UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
|
(Mark One) |
||
|
[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 |
||
|
Or |
||
|
[ ] |
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: 000-33187 |
||
|
CareDecision Corporation (Exact name of registrant as specified in its charter) |
||
|
Nevada (State or other jurisdiction of incorporation or
organization) |
91-2105842 (I.R.S. Employer Identification No.) |
|
|
2 Penn Plaza, 15th Floor, Suite
1500-53, New York, NY (Address of principal executive offices) |
10121 (Zip Code) |
|
|
(212) 292-4959 |
||
|
_______________________________________________________________ |
||
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has
filed all documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the
issuer's classes of common stock as of the most recent practicable date:
69,681,174
CareDecision Corporation
[formerly ATR Search
Corporation]
(a Development Stage
Company)
Table of Contents
|
|
|
|
|
Page |
|
PART I -
FINANCIAL INFORMATION |
|
|
Item 1. Financial Statements |
|
|
Consolidated Balance Sheet September 30, 2002 (unaudited) |
4 |
|
Consolidated Statements of Operations For the Three Months Ended
September 30, 2002 and 2001 (unaudited) and For the Nine Months Ended
September 30, 2002 and 2001 (unaudited) and For the Period July 6, 2000
(Inception) to September 30, 2002 (unaudited) |
5 |
|
Consolidated Statements of Cash Flows For the Nine Months Ended
September 30, 2002 and 2001 (unaudited) and For the Period July 6, 2000
(Inception) to September 30, 2002 (unaudited) |
6 |
|
Notes to Financial Statements |
7 |
|
Item 2. Management's Discussion and Plan of Operation |
10 |
|
PART II - OTHER
INFORMATION |
|
|
Item 6. Exhibits |
12 |
|
SIGNATURES |
13 |
|
|
|
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated
Balance Sheet
as of
September 30, 2002 (unaudited)
and
Consolidated Statements of Operations
for the Three and Nine Months Ended
September 30, 2002 and 2001 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2002 (unaudited)
and
Consolidated Statements of Cash Flows
for the Nine Months Ended
September 30, 2002 and 2001 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2002 (unaudited)
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Consolidated
Balance Sheet
(unaudited)
|
Assets |
September 30, 2002 |
|
|
Current assets: |
|
|
|
Cash and equivalents |
$ |
349,807 |
|
Notes receivable |
|
15,850 |
|
Total current assets |
|
365,657 |
|
|
|
|
|
Fixed assets, net |
|
256,393 |
|
|
|
|
|
Intellectual property, net |
|
1,113,615 |
|
|
|
|
|
|
|
|
|
|
$ |
1,735,665 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
10,000 |
|
Notes payable |
|
485,418 |
|
Total current liabilities |
|
495,418 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.001 par value; 100,000,000 shares authorized, 69,681,174 shares issued and outstanding |
|
69,681 |
|
Additional paid-in capital |
|
2,696,498 |
|
(Deficit) accumulated during development stage |
|
(1,525,932) |
|
|
|
1,240,247 |
|
|
|
|
|
|
$ |
1,735,665 |
The accompanying notes are an integral part of these
financial statements.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Consolidated
Statements of Operations
(unaudited)
|
|
July 6, 2000 |
||||||||
|
|
For the three
months ended |
|
For the nine
months ended |
|
(inception) to |
||||
|
|
September 30, |
|
September 30, |
|
September 30, |
||||
|
|
2002 |
|
2001 |
|
2002 |
|
2001 |
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ 500 |
|
$ - |
|
$ 1,555 |
|
$ - |
|
$ 1,555 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
General & administrative
expenses |
159,028 |
|
- |
|
751,323 |
|
4,974 |
|
766,514 |
|
Consulting expense |
276,056 |
|
- |
|
276,056 |
|
- |
|
601,056 |
|
Depreciation |
1,363 |
|
- |
|
2,756 |
|
- |
|
71,756 |
|
Total expenses |
436,447 |
|
- |
|
1,030,135 |
|
4,974 |
|
1,439,326 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
(Loss) on debt settlement |
(68,363) |
|
- |
|
(68,363) |
|
- |
|
(68,363) |
|
Interest income |
1,885 |
|
- |
|
2,852 |
|
- |
|
2,852 |
|
Interest (expenses) |
(14,399) |
|
- |
|
(22,650) |
|
- |
|
(22,650) |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) |
$ (516,824) |
|
$ - |
|
$(1,116,741) |
|
$ (4,974) |
|
$ (1,525,932) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of |
|
|
|
|
|
|
|
|
|
|
common shares outstanding – |
|
|
|
|
|
|
|
|
|
|
basic and fully diluted |
21,027,802 |
|
16,100,000 |
|
33,279,930 |
|
16,100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) per share – basic and fully
diluted |
$ (0.02) |
|
$ - |
|
$ (0.03) |
|
$ (0.00) |
|
|
The accompanying notes are an integral part of these financial statements.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Consolidated
Statements of Cash Flows
(unaudited)
|
|
|
July 6, 2000 |
|||
|
For the nine months ended |
|
(inception) to |
||
|
September 30, |
|
September 30, |
||
|
|
2002 |
|
2001 |
|
2002 |
|
Cash flows from operating activities |
|
|
|
|
|
|
Net (loss) |
$ (1,116,741) |
|
$ - |
|
$ (1,525,932) |
|
Shares issued for services |
276,056 |
|
- |
|
601,056 |
|
Loss on debt settlement |
68,363 |
|
- |
|
68,363 |
|
Depreciation |
2,756 |
|
- |
|
71,756 |
|
Adjustments to reconcile net (loss) to |
|
|
|
|
|
|
net cash (used) by
operating activities: |
|
|
|
|
|
|
(Increase) in notes
receivable |
(15,850) |
|
- |
|
(15,850) |
|
Increase in accounts
payable |
10,000 |
|
- |
|
10,000 |
|
Net cash (used) by operating activities |
(785,416) |
|
- |
|
(800,607) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities |
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
Cash flows
from financing activities |
|
|
|
|
|
|
Increase in notes payable |
485,418 |
|
- |
|
485,418 |
|
Issuance of common stock |
649,801 |
|
- |
|
664,996 |
Net cash provided by financing activities |
1,135,219 |
|
- |
|
1,150,414 |
|
|
|
|
|
|
|
Net increase in cash |
349,803 |
|
- |
|
349,807 |
|
Cash - beginning |
4 |
|
- |
|
- |
|
Cash - ending |
$ 349,807 |
|
$ - |
|
$ 349,807 |
|
|
|
|
|
|
|
|
Supplemental disclosures: |
|
|
|
|
|
|
Interest paid |
$ - |
|
$ - |
|
$ - |
|
Income taxes paid |
$ - |
|
$ - |
|
$ - |
|
|
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
|
|
Shares issued for services
provided |
$ 276,056 |
|
$ - |
|
$ 601,056 |
The
accompanying notes are an integral part of these financial statements.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Notes
Note 1 – Basis of presentation
The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These
statements reflect all adjustments, consisting of normal recurring adjustments,
which, in the opinion of management, are necessary for fair presentation of the
information contained therein. It is
suggested that these consolidated interim financial statements be read in
conjunction with the consolidated financial statements of the Company for the
period ended December 31, 2001 and notes thereto included in the Company's Form
10-KSB. The Company follows the same
accounting policies in the preparation of consolidated interim reports.
Results
of operations for the interim periods are not indicative of annual results.
Note 2 – Going concern
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the recoverability of
assets and the satisfaction of liabilities in the normal course of business. As
noted above, the Company is in the development stage and, accordingly, has not
yet generated a proven history of operations. Since its inception, the Company
has been engaged substantially in financing activities and developing its
product line, incurring substantial costs and expenses. As a result, the
Company incurred accumulated net losses from July 6, 2000 (inception) through
the period ended September 30, 2002 of $(1,525,932). In addition, the Company’s
development activities since inception have been financially sustained by
capital contributions.
The ability
of the Company to continue as a going concern is dependent upon its ability to
raise additional capital from the sale of common stock and, ultimately, the
achievement of significant operating results. The accompanying financial
statements do not include any adjustments that might be required should the
Company be unable to recover the value of its assets or satisfy its
liabilities.
Note 3 – Notes
receivable
On January 15, 2002, Medicius loaned an officer a total of $15,000 which is due in one year at an interest rate of 8% per annum. At the close of the merger this note was assumed by the Company.
During the period ended June 30, 2002, the total
interest income is $1,885.
Note 4 – Fixed
assets
As of September 30, 2002, the Company received equipment in the amount of $27,857 from Keith Berman, a beneficial owner of the Company.
As of September 30, 2002, the Company reclassified equipment in the amount of $229,899 from Investment in Subsidiary pursuant to its merger with Medicius, Inc.
Depreciation expense totaled $2,756 for the nine-month period ended September 30, 2002.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Notes
Note 5 –
Intellectual property
During the period ended September 30, 2002, the Company acquired Intellectual Property from CareDecision.net, Inc, a private stockholder owned corporation that completed several transactions the Company. As a result of the merger and the acquired intellectual property, two of the beneficial owners of CareDecision.net are now beneficial owners of the Company.. Pursuant to the agreement, the Company paid CareDecision.net, Inc. the sum of $187,500 with 700,000 shares of the Company’s $0.001 par value preferred stock. During the three-months ended September 20, 2002, CareDecision.net, Inc. converted its preferred stock into 1,725,000 shares of the Company’s $0.001 par value common stock.
Note 6 –
Investment in Care Technologies, LLC
On June 21,
2001, the Company entered into an agreement with Care Technologies, LLC whereby
the Company sold all of the assets and liabilities of the Company in exchange
for a 10% ownership of Care Technologies, LLC.
The investment was recorded at $229,899, being the fair value of the
Company’s assets on the acquisition date (see Note 4 above).
Note 7 – Notes payable
On January 15, 2002, the Company received $40,000
from Keith Berman, a beneficial owner of the Company, which is due on December
31, 2003 and accrued interest at 8% per annum.
The principal and accrued interest can be converted at a rate of $0.10
per share. During September 2002, Mr.
Berman converted his $40,000 loan plus interest into 1,267,963 shares of the
Company’s $0.001 par value common stock.
On April 23, 2002, the
Company received $475,000 from M and E Equities, LLC which is due in two years
at an interest rate of 9% per annum.
The principal and interest of the note can be converted into five shares
of the Company’s $0.001 par value common stock for each $1 of debt. This note is secured by all the assets of
the Company to include accounts receivable, inventory, fixed assets, and
intangible assets.
During the nine-months ended
September 30, 2002, the Company recorded a total of $62,573 from various
entities and individuals which is due upon demand and accrued interest of
$1,715 at a rate of 8%. During the three-months
ended September 30, 2002, the note-holders converted their debt and accrued
interest into 664,644 shares of the Company’s $0.001 par value common stock
During the nine-months ended
September 30, 2002, the Company recorded interest expense of $22,650.
Note 8 –
Stockholder’s equity
During the nine-months ended
September 30, 2002, the Company issued a total of 32,968,863 shares of its
$0.001 par value common stock pursuant to its reverse merger with Medicius,
Inc. whereby each shareholder received three Company shares for every one
Medicius, Inc. share held.
During the nine-months ended
September 30, 2002, the Company issued 1,725,000 shares of its $0.001 par value
common stock to CareDecision.net, Inc. pursuant to its election to convert
700,000 shares of the Company’s $0.001 par value preferred stock into common
stock.
During the nine-months ended
September 30, 2002, the Company issued 6,927,737 shares of its $0.001 par value
common stock to various persons and entities and to note-holders pursuant to
their election to convert $64,288 in convertible debt inclusive of accrued
interest.
During the nine-months ended
September 30, 2002, the Company issued 6,340,000 shares of its $0.001 par value
common stock to various individuals and entities for consulting services valued
at $276,056, the fair market value of the underlying shares on the date of
issuance.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development Stage Company)
Notes
During the nine-months ended
September 30, 2002, the Company issued 2,539,574 shares of its $0.001 par value
common stock for cash totaling $200,000.
There have been no other issuances of common stock.
Note 9 – Related party
transactions
During the period ended September 30, 2002 the Company received equipment in the amount of $27,857 from Keith Berman, a beneficial owner of the Company.
During the period ended September 30, 2002, the Company acquired Intellectual Property from CareDecision.net, Inc, a private stockholder owned corporation that completed several transactions the Company. As a result of the merger and the acquired intellectual property, two of the beneficial owners of CareDecision.net are now beneficial owners of the Company.. Pursuant to the agreement, the Company paid CareDecision.net, Inc. the sum of $187,500 with 700,000 shares of the Company’s $0.001 par value preferred stock. CareDecision.net, Inc. then elected to convert its preferred shares into 5,075,000 shares of the Company’s $0.001 par value common stock.
On January 15, 2002, the Company received $40,000 from
Keith Berman, a beneficial owner of the Company, which is due on December 31,
2003 and accrued interest at 8% per annum.
During the three-months ended September 30, 2002, Mr. Berman elected to
convert the note plus interest totaling $42,266 into 1,267,963 shares of the
Company’s $0.001 par value common stock.
Note 10 – Warrants
During the nine-months ended September 30, 2002, the
Company has issued 5,540,795 Class A non-callable warrants to Medicius, Inc.
shareholders pursuant to the merger agreement (see Note 11 below). Each Class A warrant unit is exercisable
into one share of the Company’s $0.001 par value common stock at $0.04 per
share plus 0.5 Class C warrants. The
Class A warrant units expire on June 30, 2005.
Note 11 –
Reverse acquisitions agreement with Medicius, Inc. (MED)
On June 21,
2001, the Company entered into an agreement with MED whereby the Company
acquired all of the issued and outstanding common stock of NDI in exchange for
38,043,863 voting shares of the Company’s $0.001 par value common stock. The acquisition was accounted for using the
purchase method of accounting as applicable to reverse acquisitions because the
former stockholders of the MED controlled the Company’s common stock
immediately upon conclusion of the transaction. Under reverse acquisition accounting, the post‑acquisition
entity was accounted for as a recapitalization of MED. The common stock issued was recorded at $0,
being the fair value of the Company’s assets on the acquisition date.
The continuing company has retained December 31
as its fiscal year end.
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking
statements about our business, financial condition and prospects that reflect
our assumptions and beliefs based on information currently available. We can give no assurance that the
expectations indicated by such forward-looking statements will be realized. If any of our assumptions should prove incorrect,
or if any of the risks and uncertainties underlying such expectations should
materialize, our actual results may differ materially from those indicated by
the forward-looking statements.
The key factors that are not within our control and
that may have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our customer
base, our ability to raise capital in the future, the retention of key
employees and changes in the regulation of our industry. There may be other risks and circumstances
that we are unable to predict. When
used in this Quarterly Report, words such as,
"believes," "expects," "intends," "plans," "anticipates," "estimates"
and similar expressions are intended to identify forward-looking
statements, although there may be certain forward-looking statements not
accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor
created by Section 21E of the Securities Exchange Act of 1934.
General
Our mission is to provide
enhanced information technology (IT) to physicians at the point of clinical
decision. Our software systems,
communication tools and suite of software applications obtained through our
merger, permits a physician to request critical patient medical and/or
medication information via the Web on a Microsoft Windows CE-based PDA at, or
prior to the point-of-care.
The system captures and
displays the requested information, and overlays formulaic medical treatment
protocols and medical step therapies, creating not only a patient specific
historical medical chart, but also suggested treatment alternatives, approved
medications and diagnosis specific protocols.
Utilization of this system by the practicing physician enhances clinical
decision-making, improves physician productivity, insures formulary compliance,
reduces the cost of healthcare and positively impacts the care provided to the
patient.
As of June 28, 2002, the
Effective Date of our merger, the capital stock of Medicius issued and
outstanding immediately prior to the Effective Date was converted into ATR
Common Stock (prior to our name change to CareDecision Corporation) as follows:
(i) Each share of Medicius Series A Preferred Stock was
converted into 3.5 common stock shares of ATR and .75 ATR common stock purchase
Warrants.
(ii) Each share of Medicius common stock was converted into 3.0
common stock shares of ATR and .5 ATR common stock purchase Warrants.
(iii) After the Effective Date, all Medicius common stock purchase warrants that remain unexercised as of the Effective Date and any Medicius Convertible Notes that remain unconverted or unpaid on the Effective Date remain exercisable for or convertible into the number of common stock shares of ATR based on the same conversion ratio outlined in paragraph (ii) above.
Results of Operations
We generated $1,555 in revenues for the nine-month
period ended September 30, 2002. Our
future revenues will be reliant on the acceptance of our software systems,
communication tools and suite of software applications.
Total operating expenses for the nine
months ended September 30, 2002 were $1,030,135 and $1,439,326 since
inception. Total operating expenses for
the nine-month period ended September 30, 2002 and since inception were
entirely related to general and administrative expenses, consulting fees,
depreciation and amortization, and organizational costs.
Future Business
The elements of our future business strategy
include: expanding geographically into key markets through a combination of
opening new offices and developing relationships with clients to generate
demand for our services; recruiting qualified, medical software and other
technical personnel to perform technical, implementation and support duties as
contracts are entered into, although there can be no assurance that any such
contracts will be secured; and pursuing entry into new markets complementary to
our proposed operations. Future
operations are dependent upon our ability to implement our business and
marketing strategies and to establish relationships and contracts with health
insurers and HMOs to provide our e-healthcare products and services.
We have entered into a marketing agreement with Pharmacare, Inc., a wholly owned subsidiary of CVS
Corporation, and a leading provider of pharmacy benefit services to health
insurers. Under this agreement Company
plans to introduce the Company’s products to Pharmacare’s client health plans.
Liquidity and Capital
Resources
We believe our cash on hand of $349,807 will be
sufficient to fund ongoing fiscal 2002 and 2003 operations and provide for our
working capital needs, however, we have negative working capital of
$129,761. Our accountant has issued a
note concerning our ability to continue as a going concern. As we are still considered to be in the
development stage, our prospects of continuing as a going concern are
contingent upon our ability to achieve and maintain profitable operations. Revenues generated over and above expenses
will be used for further development of our services, to provide financing for
marketing and promotion, to secure additional customers, equipment and
personnel, and for other working capital purposes.
To date, we have financed our cash flow requirements
through a public issuance of common stock and through the issuance of
notes. During our normal course of
business, we will experience net negative cash flows from operations, pending
receipt of revenues. Further, we may be
required to obtain financing to fund operations through additional common stock
offerings and bank borrowings, to the extent available, or to obtain additional
financing to the extent necessary to augment our available working capital.
All investor inquiries should be directed via mail
to Mr. Robert Cox, President, CareDecision Corp. 2 Penn Plaza, 15th Floor, Suite 1500-53, New York,
New York 10121.
PART II – OTHER
INFORMATION
Item 6(a) –
Exhibits
|
Exhibit Number |
Name and/or Identification of Exhibit |
|
3.1 |
Articles of
Incorporation & By-Laws |
|
|
(a) Articles of Incorporation of the Company filed March 2,
2001. Incorporated by reference to
the exhibits to the Company’s General Form For Registration Of Securities Of
Small Business Issuers on Form 10-SB, previously filed with the Commission. |
|
|
(b) Certificate of Amendment to the Articles of Incorporation of the
Company filed May 9, 2001.
Incorporated by reference to the exhibits to the Company’s General
Form For Registration Of Securities Of Small Business Issuers on Form 10-SB,
previously filed with the Commission. |
|
|
(c) Certificate of Amendment to the Articles of Incorporation of the
Company filed August 2, 2002.
Incorporated by reference to the exhibits to the Company’s June 30,
2002 Quarterly Report on Form 10-QSB, previously filed with the Commission. |
|
3.2 |
By-Laws of the Company adopted March 16, 2001. Incorporated by reference to the exhibits
to the Company’s General Form For Registration Of Securities Of Small
Business Issuers on Form 10–SB, previously filed with the Commission. |
|
99.1 |
Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C.
SECTION 1350) |
Item 6(b) – Reports Filed on
Form 8-K
For the quarter ended September 30, 2002 the Company did not file any
reports on Form 8-K with the Securities and Exchange Commission.
SIGNATURES
Pursuant
to the requirements of the Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CareDecision
Corporation
-----------------------------------------------------------------------------------------------------------------
(Registrant)
Date:
____November 8, 2002____________
By: _________________________________
Robert Cox, President and
CEO
Date:
____November 8, 2002____________
By: _________________________________
Michael Vogel, Treasurer and
CFO