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 91-2105842
------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2 Penn Plaza, 15th Floor, Suite 1500-53, New York, NY 10121
----------------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
(212) 292-4959
--------------
(Registrant's telephone number, including area code)
_______________________________________________________________
(Former name, former address and former 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 (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
/1/
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 5
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)
Consolidated Statements of Cash Flows For the Nine Months 6
Ended September 30, 2002 and 2001 (unaudited) and For the
Period July 6, 2000 (Inception) to September 30, 2002
(unaudited)
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
/2/
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)
/3/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
(unaudited)
September 30,
Assets 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; 69,681
100,000,000 shares
authorized, 69,681,174 shares issued
and outstanding
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.
/4/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Operations
(unaudited)
For the three For the nine July 6, 2000
months ended months ended (inception) to
September 30, September 30, September 30,
2002 2001 2002 2001 2002
---------- ---------- ----------- ---------- -----------
Revenue $ 500 $ - $ 1,555 $ - $ 1,555
---------- ---------- ----------- ---------- -----------
Expenses:
General & administrative 159,028 - 751,323 4,974 766,514
expenses
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.
/5/
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)
September 30, to
------------------------- 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.
/6/
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.
/7/
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.
/8/
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.
/9/
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.
/10/
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 provider of pharmacy benefit services
to health insurers. Under this agreement, the Company plans to introduce the
Company's products to Pharmacare's client health insurers.
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.
/11/
PART II - OTHER INFORMATION
Item 6(a) - Exhibits
Exhibit Name and/or Identification of Exhibit
Number
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.
/12/
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: /s/ Robert Cox
_____________________________
Robert Cox, President and CEO
Date: November 8, 2002
By: /s/ Michael Vogel
________________________________
Michael Vogel, Treasurer and CFO
/13/