UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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(Mark One) |
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[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly
period ended: September 30, 2003 |
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Or |
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the
transition period from ____________ to _____________ |
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Commission File
Number: 000-33187 |
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CareDecision Corporation (Exact name of registrant as specified in its charter) |
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Nevada (State or other jurisdiction of incorporation or
organization) |
91-2105842 (I.R.S. Employer Identification No.) |
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2660 Townsgate Road, Westlake Village, Suite 300,
CA 91361 (Address of principal executive offices) |
91361 (Zip Code) |
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(805) 446-1973 |
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2 Penn Plaza, 15th Floor, Suite
1500-53, New York, NY, 10121 |
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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:
113,784,921
CareDecision Corporation
[formerly ATR Search
Corporation]
(a Development Stage
Company)
Table of Contents
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Page |
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PART I -
FINANCIAL INFORMATION |
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Item 1. Financial Statements |
3 |
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Consolidated Balance Sheet September 30, 2003 (unaudited) |
4 |
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Consolidated Statements of Operations For the Three and Nine Months
Ended September 30, 2003 and 2002 (unaudited) and For the Period July 6, 2000
(Inception) to September 30, 2003 (unaudited) |
5 |
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Consolidated Statements of Cash Flows For the Nine Months Ended
September 30, 2003 and 2002 (unaudited) and For the Period July 6, 2000
(Inception) to September 30, 2003 (unaudited) |
6 |
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Notes to Financial Statements |
7 |
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Item 2. Management's Discussion and Plan of Operation |
11 |
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PART II - OTHER
INFORMATION |
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Item 1. Legal Proceedings |
15 |
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Item 6(a). Exhibits |
15 |
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Item 6(b). Reports Filed on Form 8-K |
16 |
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SIGNATURES |
17 |
Part I - Financial Information
Item 1. Financial Statements
CareDecision Corporation
[formerly ATR
Search Corporation]
(a Development
Stage Company)
Consolidated
Balance Sheet
as of
September 30, 2003 (unaudited)
and
Consolidated Statements of Operations
for the Three and Nine Months Ended
September 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
and
Consolidated Statements of Cash Flows
for the Nine Months Ended
September 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to September 30, 2003 (unaudited)
CareDecision
Corporation
[formerly ATR Search
Corporation]
(a Development
Stage Company)
Consolidated
Balance Sheet
(unaudited)
|
Assets |
September 30, |
|
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|
2003 |
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Current assets: |
|
|
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Cash and equivalents |
$ |
44,347 |
|
Accounts receivable, net of allowance for doubtful
accounts of $12,500 |
|
21,748 |
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Total current assets |
|
66,095 |
|
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|
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Fixed
assets, net |
|
1,238,763 |
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$ |
1,304,858 |
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Liabilities and Stockholders’ Equity |
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Current
liabilities: |
|
|
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Note payable to shareholder |
$ |
91,078 |
|
Stock subscription payable |
|
13,750 |
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Notes payable |
|
513,527 |
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Total current liabilities |
|
618,355 |
|
|
|
|
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|
618,355 |
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Stockholders’
equity: |
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Preferred stock, $0.001 par value, 5,000,000
shares |
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authorized, no shares issued and outstanding |
|
- |
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Common stock, $0.001 par value, 200,000,000 shares |
|
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authorized, 113,784,921 shares issued and
outstanding |
|
113,785 |
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Additional paid‑in capital |
|
3,941,402 |
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Treasury stock |
|
(96,750) |
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(Deficit) accumulated during development stage |
|
(3,271,934) |
|
|
|
686,503 |
|
|
|
|
|
|
$ |
1,304,858 |
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 |
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For the three
months ended |
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For the nine
months ended |
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(Inception) to |
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September 30, |
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September 30, |
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September 30, |
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2003 |
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2002 |
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2003 |
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2002 |
|
2003 |
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(Restated) |
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(Restated) |
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(Restated) |
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Revenue |
$ 22,848 |
|
$ 500 |
|
$ 24,698 |
|
$ 1,555 |
|
$ 26,698 |
|
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Expenses: |
|
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General and administrative
expenses |
35,556 |
|
159,028 |
|
119,545 |
|
751,323 |
|
202,231 |
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Payroll expense |
48,415 |
|
- |
|
171,209 |
|
- |
|
358,028 |
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Professional fees |
11,465 |
|
- |
|
54,693 |
|
- |
|
226,545 |
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Consulting expense |
152,750 |
|
276,056 |
|
508,750 |
|
276,056 |
|
1,828,232 |
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Software development |
- |
|
- |
|
3,950 |
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- |
|
132,950 |
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Depreciation |
80,622 |
|
80,383 |
|
246,274 |
|
80,383 |
|
407,040 |
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Total expenses |
328,808 |
|
515,467 |
|
1,104,421 |
|
1,107,762 |
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3,155,026 |
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Other income
(expenses): |
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(Loss) on debt settlement |
(25,000) |
|
(68,363) |
|
(62,094) |
|
(68,363) |
|
(88,019) |
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Interest income |
- |
|
1,885 |
|
561 |
|
2,852 |
|
2,791 |
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Interest (expenses) |
(12,754) |
|
(14,399) |
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(35,558) |
|
(22,650) |
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(58,378) |
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Net (loss) |
$ (343,714) |
|
$ (595,844) |
|
$(1,176,814) |
|
$ (1,194,368) |
|
$ (3,271,934) |
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Weighted average
number of |
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common
shares
outstanding – |
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basic and fully diluted |
100,990,475 |
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21,027,802 |
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92,711,681 |
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33,279,930 |
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Net (loss) per
share – basic and fully diluted |
$ (0.00) |
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$ (0.03) |
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$ (0.01) |
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$ (0.04) |
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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 |
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For the nine months ended |
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(inception) to |
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September 30, |
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September 30, |
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2003 |
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2002 |
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2003 |
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(Restated) |
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(Restated) |
Cash flows from operating activities |
|
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Net
(loss) |
$ |
(1,176,814) |
|
$ |
(1,194,368) |
|
$ |
(3,271,934) |
|
Shares
issued for services |
|
508,750 |
|
|
276,056 |
|
|
1,828,232 |
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Loss
on debt settlement |
|
62,094 |
|
|
68,363 |
|
|
88,019 |
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Depreciation |
|
246,274 |
|
|
80,383 |
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|
407,040 |
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Adjustments
to reconcile net (loss) to |
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net cash (used) by operating activities: |
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Decrease in accounts receivable |
|
5,376 |
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|
- |
|
|
- |
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(Increase) in notes receivable |
|
(34,248) |
|
|
(15,850) |
|
|
(21,748) |
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Net
cash (used) by operating activities |
|
(388,568) |
|
|
(785,416) |
|
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(970,391) |
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Cash
flows from financing activities |
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Proceeds from convertible notes – related party |
|
50,000 |
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|
- |
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|
50,000 |
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Proceeds from notes payable |
|
25,000 |
|
|
485,418 |
|
|
513,527 |
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Payments on notes payable |
|
(1,890) |
|
|
- |
|
|
(37,493) |
|
Accrued interest |
|
3,095 |
|
|
- |
|
|
3,095 |
|
Proceeds from note payable to shareholder |
|
130,606 |
|
|
- |
|
|
130,606 |
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Payments on note payable to shareholder |
|
(20,347) |
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|
- |
|
|
(20,347) |
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Stock subscription payable |
|
13,750 |
|
|
- |
|
|
13,750 |
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Issuance of common stock |
|
121,600 |
|
|
649,801 |
|
|
361,600 |
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Net
cash provided by financing activities |
|
321,814 |
|
|
1,135,219 |
|
|
1,014,738 |
|
|
|
|
|
|
|
|
|
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Net
increase in cash |
|
(66,754) |
|
|
349,803 |
|
|
44,347 |
|
Cash
– beginning |
|
111,101 |
|
|
4 |
|
|
- |
|
Cash
– ending |
$ |
44,347 |
|
$ |
349,807 |
|
$ |
44,347 |
|
|
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|
|
|
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Supplemental
disclosures: |
|
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|
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Interest paid |
$ |
- |
|
$ |
- |
|
$ |
- |
|
Income taxes paid |
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
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Non-cash
transactions: |
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|
|
|
|
|
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Number of shares issued for services provided |
|
26,309,748 |
|
|
276,056 |
|
|
45,927,485 |
|
Number of shares issued to acquire technology |
|
2,500,000 |
|
|
- |
|
|
2,500,000 |
|
Number of shares issued for debt settlement |
|
741,875 |
|
|
- |
|
|
741,875 |
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, 2002 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, 2003 of $3,271,934. 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 –
Change in accounting principle
The Company determined during the nine months ending
September 30, 2003 that it is appropriate to reclassify software acquired in
2002 from intellectual property to fixed assets. The effect of the change in accounting principle requires a restatement
of the December 31, 2002, and March 31, 2003 financial statements in order to
properly reflect the asset reclassification and the related adjustment to
depreciation expense. The effect of
this change was to decrease net income for the year ended December 31, 2002 and
the three months ended March 31, 2003 by $119,988 and $63,409,
respectively. Retained earnings as of
January 1, 2002 has been adjusted for the retroactive application of the change
in accounting principle.
Note 4 – Fixed
assets
On February 5, 2003, the Company acquired fully-developed
software valued at $181,250 from CareDecision.net, Inc., the former parent
corporation of Medicius, Inc. Medicius,
Inc. was acquired by the Company in June 2002. Several of the control persons
from CareDecision.net, Inc. are in similar positions of control at the Company.
Depreciation expense totaled $246,274 for the
nine-month period ended September 30, 2003.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development
Stage Company)
Notes
Note 5 – Notes
payable – related party
During the nine months ended September 30, 2003, the
Company received loans totaling $130,606 from a Company shareholder and
director. The notes bear interest at 9%
per annum and are due 365 days from date of issuance.
During the nine months ended September 30, 2003, the
Company recorded interest expense of $35,558.
Note 6 –
Convertible notes
During the nine months ended September 30, 2003, the
Company received a loan totaling $50,000 from a Company shareholder. The note is convertible into 1,538,500
shares of the Company’s $0.001 par value common stock at a strike price of
$0.0325 per share. The convertible note
also carried with it 1,538,500 warrants exercisable on a one-for-one basis at a
strike price of $0.0325 per share. On
April 22, 2003, the holder elected to convert the note into 1,538,500 shares of
the Company’s $0.001 par value common stock.
Note 7 –
Stockholder’s equity
During the nine months ended September 30, 2003, the
Company issued 8,000,000 shares of $0.001 par value common stock to various
individuals for consulting services valued at $356,000.
During the nine months ended September 30, 2003, the
Company issued 2,500,000 shares of $0.001 par value common stock to acquire
developed software valued at $181,250 from CareDecision.net, Inc.
During the nine months ended September 30, 2003, the
Company issued 741,875 shares of its $0.001 par value common stock to an
individual as settlement for past debts valued at $37,094.
On July 21, 2003, the Company issued an 8% share
dividend to its shareholders of record.
The Company issued 6,469,132 shares of its $0.001 par value common stock
pursuant to the dividend issuance.
On July 1, 2003, the Company entered into a
consulting agreement with Anthony Quintiliana to perform information technology
services for the Company. As
consideration, the Company issued 1,500,000 shares of $0.001 par value common
stock on August 18, 2003, and stock options to purchase an additional 2,000,000
shares of $0.001 par value common stock at a strike price of $0.05 per share
pursuant to the Company’s 2003 Stock Option Plan. The shares will be registered and free-trading via Form S-8. On September 18, 2003, Mr. Quintiliana
exercised his options and purchased 2,000,000 shares of stock for cash totaling
$101,600.
On July 1, 2003, the Company entered into a
consulting agreement with Barbara Asbell to perform medical information
technology services for the Company. As
consideration, the Company issued 2,500,000 shares of $0.001 par value common
stock. The shares will be registered
and free-trading via Form S-8. Based
upon the terms of her consulting agreements, Ms. Asbell has agreed to rescind
an equal number of her existing shares bearing a restricted legend.
On July 15, 2003, the Company entered into a consulting
agreement with Leslie-Michelle Abraham to perform corporate administrative
services for the Company. As
consideration, the Company issued stock options to purchase 850,000 shares of
$0.001 par value common stock at a strike price of $0.05 per share pursuant to
the Company’s 2003 Stock Option Plan.
The shares will be registered and free-trading via Form S-8. On September 30, 2003, Ms. Abraham exercised
her options and acquired 850,000 shares of the Company’s $0.001 par value
common stock for cash and services totaling $42,500.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development
Stage Company)
Notes
On August 18, 2003, the Company issued 300,000
shares of its $0.001 par value common stock to its employees for services
valued at $20,833.
On September 12, 2003, the Company issued 15,059,748 shares
of its $0.001 par value common stock to various individuals and entities for
past services valued at $644,001. The
services have been previously expensed and accrued for by the Company
throughout the year ended December 31, 2002, and during the nine months ended
September 30, 2003.
There have been no other issuances of preferred or
common stock.
Note 8 – Related party
transactions
During the nine months ended September 30, 2003, the
Company acquired fully-developed software from CareDecision.net, Inc, a private
corporation with several control persons serving in similar positions at the
Company. Pursuant to the agreement, the
Company paid CareDecision.net, Inc. the sum of $181,250 with 2,500,000 shares
of the Company’s $0.001 par value common stock.
During the nine months ended September 30, 2003, the
Company received $100,150 from Robert Cox, a Company shareholder and Chairman
of the Board. The notes are due on 365
days from issuance and accrued interest at 9% per annum.
During the nine months ended September 30, 2003, the
Company received $50,000 from Dr. Thomas Chillemi, a Company shareholder, the
note is convertible into 1,538,500 shares of the Company’s $0.001 par value
common stock and carries with it 1,538,500 warrants exercisable on a
one-for-one basis at a strike price at $0.0325 per share. On April 22, 2003 Dr.
Chillemi exercised the convertible portion of his note and converted the
$50,000 debt into 1,538,500 shares of the Company’s $.001 par value common
stock.
On July 10, 2003, the Company entered into a consulting
agreement with Dr. Thomas Chillemi, a Company shareholder, to perform corporate
development services for the Company.
As consideration, the Company issued stock options to purchase 3,000,000
shares of $0.001 par value common stock at a strike price of $0.05 per share
pursuant to the Company’s 2003 Stock Option Plan. The shares will be registered and free-trading via Form S-8.
On July 15, 2003, the Company entered into a
consulting agreement with Dr. Joseph A. Wolf, a Company shareholder to perform
medical information technology services for the Company. As consideration, the Company issued stock
options to purchase 950,000 shares of $0.001 par value common stock at a strike
price of $0.05 per share pursuant to the Company’s 2003 Stock Option Plan. The shares will be registered and
free-trading via Form S-8.
Note 9 – Stock option plan
On January 1, 2003, the Company adopted its “2003
Stock Option Plan” (the “Plan”) and granted incentive and nonqualified stock
options with rights to purchase 25,000,000 shares of the Company’s $0.001 par
value common stock. The Company issued
13,500,000 shares of stock pursuant to the plan during the nine months ended
September 30, 2003.
On August 5, 2003, the Company entered into a
consulting agreement with Ely Mandell to perform corporate strategic and
developmental services for the Company.
As consideration, the Company issued stock options to purchase 150,000
shares of $0.001 par value common stock at a strike price of $0.05 per share
pursuant to the Company’s 2003 Stock Option Plan. The shares will be registered and free-trading via Form S-8.
CareDecision
Corporation
[formerly ATR
Search Corporation]
(a Development
Stage Company)
Notes
Note 10 – Subsequent events
On October 31, 2003 Dr. Wolf exercised all 950,000
of his stock options by rendering $47,500.00 in cash.
On October 1, 2003 Dr. Chillemi exercised 1,000,000 of his
stock options as consideration for services performed valued at $50,000. On
November 1, 2003, Dr. Chillemi exercised an additional 1,000,000 of his stock
options as consideration for services performed valued at $50,000.
Note 11 –
Reverse acquisitions agreement with Medicius, Inc. (MED)
On June 21,
2002, 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.
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.
General
The company is still in the development stage and is
only now beginning commercial delivery of its products and services. In the quarter ended September 30, 2003 the
company booked its first revenues as a direct result of the implementation of
its proprietary technologies and products.
Our principal products are: an E-Health handheld
information appliance (PDA) software application package, and a permanently
affixed handheld information appliance and Wi-Fi (wireless) network designed
for the hotel, motel and apartment marketplace. The company has applied for and received provisional approval for
a family of trademarks making use of the mark MD@. The
provisional approval applies to the first six individual marks applied for by
the company. In addition, the company is in the process of applying for marks
associated with its ResidenceWare hotel/motel products and technologies.
We presently have a comprehensive suite of medical
information technology, cooperative advertising, instant messaging and
fulfillment, and electronic commerce applications that are Internet enhanced,
integrated for medical professional use, and hotel management/guest use, both
software suites functioning through networks of wireless PDA Internet
appliances. The company’s applications
have been designed to meet the needs of the inpatient and outpatient medical
environments, and the hotel management and guest (consumer), and are not just
commercially viable but also regulatory standard compliant. Additionally, our software applications were
conceived and implemented to offer the management level user, either the
medical professional or hotel manager, the ability to manage prospective and
retrospective commerce. The company has
filed two broad based patent applications and intends to file derivative patent
applications covering the processes, use and functionality of its technologies
and products.
Our software is designed to integrate point of
service applications. The medical
appliance, the longest available product, monitors treatment protocols and up
to the moment patient histories coupled with real-time on-line medical
insurance claims submission. Our
ultimate key to success resides in providing the private practice physician
with the capability to, sequentially, learn about the history of his or her
patient during, or prior to, entering the examining room, treat the patient and
update the insurer of the episode of care.
Accomplishing these objectives resolves a major dilemma for the health
care provider; instantaneous communication of vital patient related information
at or before the patient encounter.
The Wi-Fi hotel/motel and apartment software makes use of much of the
foundation technologies resident in the medical product, however, given the
differences in the two markets that the products service, the hotel/motel
product is much more cooperative oriented, offering more consumer transactional
services with the compliment of advertising.
Our medical technologies, the focus of one of the
broad based patent applications now in the patent prosecution stage, are
grounded in the central need to furnish the doctor with crucial point-of-care
patient information rapidly and reliably via a PDA. The technologies utilize the power of the Internet to move large
amounts of data to and from a variety of platforms securely via a powerful
Windows CE based PDA designed for portability and upgradability. Totally compliant with the Health Insurance
Portability and Accountability Act of 1996 (“HIPAA”), this PDA technology is
among the first to offer complicated and real-time point of care applications,
previously legacy (mainframe or PC network) system applications, on a totally
portable (PDA) appliance.
Our technologies and products for the hotel/motel
marketplace are designed to furnish hotel and motel guests with a menu of food
service, office services and other remote service (dry cleaning for instance)
choices that can be electronically ordered through the company’s PDA-based
information appliance for delivery directly to the hotel/motel guest. Employing the latest in commercial Wi-Fi
technology, the company wraps the time and volume tested commercial
technologies into the company’s patent pending PDA communication networking technologies,
allowing the company to be the first to offer complex and real-time point of
sale applications through a totally wireless (PDA) appliance.
Our PDA software operates on any Microsoft Windows
CE “Pocket PC” based handheld device, either in a wireless or “wired”
mode. The local host for our PDA
devices is a Windows (9X, NT or later) based PC in the physician’s office,
which, in turn, permits one to eight of the aforementioned PDAs to be linked to
either a medical network or hotel/motel wide area network, and allows each PDA
to become a uniquely identified mobile node on that network, independent of PC
linkage, thereby, assisting the professional in the review of relevant
histories, transactions, and for the medical related product --medications and
prescriptions, lab test ordering, medical step processes and protocols and
specialist referral processes.
The PDA software provides rules based software
capabilities and the ability to receive order fulfillment information for over
5,000 users simultaneously, which represents approximately 3 years of user
encounters in a typical network setting, and allows medical professionals to
access payor and health plan business rules, and policy/plan coverage’s
directly from the plan(s).
In May 2003 the company entered into an agreement with PCHertz.com,
Inc. of Fargo, ND for the distribution of and servicing of their products and
services for the hotel/motel industry.
The agreement with PCHertz.com, Inc. has resulted in a series of orders
for the company’s hotel/motel products and services from five hotel groups,
owners of hotels and motels in the states of California, Arizona, Illinois,
Iowa, South Dakota, North Dakota, Minnesota, Virginia, and Georgia. Initial placement of product, now in the
process of early implementation under these agreements, will total at least
1450 of the company’s ResidenceWare units.
On September 23, 2003 we signed a Preliminary
Agreement to Merge with MDU Services Inc. (“MDUS”), a Texas-based provider of
private digital utility services to multiple tenant residential and business
building sites, hotels/motels and universities. The Preliminary Agreement to merge specifies how CareDecision and
MDUS desire to execute a "triangle" merger agreement whereby
CareDecision shall acquire MDUS and then merge MDUS into a subsidiary corporation,
MDU Media Corporation (the "Merger Sub"). As of the date of this filing we are working on a definitive
agreement.
Results
of Operations
The following is an itemization of our results of
operations for the nine-month period ended September 30, 2003 in comparison to
our results of operations for the period ended September 30, 2002.
REVENUES. Total revenues for the
nine-month period ended September 30, 2003 were $24,698 as compared to total
revenues of $1,555 for the nine-month period ended September 30, 2002. As a development stage company we have yet
to generate significant revenues and we cannot guarantee with certainty when we
will begin to generate significant revenues.
Our future revenues will be reliant on the acceptance of our software systems,
communication tools and suite of software applications.
GENERAL
AND ADMINISTRATIVE. General and Administrative expenses relate to the operation and
leasing costs of our corporate office.
General and administrative expenses for the nine-month period ended
September 30, 2003 were $119,545 compared to $751,323 for the nine-month period
ended September 30, 2002. General and
Administrative expenses decreased by approximately 84% from the comparable
period as the Company consolidated operations after its merger in 2002. The company, in anticipation of its merger
made purchases of equipment and other office related supplies in conjunction
with the start of initial business operations in the nine-month period ended
September 30, 2002.
PAYROLL. Payroll expense consists
primarily of management and employee salaries.
Total payroll expense for the nine-month period ended September 30, 2003
was $171,209. The Company incurred no payroll
expense for the nine-month period ended September 30, 2002.
PROFESSIONAL FEES. Professional fees include
fees paid to our accountants and attorneys.
Our professional fees were $54,693 for the nine-month period ended September 30,
2003. The Company incurred no
professional fees for the nine-month period ended September 30, 2002.
CONSULTING. Consulting expense includes fees
paid to consultants in relation to the preparation of required SEC filings, and
to individuals engaged to assist management in the furtherance of our business
plan. Consulting expenses for the
nine-month period ended September 30, 2003 were $508,750 compared to $276,056
for the nine-month period ended September 30, 2002. Consulting expense increased by approximately 84% from the
comparable period as the Company has engaged the services of additional consultants
to assist in the furtherance of our business model.
SOFTWARE
DEVELOPMENT. Software
Development expense was minimal as our software systems; communication
tools and suite of software applications are complete. Software
Development expense for the nine-month period ended September 30, 2003
was $3,950. The Company incurred no software development expense for the
nine-month period ended September 30, 2002.
DEPRECIATION. Depreciation was $246,274
for the nine-month period ended September 30, 2003 compared to $80,383 for the
nine-month period ended September 30, 2002.
This represents depreciation on the assets of the Company. Depreciation expense has increased
significantly from the comparable period due to the assets purchased in the
nine-month period ended September 30, 2002, which are now on depreciation
schedules.
TOTAL OPERATING EXPENSES. Total operating
expenses for the nine-month period ended September 30, 2003 were $1,104,421
compared to $1,107,762 for the nine-month period ended September 30, 2002. Total operating expenses were almost
unchanged from the previous period due mainly to an increase in consulting
expense and depreciation offset by a decrease in general and administrative
expenses. Our most significant
operating expenses are consulting and depreciation expenses.
LOSS ON DEBT
SETTLEMENT. In the
nine-month period ended September 30, 2003 the Company retired past debts
valued at $62,094 as compared to retired past debts of $68,363 for the
nine-month period ended September 30, 2002. We will continue to retire our outstanding
debt as revenue allows.
INTEREST
INCOME. Interest income was
$561 for the nine-month period ended September 30, 2003 compared to $2,852 for
the nine-month period ended September 30, 2002.
INTEREST
EXPENSE. Interest expense was
$35,558 for the nine-month period ended September 30, 2003 compared to $22,650
for the nine-month period ended September 30, 2002. Interest expense increased by approximately 57% as a result of
the receipt of loans totaling $130,606 in the nine-month period ended September
30, 2003 that bear an interest rate of 9%.
LOSS FROM OPERATIONS/NET LOSS. Our loss from
operations was $1,176,814 for the nine-month period ended March 31, 2003
compared to $1,194,368 for the nine-month period ended September 30, 2002. It should be expected that we will continue
to incur losses from operations until such time as revenues can be generated to
cover such 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, particularly for the company’s hotel/motel and
apartment products; 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, and to establish
relationships with large hotel and/or motel chains for our hotel/motel
products.
Liquidity
and Capital Resources
Management believes our cash on hand of $44,347 will
not be sufficient to fund ongoing fiscal 2003 and 2004 operations and provide
for our working capital needs given we have negative working capital of
$552,260. Thus we will from time to
time need to raise additional funds through capital markets. 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 raise
additional capital and 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 an issuance of common stock and through the issuance of notes. During the nine months ended September 30,
2003, we received loans totaling $130,606 from a Company shareholder and
director.
During our normal course of business, we will
experience net negative cash flows from operations, pending receipt of
revenues. Further, we will be obtaining
financing to fund operations through additional common stock offerings, note
issuances and bank borrowings, to the extent available, or to obtain additional
financing to the extent necessary to augment our available cash on hand.
All investor inquiries should be directed via mail
to Mr. Robert Cox, President, CareDecision Corporation, 2660 Townsgate Road,
Suite 300, Westlake Village, California 91361.
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings
In
January 2003 M&E Equities, LLC (“M&E”) and Blimie Mendlowitz (the
“plaintiffs”) filed a complaint against CareDecision Corporation, Medicius,
Inc., Keith Berman, and William Lyons (the “defendants”) for failure to repay
note principal and interest and failure to deliver common stock warrants
pursuant to the terms of a Senior Convertible Note Subscription Agreement and a
Senior Convertible Promissory Note Agreement issued to the plaintiffs.
Specifics regarding the
case are as follows:
Case Name: M&E Equities, LLC, and Blimie
Mendlowitz, against CareDecision Corporation, Medicius, Inc., Keith Berman, and
William Lyons.
Court:
Supreme Court of The State of New York County of New York.
Case Number: 600092-03
In June 2003 all parties executed a Settlement
Agreement. The Company believes that
the terms of the settlement have been fully satisfied, and has been notified by
Plaintiffs that the litigation has ended, but as of November 10, 2003 had not
received a court executed dismissal.
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. |
|
31 |
Rule 13a-14(a)/15d-14(a) Certification |
|
32 |
Certification under Section 906 of the
Sarbanes-Oxley Act (SECTION 1350) |
Item 6(b) – Reports Filed on Form 8-K
For the quarter ended September 30, 2003 the Company
filed a report on Form 8-K with the Securities and Exchange Commission on July
11, 2003. The Company announced, under
Item 5. Other Events, an eight percent (8%) dividend payable in common
stock. The shares, which are restricted
securities, were distributed on or before October 15, 2003, to shareholders of
record as of July 21, 2003. In the
computation of the eight percent (8%) restricted common stock dividend, any fractional
remainder was rounded up to the nearest whole share. The Company requested that each shareholder turn in their
certificate(s) in exchange for a new certificate(s) on or prior to September
30, 2003 to receive the dividend, although this was not mandatory to receive
the dividend. Further, on July 1, 2003,
the Company changed its address. The
Company's new address is 2660 Townsgate Road, Suite 300, Westlake Village, CA
91361. The Company's new phone number
is (805) 446-1973 and new fax number is (805) 446-1983. No financial statements were included in
this report.
[balance of this page
intentionally left blank]
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 12, 2003_________
By: /s/ Robert Cox
Robert Cox
President and CEO
Date:
__November 12, 2003__________
By: /s/ Keith Berman
Keith Berman
Secretary and Treasurer/CFO