affiliate, accounts payables 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.
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 19,580.00
Accounting Fees and Expenses 2,000.00
Printing 3,785.00
Miscellaneous Expenses 2,871.00
---------
Total $34,836.00
==========
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.
7
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 3. RELATED PARTY TRANSACTIONS
Mr. Russ Lyon recently waived his rights to exercise said option during the
first quarter of 2001, in lieu of 200,000 shares of the registrant at zero par
value, to be issued upon the effectiveness of the registrants registration
statement. The shares will be issued pro-rata to the two years of the employment
agreement.
Note 4. STOCK-BASED COMPENSATION
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". The company issued a total of 1,230,902 shares to
All its employees and consultants under the 2000 incentive stock option plan,
during the quarter ended march 31, 2001.
NOTE 5. SUBSEQUENT EVENTS
PUBLIC OFFERING OF COMMON STOCK
On December 31, 1999, the Board of Directors authorized the Company to sell in a
public offering of 2,500,000 shares of common stock pursuant to an effective
registration statement on Form SB-2 filed under the Securities Act of 1933.
Each share shall have a purchase price of $5.00.
On March 23, 2001, the number of shares offered to be sold to the public was
increased by the Registrant to 5,000,000 and the offering price was decreased to
$5 per share.
Proceeds from the public offering shall be for working capital and general
corporate purposes.
AGREEMENT WITH CHINA BUSINESS CHAIN GROUP, LLC.
On March 10, 2000, the Registrant signed an exclusive reseller agreement with
China Business Chain Group, LLC, (CBCG) to market the MedMaster Suite of
software application in China. Under the terms of the agreement, CBCG will
purchase up to US $5 million in units of the Chinese version of the MedMaster
suite in order to retain exclusive distribution rights to China. CBCG will work
as an integrator, interfacing with other third-party Chinese healthcare
applications. For this purpose, InterCare has agreed to license the MedMaster
software on reasonable and cooperatively-priced terms. As a result of the
multi-language functionality of the MedMaster software, InterCare anticipates
that it will be relatively simple to make a Chinese version available to CBCG.
8
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 developed the Mirage Systems Multimedia Biofeedback software program
in 1994. This is a cross-platform program available in both Microsoft Windows
3.X including windows 95;98 and Apple Macintosh platforms. This software became
the first United States FDA approved software program for neuromuscular
re-education and biofeedback training. The Company also has four other software
products in the market including the "Body Pain Trigger Points Program", one of
our best selling software products, with over 20,000 copies sold. The Company
intends to convert all its software programs to run in all the popular operating
systems available, including but not limited to Microsoft Windows, Macintosh and
Linux or Unix operating systems.
InterCare as a value-added reseller, develops, markets, provides professional
services and supports for the MedMaster' - a clinically-focused,
multi-disciplinary enterprise solution targeting a variety of large-scale
healthcare organizations. These include: Integrated Healthcare Delivery Networks
(IHDNs), hospitals, HMOs and large clinics.
MedMaster' products offer a lifetime electronic patient record, clinical data
repository and integrated clinical applications spanning the continuum of care.
Healthcare providers can access patient information, invoke rules and standards
of care, manage cost and care delivery, as well as maintain compliance with
regulatory documentation and payment requirements. They have been designed
specifically for clinicians and healthcare decision-makers.
By uniquely separating medical knowledge databases (MKB) from applications,
applications take on the attributes of the MKB's incorporated into the CDR
(Central Data Repository) allowing personalization to individual end-users while
preserving a common look and feel across applications. The fifteen (15) years of
development that went into MedMaster has resulted in a comprehensive array of
functionality that leverages technology, care delivery processes and human
interface needs in a manner that personalizes the system according to each
individual's expectations and preferences without changing application code.
The strength of MedMaster applications is derived from differentiated core
technologies consisting of: a virtual, multi-media, object database (VMDB) that
is self-indexing and does not require Data Base Administrators; 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 and the
inclusion of data from these system into the MedMaster CDR for a single point of
access to merged information. Over 10 years of research and development have
been spent in the development of MedMaster software. InterCare's MedMaster
product suite includes:
- - ClinicMaster - Outpatient/Ambulatory Care Solution
- - WardMaster - Inpatient/Acute Care Solution
- - CareMaster - Interdisciplinary Pathways, Care and Quality Management
Solution
- - BaseMaster - Medical Knowledge Base Administration
- - ImageMaster - Multi-media Archiving Solution
- - IntegrationMaster - Bi-directional Interface Engine
- - DataMiner - End-user Data Query, Data Mining and Reporting Solution
- - VMDB - Client/Server Virtual Multi-object Architecture Data Base
Management Solution.
9
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 $4,791.00. 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
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.
LACK OF A PRESENT MARKET FOR SECURITIES
The Common Stock is currently not listed or trading in any exchange at this
Time
MARKET FOR COMMON STOCK
The Company intends to begin trading its common stock in the NASDAQ Small Cap
Market, upon completing its current public offering of its common stock, as well
As meeting the minimum listing requirements. There can be no assurance that the
Company's common stock will be listed, or trade in such market at all. If the
Company is unable to trade in such market, it may apply to trade on the OTC
Bulletin Board administered by the National Association of Security Dealers.
SELECTED FINANCIAL DATA
The Company had net working capital of $346,485 as at March 31, 2001
Compared to networking capital of $95,867 during the comparable period in 2000.
This represents a 72% increase in working capital. The increase in working
capital is due to the sales of additional MedMaster software licenses
to Tenet HealthSystems Medical, Inc., and associated implementation
service fees earned during the reporting period. Based on a prior
agreement, the company is obligated to pay 60% of such sales to
Meridian Holdings, Inc., an affiliate of the Company. The applicable revenue
and expense and related accounts receivable and payable are included in
the Income Statement and Balance Sheet as of March 31, 2001.
The selected financial data set forth above should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
10
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.
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
Sb2 registration statement filed by the registrant in order to raise up to
$25,000,000 was declared effective initially or January 29, 2001 by the United
States Securities and Exchange Commission. An amended sb2 filed subsequent to
that was declared effective as of April 3, 2001. As of this writing, the
offering is on going and there is no assurance that the registrant will be able
to raise all the funds required or any fund at all. If unable to raise the
$500,000 minimum through this offering, the registrant may not be able to break
escrow, and will therefore cancel the offering. This will seriously impact the
liquidity of the registrant.
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
Total revenues for the year ended March 31, 2001 was $334,199 compared to
$0 during comparable period in 2000. The revenue was generated from
software license sales and consulting services (see note 2 to the financial
statement). On March 16th, 2001, the Company sold one software license
to Tenet Health Systems Medical, Inc. Based on a prior agreement, the company
is obligated to pay 60% of such sales as royalty to Meridian Holdings, Inc.(an
affiliated company). Prior to execution of the master value added reseller
agreement with Meridian Holdings, Inc., it had acquired MedMaster(tm), including
11
its sub-systems, source-code and documentation, out of the bankruptcy
proceedings of Sirius Computerized Technologies Limited and Sirius Technologies
of America (collectively, "Sirius"). A significant creditor of Sirius, Lockheed
Martin Systems Integration, Owego ("Lockheed") obtained a judgment against
Sirius and executed same to obtain possession of the source-code underlying the
MedMaster(tm) suite of software products, and has expressed its intention to
exploit same, which could create a major competitor to this portion of our
business. Meridian Holdings, Inc., has requested that Sirius and Lockheed
negotiate a settlement of their dispute in order to permit Sirius to maintain
its commitment to the Meridian Holdings, Inc., and, in turn, to the Company, to
deliver the intellectual property in accordance with the terms of the
Sirius/Meridian purchase agreement, as originally approved by the Israeli
Bankruptcy Courts. As of the date of this Quarterly Report, no settlement
agreement has been reached by Sirius, Lockheed, and Meridian. If no agreement
is reached, Meridian has stated that it may be forced to seek redress through
the Israeli Court Systems to recover all monies spent in salvaging the asset, as
well as collateral damages it may have sustained as a result. There can be no
assurance that Meridian may be able to afford such litigation or that it will
succeed in obtaining any requested relief from the Israeli Courts. If Meridian
is unsuccessful, the impact of Lockheed as a competitor to the Company's
operations may be materially adverse.
COST OF REVENUES
Cost of revenues increased to $126,897 for the period ended March 31, 2001
compared to $0 in the comparable period in 2000. This increase in the cost of
revenue is due to licensing fees incurred from the purchase of MedMaster
software license and level three support services from Meridian Holdings,
Inc., a related party.
SALES AND MARKETING
Only minimal sales and marketing has been done by the Company, since focusing
most of its resources at the moment in our Internet strategies, and software
enhancement, testing and debugging. The Company is budgeting over $250,000 for
its initial roll-out of new products sales and marketing campaign during the
second quarter of the year 2001, assuming more capital is raised from
this offering to pay for such an expense.
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 $1,250,000 during the next
12 months to fund project and content development. This is contingent upon the
Company's ability to raise funds from investors.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the period ended March 31, 2001
was $280,082, compared to $0 during the comparable period in 2000. The increase
in operating expense is due to the additional operating costs of
increased personnel requirement, consultant fees, as well as research and
further development of the MedMaster software program as a value added
reseller. Of the $280,082 expenses during the period ended March 31 2001,
$25,000 was for salary paid to Mr. Russ Lyon our President and Chief Technology
Officer, $880.50 was for depreciation expense, the remaining balance was for
general corporate purposes and product development.
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 and legal and accounting expenses related
to the public offering of its common stock.
12
OPERATING LOSS
As a result of the factors described above, Company expects further increases in
operating expenses for the year 2001, 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 loss of $(72,780) or (0.006) per share for the period
ended March 31, 2001, compared with net loss of $(35). The increase in net loss
was due to increase operating expense as described above.
PLAN OF OPERATIONS
A registration statement filed by the Company for the purpose of raising up to
$25,000,000, was approved by United States Securities and Exchange Commission on
January 29, 2001. The offering prospectus was amended on March 27, 2001, in
Which the number of shares authorized for sell was increased from 2,500,000 to
5,000,000, and the offering price was decreased from $10 per share to $5
per share. The later was declared effective as of April 3rd, 2001.
The Company intends to use part of the funds raised during this offering for
Product launching and general corporate purposes. If adequate funds are not
available or not available on acceptable terms, we may be unable to fund our
expansion, successfully promote our brand name, take advantage of acquisition
opportunities, develop or enhance services or respond to competitive pressures,
any of which could have a material adverse effect on our business, financial
condition and results of operations.
The Company is also planning to embark on an advertisement campaign over the
next several months in news media, consumer and healthcare journals of all its
products and services. There is no assurance that such advertisement campaign
will yield any dividend.
PART II - OTHER INFORMATION
ADDITIONAL INFORMATION
The registrant issued additional shares to its employees and consultants during
the first quarter of 2001, pursuant to the 2000 Qualified and non-qualified
incentive Stock-option plan. Also, during the first quarter of 2001,
the board of directors approved an amendment to Mr. Russ Lyons
employment agreement retro-actively dated November 30, 2000. Significant
part of this amendment, is that Mr. Lyon shall waive his option to purchase
500,000 shares of Meridian Holdings, Inc., Common Stock at $0.50 per share, in
lieu of receiving 200,000 restricted shares of the Registrant at zero par
value, pro-rated to the term of his employment agreement (Please see
Exhibit 1)
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: May 12, 2000
By: /s/ Philip Falese
-------------------
Philip Falese
Chief Financial Officer
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