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: June 30, 2003
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
incorporation or organization) Identification No.)
2660 Townsgate Road, Westlake Village, Suite 300, CA 91361 91361
(Address of principal executive offices) (Zip Code)
(805) 446-1973
(Registrant's telephone number, including area code)
2 Penn Plaza, 15th Floor, Suite 1500-53, New York, NY, 10121
(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:
86,606,012
/1/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Independent Accountant's Review Report 4
Consolidated Balance Sheet June 30, 2003 (unaudited) 5
Consolidated Statements of Operations For the Three and Six 6
Months Ended June 30, 2003 and 2002 (unaudited) and For the
Period July 6, 2000 (Inception) to June 30, 2003 (unaudited)
Consolidated Statements of Cash Flows For the Six Months 7
Ended June 30, 2003 and 2002 (unaudited) and For the Period
July 6, 2000 (Inception) to June 30, 2003 (unaudited)
Notes to Financial Statements 8
Item 2. Management's Discussion and Plan of Operation 11
PART II - OTHER INFORMATION
Item 6. Exhibits 15
SIGNATURES 16
/2/
Part I - Financial Information
Item 1. Financial Statements
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
as of
June 30, 2003 (unaudited)
and
Consolidated Statements of Operations
for the Three and Six Months Ended
June 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to June 30, 2003 (unaudited)
and
Consolidated Statements of Cash Flows
for the Six Months Ended
June 30, 2003 and 2002 (unaudited),
and For the Period
July 6, 2000 (Inception) to June 30, 2003 (unaudited)
/3/
Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 fax
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
Board of Directors
CareDecision Corporation
(formerly ATR Search Corporation)
(a Development Stage Company)
New York, NY
We have reviewed the accompanying balance sheet of CareDecision
Corporation (formerly ATR Search Corporation) (a Nevada
corporation) (a development stage company) as of June 30, 2003
and the related statements of operations for the three and six
months ended June 30, 2003 and 2002 and for the period July 6,
2000 (Inception) to June 30, 2003, and statements of cash flows
for the six months ended June 30, 2003 and 2002 and for the
period July 6, 2000 (Inception) to June 30, 2003. These
financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the
objective of expressing an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the accompanying financial
statements referred to above for them to be in conformity with
generally accepted accounting principles in the United States of
America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 2 to the financial statements, the Company has had limited
operations and has not commenced planned principal operations.
This raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
We previously audited, in accordance with generally accepted
auditing standards, the balance sheet of CareDecision Corporation
(formerly ATR Search Corporation) (a development stage company)
as of December 31, 2002, and the related statements of
operations, stockholders' equity, and cash flows for the year
then ended (not presented herein) and in our report dated April
4, 2003, we expressed an unqualified opinion on those financial
statements.
/s/ Beckstead and Watts, LLP
August 12, 2003
/4/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
(unaudited)
June 30,
Assets 2003
-------------
Current assets:
Cash and equivalents $ 11,913
-------------
Total current assets 11,913
-------------
Fixed assets, net 1,319,386
-------------
$ 1,331,299
=============
Liabilities and Stockholders' Equity
Current liabilities:
Note payable to shareholder $ 79,657
Notes payable 567,517
-------------
Total current liabilities 647,174
-------------
Convertible notes - related party 13,548
-------------
660,722
-------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $0.001 par value, 200,000,000 shares
authorized, 86,606,012 shares issued and outstanding 86,606
Additional paid-in capital 3,608,941
Treasury stock (96,750)
(Deficit) accumulated during development stage (2,928,220)
-------------
670,577
-------------
$ 1,331,299
=============
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 Operations
(unaudited)
For the For the
three months six months July 6, 2000
ended June 30, ended June 30, (Inception) to
------------------- ------------------ June 30,
2003 2002 2003 2002 2003
--------- -------- -------- --------- -------------
(Restated) (Restated) (Restated)
Revenue $ 1,350 $ - $ 1,850 $ 1,055 $ 3,850
--------- -------- -------- --------- -------------
Expenses:
General and
administrative
expenses 45,111 3,720 83,989 182,849 166,675
Payroll expense 63,913 - 122,794 - 309,613
Professional fees 12,658 - 43,228 - 215,080
Consulting expense 125,000 290,000 356,000 409,446 1,675,482
Software development 2,950 - 3,950 - 132,950
Depreciation 80,623 - 165,652 1,393 326,418
--------- -------- -------- --------- -------------
Total expenses 330,255 293,720 775,613 593,688 2,826,218
--------- -------- -------- --------- -------------
Other income (expenses):
(Loss) on debt
settlement (37,094) - (37,094) - (63,019)
Interest income 1 - 561 967 2,791
Interest (expense) (11,981) - (22,804) (8,251) (45,624)
--------- -------- -------- --------- -------------
Net (loss) $(377,979)$(293,720)$(833,100)$(599,917) $ (2,928,220)
========= ======== ======== ========= =============
Weighted average
number of
common shares
outstanding -
basic and fully
diluted 84,432,887 21,891,703 83,473,288 10,822,178
========== ========== ========== ==========
Net (loss) per share -
basic and fully
diluted $ (0.00) $ (0.01) $ (0.01) $ (0.06)
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
/6/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
For the six months ended July 6,2000
June 30, (inception) to
-------------------------- June 30,
2003 2002 2003
------------ ------------ --------------
Cash flows from operating
activities
Net (loss) $ (833,100) $ (599,917) $ (2,928,220)
Shares issued for services 356,000 409,446 1,675,482
Loss on debt settlement 37,094 - 63,019
Depreciation 165,652 1,393 326,418
Adjustments to reconcile net
(loss) to net cash (used)
by operating activities:
(Increase) decrease in notes
receivable 5,376 (24,900) -
Decrease in loan to officer 10,999 - -
Net cash (used) by operating ------------ ------------ --------------
activities (257,979) (213,978) (863,301)
------------ ------------ --------------
Cash flows from financing
activities
Proceeds from convertible
notes - related party 50,000 - 50,000
Proceeds from notes payable - 537,573 536,722
Proceeds from note payable
to shareholder 113,791 - 79,657
Payments on note payable
to shareholder (5,000) (20,000) (31,165)
Issuance of common stock - - 240,000
Net cash provided by financing ------------ ------------ --------------
activities 158,791 517,573 875,214
------------ ------------ --------------
Net increase in cash (99,188) 303,595 11,913
Cash - beginning 111,101 4 -
------------ ------------ --------------
Cash - ending $ 11,913 $ 303,599 $ 11,913
============ ============ ==============
Supplemental disclosures:
Interest paid $ - $ - $ -
============ ============ ==============
Income taxes paid $ - $ - $ -
============ ============ ==============
Non-cash transactions:
Number of shares issued for
services provided 8,000,000 12,440,000 27,617,737
============ ============ ==============
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.
/7/
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
June 30, 2003 of $2,928,220. 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 three months ending June 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 $165,652 for the six-month period
ended June 30, 2003.
/8/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 5 - Notes payable - related party
During the six months ended June 30, 2003, the Company received
loans totaling $113,791 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 six months ended June 30, 2003, the Company recorded
interest expense of $22,804.
Note 6 - Convertible notes
During the six months ended June 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 six months ended June 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 six months ended June 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 six months ended June 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.
There have been no other issuances of preferred or common stock.
Note 8 - Related party transactions
During the six months ended June 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 six months ended June 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 six months ended June 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.
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
8,000,000 shares of stock pursuant to the plan during the six
months ended June 30, 2003.
/9/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 10 - Subsequent events
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 will issue 1,500,000 shares of $0.001 par value
common stock and stock options to purchase 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 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 will issue 4,000,000 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 legended, restricted shares.
On July 10, 2003, the Company entered into a consulting
agreement with Thomas Chillemi to perform corporate
development services for the Company. As consideration, the
Company will issue 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 to perform medical
information technology services for the Company. As
consideration, the Company will issue 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.
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 will issue 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 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 will issue 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.
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.
/10/
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 principal products are: an E-Health handheld information
appliance (PDA) software application package, and an E-commerce
handheld information appliance and network designed for the
hotel, motel and apartment marketplace. 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 on a wireless PDA
Internet appliance. These 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
prospective and retrospective commerce.
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 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.
/11/
Our technologies are grounded in the central need to furnish
the doctor with crucial point-of-care patient information rapidly
and reliably via a PDA. It utilizes 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 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).
Results of Operations
The following is an itemization of our results of operations
for the six-month period ended June 30, 2003. In the comparable
period ended June 30, 2002, the Company had yet to begin
significant operations and therefore there were no expenses
associated with these items.
REVENUES. Total revenues for the six-month period ended June 30,
2003 were $1,850. 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 six-month
period ended June 30, 2003 were $83,989 compared to $182,849 for
the six-month period ended June 30, 2002. General and
Administrative expenses decreased by approximately 54% 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
six-month period ended June 30, 2002.
PAYROLL. Payroll expense consists primarily of management and
employee salaries. Total payroll expense for the six-month
period ended June 30, 2003 was $122,794. The Company incurred no
payroll expense for the six-month period ended June 30, 2002.
PROFESSIONAL FEES. Professional fees include fees paid to our
accountants and attorneys. Our professional fees were $43,228
for the six-month period ended June 30, 2003. The Company
incurred no professional fees for the six-month period ended June
30, 2002.
/12/
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 six-month period
ended June 30, 2003 were $356,000 compared to $409,446 for the
six-month period ended June 30, 2002. Consulting expense
decreased by approximately 13% from the comparable period as the
Company has consolidated the use of consultants after its merger
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
six-month period ended June 30, 2003 was $3,950. The Company
incurred no software development expense for the six-month period
ended June 30, 2002.
DEPRECIATION. Depreciation was $165,652 for the six-month period
ended June 30, 2003 compared to $1,393 for the six-month period
ended June 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 six-
month period ended June 30, 2002, which are now on depreciation
schedules.
TOTAL OPERATING EXPENSES. Total operating expenses for the six-
month period ended June 30, 2003 were $775,613 compared to
$593,688 for the six-month period ended June 30, 2002. Total
operating expenses increased by approximately 31% due mainly to
our addition of staff and subsequent incurrence of payroll
expense and the increase in depreciation expense on the assets of
the Company. Our most significant operating expenses are
consulting, payroll and depreciation expenses.
LOSS ON DEBT SETTLEMENT. In the six-month period ended June 30,
2003 the Company retired past debts valued at $37,094. There was
no debt retired in the comparable six-month period ended June 30,
2002.
INTEREST INCOME. Interest income was $561 for the six-month
period ended June 30, 2003 compared to $967 for the six-month
period ended June 30, 2002.
INTEREST EXPENSE. Interest expense was $22,804 for the six-month
period ended June 30, 2003 compared to $8,251 for the six-month
period ended June 30, 2002. Interest expense increased
significantly as a result of the receipt of loans totaling
$113,791 in the six-month period ended June 30, 2003 that bear an
interest rate of 9%.
LOSS FROM OPERATIONS/NET LOSS. Our loss from operations was
$833,100 for the six-month period ended March 31, 2003 compared
to $599,917 for the six-month period ended June 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.
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Liquidity and Capital Resources
Management believes our cash on hand of $11,913 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 $635,261. 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 six months ended June 30, 2003, we received loans
totaling $113,791 from a Company shareholder and director. The
notes bear interest at 9% per annum and are due 365 days from
date of issuance. In addition, during the six months ended June
30, 2003, we received $100,150 from Robert Cox, President of
CareDecision Corporation. This note bears an interest rate of 9%
per annum and is due 365 days from date of issuance.
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.
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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.
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 June 30, 2003 the Company filed a
report on Form 8-K with the Securities and Exchange Commission on
May 20, 2003. The Company reported under Item 9. Regulation FD
Disclosures that they had signed an agreement with associated
hotel owners throughout Minnesota and North Dakota. Further,
under Item 7. Financial Statements and Exhibits the Company filed
the Agreement dated April 20, 2003 by and between CareDecision
Corporation and the corresponding hotel/motel owners and
residence centers. No financial statements were included in this
report.
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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
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(Registrant)
Date: August 13, 2003
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By: /s/ Robert Cox
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Robert Cox
President and CEO
Date: August 13, 2003
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By: /s/ Keith Berman
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Keith Berman
Secretary and Treasurer/CFO
/16/