As filed with the Securities and Exchange Commission on August 28,
2003
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UNITED STATES
Registration No. 333-101562
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Amendment 4)
FORM SB-2/A
REGISTRATION STATEMENT
Under
The Securities Act of 1933
CAREDECISION CORPORATION
(Name of Small Business Issuer in Its Charter)
(Primary Standard Industrial Classification Code Number)
Nevada 2660 Townsgate Road, Suite 300 91-2105842
Westlake Village, CA 91361
(631) 544-0181
(State of Jurisdiction (Address, and Telephone Number of (I.R.S. Employer)
of Incorporation or Principal Executive Offices Identification
Organization) and Principal Place of Business) Number)
Corporate Agents of Nevada
4955 S. Durango Dr., Ste. 214
Las Vegas, NV. 89113
(702) 948-7501
(Name, Address, and Telephone Number of Agent for Service)
Copies of Communications to:
Thomas C. Cook, Esq.
Law Offices of Thomas C. Cook, Ltd.
4955 S. Durango Dr., Suite 214
Las Vegas, Nevada 89113
Telephone: (702) 952-8519
Facsimile: (702) 952-8521
Approximate date of commencement of proposed sale to the
public: From time to time after this registration statement
becomes effective.
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933
(the "Securities Act"), check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering. "
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. "
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. "
If the delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. "
If any of the securities being registered on this form are being
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, please check the following
box. x
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CALCULATION OF REGISTRATION FEE
Title of Each Number of Proposed Maximum Proposed Maximum Amount of
Class Shares Offering Price Aggregate Registartion
Of Securities to Be Per Share (2) Offering Fee
To Be Registered (1) Price
Registered
Common Stock 75,551,018 $0.060 $4,533,061 $906.61
(1) Estimated solely for purposes of calculating the
registration fee pursuant to Rule 457. Represents the maximum
amount of shares of our common stock that we will be required to
register in accordance with our Merger Agreement as well as
shares issued and distributed pursuant to consulting agreements,
note conversions, and shares underlying notes and warrant
conversions.
(2) Represents the average closing bid price of our common stock
as of August 28, 2003.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall
become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission. We
may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This Prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state
in which the offer or sale is not permitted.
/3/
Subject to Completion, Dated August 28, 2003
PROSPECTUS
CAREDECISION CORPORATION
75,551,018 Shares of Common Stock
This Prospectus relates to the registration of up to
75,551,018 shares of common stock of the Company. Of
these shares, 36,800,582 have been issued pursuant to a merger
agreement between the Company and Medicius, Inc. dated 6/28/02;
12,055,522 were issued pursuant to Consulting Agreements as
follows: (i) Paradigm Partners received 2,539,574 shares on
9/30/02; (ii) Robert Jagunich received 4,127,093 shares on
12/11/02; (iii) Barbara Asbell received 1,000,000 shares on
12/13/02; and (iv) Wizard Enterprises received 2,500,000 shares
on 12/13/02 and 1,888,855 shares on 12/20/02.
12,243,338 shares have been issued pursuant to the
retirement of notes as follows: (i) 1,267,963 shares to Keith
Berman for retirement of $42,266.10 note on 9/30/02; (ii) 875,000
shares to Care.net for retirement of a $16,500 note on 9/30/02;
(iii) 8,000,000 to M&E Equities, LLC representing those
authorized shares that underlie a $475,000 face value Note due
5/24/02; (v) 1,538,500 to Thomas Chillemi for retirement of
$50,000 note on 4/22/03, and (vi) 561,875 to David Mizrahi for
settlement of $22,475 note on 5/21/03. 180,000 shares
distributed to David Mizrahi for conversion of Medicius Class "A"
Purchase Warrants in Medicius, Inc., on a 3:1 basis of common
shares 180,000 of CareDecision Corporation. 6,631,576 shares
distributed to Care.net's shareholders post the Medicius Merger
and 2,500,000 shares issued to Care.net on 2/23/03 pursuant to an
Intellectual Property Purchase Agreement; 640,000 shares were
issued to Robert Jagunich pursuant a personal services agreement
dated 9/30/02; 500,000 shares may be issued to Robert Koch
pursuant to warrants relating to consulting agreements.
4,000,000 shares were authorized on June 3, 2003, pursuant to the
Definitive 14a options to be issued as follows: (i) 1,250,000 to
Keith Berman; (ii) 1,250,000 to William Lyons; and (iii)
1,500,000 to Robert Cox.
There is no minimum number of shares that must be sold in
this offering. Information regarding the selling stockholders
and the times and manner in which they may offer and sell the
shares under this Prospectus is provided under the headings
"Issuance of Securities to the Selling Stockholders" commencing
on page 12 and "Plan of Distribution" commencing on page 17.
Although the Company has received the proceeds from the sale of
the common stock and the warrants and may receive further
proceeds from the exercise of the options and warrants, we will
not receive any of the proceeds from sales of the common stock by
the selling stockholders under this Prospectus. To the knowledge
of the Company, the selling stockholders have not made any
arrangements with any brokerage firm, underwriter or agent for
the sale of the shares of common stock.
The common stock is quoted on the OTC Bulletin Board
("OTCBB") under the symbol CDED but it is not listed on a
national securities exchange. On August 28, 2003 the last reported
sale price of the common stock was $0.06 per share.
Investing in the common stock involves a high degree of
risk, which is described in the " Risk Factors" beginning on
page 7 of this Prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
Prospectus. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is August 8 2003.
/4/
Table of Contents
Prospectus Summary 6
Risk Factors 7
Risk Factors Related to our Business 7
Risk Factors Related to this Offering 9
Use of Proceeds 11
Determination of Offering Price 11
Dividend Policy 11
Issuance of Securities to the Selling Stockholders 12
Plan of Distribution 18
Legal Proceedings 20
Directors and Executive Officers 21
Security Ownership of Certain Beneficial Owners and Management22
Description of Securities 23
Market for Common Stock 24
Commission's Position on Indemnification for Securities Act
Liabilities 25
Description of Business 26
Organization and Business 26
Patents or Trademarks 27
Operations 28
Medical Field Applications 28
Real Estate and Hotel/Motel Applications 31
SateLink 31
Competition 32
Industry 33
Employees 34
Acquisitions and name change 34
Government Regulation 34
Management's Discussion and Analysis of Financial Condition and
Results of Operations 35
Description of Property 36
Certain Relationships And Related Transactions 36
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Prospectus Summary
This summary highlights selected information contained
elsewhere in this Prospectus. It may not contain all of the
information you should consider before investing in the Company's
common stock. You should carefully consider all information
contained in this Prospectus and particularly the section on Risk
Factors set forth below before investing in the shares of common
stock offered under this Prospectus.
The Company
CareDecision Corporation, a Nevada corporation (the
"Company") formed in 2001, is a developmental stage company with
a principal business objective to provide Internet enhanced,
wireless ("Wi-Fi") information technology and data management
technology (IT) for:
(a) Physicians, licensed medical service providers such as
diagnostic testing laboratories, and medical insurers;
(b) Hotels, motels and single building, multi-unit apartment
buildings with a desire to offer local advertising and electronic
services to their tenants/guests; and
(c) Cable and wireless media enterprises that employ large field-
based installation and repair personnel.
The Company's fiscal year ends on December 31. The
Company's principal executive office is located at 2660 Townsgate
Road, Suite 300, Westlake Village, CA. 91361. The Company's
telephone number is (805) 446-1973. The common stock is quoted
on the OTCBB under the trading symbol CDED, but it is not listed
on a national securities exchange. Because the common stock is
not listed for trading on any national securities exchange there
may be a limited market for the Company's shares.
The Offering
This Prospectus relates to the registration of up to
75,551,018 shares of common stock of the Company. Of
these shares, 36,800,582 have been issued pursuant to a merger
agreement between the Company and Medicius, Inc. dated 6/28/02;
12,055,522 were issued pursuant to Consulting Agreements as
follows: (i) Paradigm Partners received 2,539,574 shares on
9/30/02; (ii) Robert Jagunich received 4,127,093 shares on
12/11/02; (iii) Barbara Asbell received 1,000,000 shares on
12/13/02; and (iv) Wizard Enterprises received 2,500,000 shares
on 12/13/02 and 1,888,855 shares on 12/20/02.
12,243,338 shares have been issued pursuant to the
retirement of notes as follows: (i) 1,267,963 shares to Keith
Berman for retirement of $42,266.10 note on 9/30/02; (ii) 875,000
shares to Care.net for retirement of a $16,500 note on 9/30/02;
(iii) 8,000,000 to M&E Equities, LLC representing those
authorized shares that underlie a $475,000 face value Note due
5/24/02; (v) 1,538,500 to Thomas Chillemi for retirement of
$50,000 note on 4/22/03, and (vi) 561,875 to David Mizrahi for
settlement of $22,475 note on 5/21/03. 180,000 shares
distributed to David Mizrahi for conversion of Medicius Class "A"
Purchase Warrants in Medicius, Inc., on a 3:1 basis of common
shares 180,000 of CareDecision Corporation. 6,631,576 shares
distributed to Care.net's shareholders post the Medicius Merger
and 2,500,000 shares issued to Care.net on 2/23/03 pursuant to an
Intellectual Property Purchase Agreement; 640,000 shares were
issued to Robert Jagunich pursuant a personal services agreement
dated 9/30/02; 500,000 shares may be issued to Robert Koch
pursuant to warrants relating to consulting agreements.
4,000,000 shares were authorized on June 3, 2003, pursuant to the
Definitive 14a options to be issued as follows: (i) 1,250,000 to
Keith Berman; (ii) 1,250,000 to William Lyons; and (iii)
1,500,000 to Robert Cox.
Selling Stockholders
Medicius shareholders, Paradigm Partners, Robert Jagunich,
Barbara Asbell, Wizard Enterprises, Keith Berman (an Officer of
the Company), Care.net, Care.net shareholders, M&E Equities, LLC,
Thomas Chillemi, Keith Berman, William Lyons, Robert Jagunich and
Robert Koch
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Net Proceeds to the Company
Although the Company will receive no proceeds from sales of
common stock by the selling stockholders, the Company reduced its
note obligations by $3,681,463 and may receive up to $20,000 if
the selling stockholders exercise all their warrants with cash,
instead of with the cashless exercise feature (if applicable).
If all of the options were exercised with cash, instead of with
the cashless exercise feature (if applicable), the Company would
receive proceeds of $300,000.
Risk Factors
Risks Related To Our Business
WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE,
WHICH MEANS THAT WE MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS WE
OBTAIN ADDITIONAL FUNDING.
We have historically lost money. As a result, the Company incurred
accumulated net losses from June 21, 2001 (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. Future losses are likely to occur. Accordingly, we may
experience significant liquidity and cash flow problems if we are not
able to raise additional capital as needed and on acceptable terms.
No assurances can be given that we will be successful in reaching or
maintaining profitable operations.
We had a major shift in our business strategy in 2003. It was not until
the last quarter of 2002 that we focused on the integration and marketing
of our systems and applications to non-medical industries, particularly
motels, hotels, and real estate management company' properties. In this
regard, we have established only informal agreements and have not generated
revenue from this, or any other, business sector. We have a limited
operating history upon which to evaluate our business plan and prospects.
f we are unable to obtain additional external funding or generate revenue
from the sales of our products, we could be forced to curtail or cease our
operations.
WE DO NOT HAVE ADEQUATE FUNDS TO EXECUTE OUR BUSINESS PLAN.
Our operations have never generated any revenues. Presently, we do not have
adequate cash from operations or financing activities to meet our short-
term or long-term needs. We do not have sufficient cash to pay most of our
current obligations. Accordingly, we are periodically seeking additional
financing. There is no assurance that any financing will be available on
terms acceptable to us, or at all. Based upon our present operating
expenses, the commitment of our executive officers and consultants to
accept shares of our common stock in lieu of cash payments, and our
expectation that we will not immediately generate revenues from operations
or other sources, we believe we will be able to operate for a minimum of
six months.
WE DO NOT CURRENTLY HAVE ADEQUATE PERSONNEL TO MEET OUR LONG-TERM BUSINESS
OBJECTIVES AND BELIEVE THAT OUR BUSINESS AND GROWTH WILL SUFFER IF WE ARE
UNABLE TO HIRE AND RETAIN QUALITY KEY PERSONNEL THAT ARE IN HIGH DEMAND.
As of August 28, 2003, we have hired a total of 14 people who are either
employees or independent contractors. Of these, 4 are focused on product
engineering and development; 4 serve in administrative and senior management
capacities, and 5 primarily focus on the marketing of our products and
oversee related tasks. Our growth and success in good part depends on
ability to hire and retain highly qualified individuals in these areas as
well as managerial, sales and operational personnel. All of these
individuals are in high demand and we may not be able to attract the
staff we need. In addition, the loss of the services of any of our senior
management could have a material adverse effect on our business, financial
condition and operating results.
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AUDITORS HAVE ISSUED AN OPINION RAISING SUBSTANTIAL DOUBT AS TO OUR ABILITY
TO CONTINUE AS A GROWING CONCERN, WHICH MAY DIMINISH YOUR RETURN.
In a letter that accompanies this application, our accountant, G. Brad
Beckstead, says in part, 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 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
21, 2001 (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.
COMPETITION COULD ADVERSELY AFFECT OUR ABILITY TO EARN REVENUES.
Many of our competitors have longer operating histories, larger clientele
bases, better service recognition and significantly greater financial,
marketing and other resources than do we. Increased competition may result
in reduced operating margins and a loss of market share. There can be no
assurance that we will be able to compete successfully against current and
future competitors, and competitive pressures faced by us could harm our
operating results, our business prospects, and financial condition.
IF WE ARE NOT ABLE TO COMPETE EFFECTIVELY IN THE HIGHLY COMPETITIVE
COMMUNICATIONS INDUSTRY, WE MAY BE FORCED TO REDUCE OR CEASE OPERATIONS.
Our ability to compete effectively with our competitors depends on the
following factors, among others:
the performance of our communication software and application technology
in a manner that meets customer expectations;
the success of our efforts to develop effective channels of distribution
for our products;
our ability to price our products that are of a quality and at a price
point that is competitive with similar or comparable products offered by
our competitors;
general conditions in the communication software and application
industry;
the success of our efforts to develop, improve and satisfactorily address
any issues relating to our internet bases communication software and
application industry; and
Our failure to successfully develop our technology, products and
distribution channels could cause us to reduce or cease operations.
OUR INABILITY TO SUCCESSFULLY LICENSE, MANUFATURE AND MARKET OUR INTELLECTUAL
PROPERTY AND TECHNOLOGIES WILL ADVERSELY AFFECT OUR ABILITY TO EARN REVENUES.
Our success depends upon our ability to license and market our intellectual
property and technologies. We do not have any patents, licenses or royalty
agreements, although we have filed for patents. We must devote substantial
management time and financial resources to locate strategic licensing,
manufacturing and marketing partners. We have entered into licensing and
marketing arrangements to license, manufacture and promote our intellectual
property and technologies with one company, but no sales have been generated.
We may be unable to enter into agreements with other parties on terms
acceptable to us and such arrangements may not be profitable. Our failure
to enter into such agreements may force us to undertake the manufacturing
and marketing of our products ourselves, which will increase our administrative
and operating costs. Such a result will have a material adverse effect on our
costs, which may outstrip our resources and, in turn, force us to curtail our
business plans. In such an event, our ability to earn revenues will be harmed.
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OTHER PARTIES MAY ASSERT THAT OUR TECHNOLOGY INFRINGES ON THEIR INTELLECTUAL
PROPERTY RIGHTS, WHICH COULD DIVERT MANAGEMENT TIME AND RESOURCES AND POSSIBLY
FORCE OUR COMPANY TO REDESIGN OUR TECHNOLOGY.
Technology-based industries, such as ours, are characterized by an increasing
number of patents and frequent litigation based on allegations of patent
infringement. From time to time, third parties may assert patent, copyright
and other intellectual property rights to technologies that are important
to us. While there currently are no outstanding infringement claims pending
by or against us, we cannot assure you that third parties will not assert
infringement claims against us in the future, that assertions by such parties
will not result in costly litigation, or that they will not prevail in any such
litigation. In addition, we cannot assure you that we will be able to license
any valid and infringed patents from third parties on commercially reasonable
terms or, alternatively, be able to redesign products on a cost-effective basis
to avoid infringement. Any infringement claim or other litigation against or by
us could have a material adverse effect on us and could cause us to reduce or
cease operations.
WE MAY NOT EFFECTIVELY MANAGE THE GROWTH NECESSARY TO EXECUTE OUR BUSINESS
PLAN, WHICH COULD ADVERSELY EFFECT THE QUALITY OF OUR OPERATIONS AND OUR COSTS.
In order to achieve the critical mass of business activity necessary to
successfully execute our business plan, we must significantly increase the
number of strategic partners and customers that use our technology. This
growth will place significant strain on our personnel, systems and resources.
We also expect that we will continue to hire employees, including technical,
management-level employees, and sales staff for the foreseeable future. This
growth will require us to improve management, technical, information and
accounting systems, controls and procedures. We may not be able to maintain
the quality of our operations, control our costs, continue complying with all
applicable regulations and expand our internal management, technical
information and accounting systems in order to support our desired growth.
We cannot be sure that we will manage our growth effectively, and our failure
to do so could cause us to reduce or cease operations.
Risks Related To This Offering
THE SELLING STOCKHOLDERS INTEND TO SELL THEIR SHARES OF COMMON STOCK IN THE
MARKET, WHICH SALES MAY CAUSE OUR STOCK PRICE TO DECLINE.
The selling stockholders intend to sell in the public market the shares of
common stock being registered in this offering. That means that up to
75,551,018 shares of common stock, the number of shares being registered in
this offering, may be sold. Such sales may cause our stock price to decline.
OUR COMMON STOCK HAS BEEN RELATIVELY THINLY TRADED AND WE CANNOT PREDICT THE
EXTENT TO WHICH A TRADING MARKET WILL DEVELOP.
Before this offering, our common stock has traded on the Over-the-Counter
Bulletin Board. Our common stock is thinly traded compared to larger more
widely known companies in our industry. Thinly traded common stock can be
more volatile than common stock trading in an active public market. We cannot
predict the extent to which an active public market for the common stock will
develop or be sustained after this offering.
OUR COMMON STOCK IS CONSIDERED A "PENNY STOCK" WHICH MAKES IT MORE DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY REQUIREMENTS.
The SEC has adopted regulations, which generally define penny stock to be an
equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to specific exemptions.
Presently, the market price of our common stock is less than $5.00 per share.
Therefore, the SEC "penny stock" rules govern the trading in our common stock.
These rules require, among other things, that any broker engaging in a
transaction in our securities provide its customers with the following:
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A risk disclosure document;
Disclosure of market quotations, if any;
Disclosure of the compensation of the broker and its salespersons in the
transaction; and
Monthly account statements showing the market values of our securities
held in the customer's accounts.
The broker must provide the bid and offer quotations and compensation
information before effecting the transaction. This information must be
contained on the customer's confirmation. Moreover, broker/dealers are
required to determine whether an investment in a penny stock is a suitable
investment for a prospective investor. Generally, brokers may be less willing
to effect transactions in penny stocks. This may make it more difficult for
investors to dispose of our common stock. This could cause our stock price to
decline. In addition, the broker prepares the information provided to the
broker's customer. Because we do not prepare the information, we cannot
assure you that such information is accurate, complete or current.
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Use of Proceeds
All net proceeds from the sale of the common stock covered
by this Prospectus will go to the selling stockholders. The
Company will not receive any proceeds from the sale of the common
stock in this offering. The Company did, however, receive
proceeds from the sale of the common stock and the warrants to
selling stockholders and may receive proceeds from the exercise
of the warrants and/or options. If all of the warrants were
exercised with cash, instead of with a cashless exercise feature,
the Company would receive proceeds of $20,000. If all of the
options were exercised with cash, instead of with the cashless
exercise feature (if applicable), the Company would receive
proceeds of $300,000. These proceeds would be used for general
corporate purposes, including working capital and potential
acquisitions.
Determination of Offering Price
The prices at which the shares of common stock may actually
be sold will be determined by the prevailing public market price
for the shares or by negotiations in private transactions.
Dividend Policy
It is the Company's present policy not to pay cash dividends
and to retain future earnings for use in the operations of the
business and to fund future growth. Any payment of cash
dividends in the future will be dependent upon the amount of
funds legally available, earnings, financial condition, capital
requirements and other factors that the Board of Directors may
think are relevant. The Company does not contemplate or
anticipate paying any cash dividends on the common stock in the
foreseeable future.
On June 23, 2003, the Company announced it would issue an
eight percent (8%) dividend payable in common stock. The shares,
which shall be restricted securities, will be 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 will be rounded
up to the nearest whole share. The Company requests 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 is not mandatory to receive the dividend
Issuance of Securities to the Selling Stockholders.
[Balance of this page intentionally left blank.]
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Issuance of Securities to the Selling Stockholders
The table below sets forth ownership information regarding
the selling stockholders. For purposes of calculating the
percentage of common stock outstanding, any securities not
outstanding that are subject to options, warrants or conversion
privileges are deemed outstanding for the purposes of computing
the percentage of outstanding securities owned by the selling
stockholders. Unless otherwise indicated, the selling
stockholders have the sole power to direct the voting and
investment over the shares owned by them.
The following table lists the common shares held by Medicius
shareholders that were converted and distributed pursuant to the
Medicius merger agreement.
AMOUNT OWNED AMOUNT
INVESTORS
AMOUNT OF AFTER 3:1 WANT
INVESTOR4 INVESTMENT1 CONVERSION2 REGISTERED3
Anfel Trading $147,270.00 3,681,750 3,681,750
Asbell, Barbara $47,100.00 1,177,500 1,177,500
Belcher, Michael $2,100.00 52,500 52,500
Berman, Keith $255,333.00 6,383,325 6,383,320
Binder, Alan $1,200.00 30,000 30,000
CareDecision.net5 $84,323.76 2,108,094 1,761,950
Cox, Robert $26,145.00 653,625 653,625
CRS, LLC $42,000.00 1,050,000 1,050,000
Drizin, Chaim $42,000.00 1,050,000 1,050,000
Eiskowitz, Leon $3,000.00 75,000 75,000
Friedman, Allen Zev $12,800.04 320,001 320,001
Garber, John $78,840.00 1,971,000 1,971,000
Goldner, Ari $17,184.00 429,600 429,600
Jagunich, Robert $167,133.00 4,178,325 4,178,320
Kernochan, William $30,000.00 750,000 750,000
Kriger, Marlene $3,200.04 80,001 80,001
Lyons, William $100,800.00 2,520,000 2,520,000
Makowsky, Frady $3,657.60 91,440 91,440
Makowsky, Joseph $7,315.20 182,880 182,880
Mayer, Benjamin $15,831.48 395,787 395,787
Mendlowitz, Moshe $110,400.00 2,760,000 2,760,00
NY Auto Mall $18,284.76 457,119 457,119
Patel, Sanjay $26,400.00 660,000 660,000
Petras, Michael $14,440.00 360,000 360,000
Poff, Tom $2,100.00 52,500 52,500
P. R. Diamonds $6,000.00 150,000 150,000
Schiffman, Jennifer $3,600.00 90,000 90,000
Schneierson, Daniel $15,831.48 395,787 395,787
Sharabi, Shabnam $1,200.00 30,000 30,000
Weinstein, David $20,790.00 519,750 519,750
Weiss, Morris $1,599.96 39,999 39,999
Williger, Moshe $7,315.20 182,880 182,880
Wolf, Leslie $3,600.00 90,000 90,000
TOTAL $1,318,754.52 32,968,863 32,968,863
/12/
The following table lists the preferred shares held by Medicius
shareholders that were converted and distributed pursuant to the
Medicius merger agreement.
AMOUNT
AMOUNT OWNED INVESOTRS
AMOUNT OF AFTER PREFERRED WANT
STOCK
INVESTOR4 INVESTMENT1 And OTHER REGISTERED3
CONVERSIONS2
Asbell, Barbara6 $25,500.00 637,500 637,500
CareDecision.net5, 6 $70,478.32 1,761,958 1,761,958
Ducat, Frank6 $9,300.00 232,500 232,500
Garber, John6 $17,342.40 433,560 433,560
Mund, Sharon6 $7,555.52 188,888 188,888
Patel, Kiritkumar6 $3,000.00 75,000 75,000
Patel, Mafatbhai6 $3,000.00 75,000 75,000
Patel, Navin A.6 $1,500.00 37,500 37,500
Patel, Sanjay6 $14,092.52 352,313 352,313
Pazderik, Dennis6 $1,500.00 37,500 37,500
TOTAL $153,268.76 3,831,719 3,831,719
Footnotes:
(1) Consideration for Medicius shares at $0.04 per share.
(2) The conversion has been calculated by converting each share
of Medicius common stock into 3.0 common stock shares of
CareDecision Corporation.
(3) Amount investors want to register in this Registration
statement.
(4) The principals for the following corporations are as follows:
Anfel Trading - Jackie Bronner; CareDecision.net - Keith Berman;
CRS, LLC - Glen E. Greenfelder, Jr. and Lloyd McEwan; NY Auto
Mall - Isaac Orzechowitz; and P. R. Diamonds - Pincus Reisz.
(5) CareDecision.net, Inc's. President is also the Secretary,
Treasurer and Director of the Company.
(6) Each share of Medicius Series A Preferred Stock that was
converted into 3.5 common stock shares of CareDecision
The following table lists the shares formerly held by
CareDecision.net, which were distributed pursuant to shareholder
distribution.
CAREDECISION.NET AMOUNT OWNED AMOUNT
SHAREHOLDERS AFTER SHAREHOLDERS
PARTICIPATING CAREDECISION.NET WANT
IN ITS SHAREHOLDER
SHAREHOLDER
DISTRIBUTION DISTRIBUTION REGISTERED
Anfel Trading 524,781 524,781
Asbell, Barbara 218,057 218,057
Belcher, Michael 9,722 9,722
Binder, Alan 5,556 5,556
DeWitt, Catherine 726,000 726,000
Dobson, William F. 838,875 838,875
Drizin, Chaim 1,050,000 1,050,000
Eiskowitz, Leon 38,070 38,070
Friedman, Allen Zev 152,250 152,250
Garber, John 365,001 365,001
Kriger, Marlene 38,070 38,070
Lyons, William 272,224 272,224
/13/
Makowsky, Frady 43,395 43,395
Makowsky, Joseph 87,015 87,015
Mayer, Benjamin 600,000 600,000
NY Auto Mall 217,485 217,485
Patel, Bharat K. 37,500 37,500
Patel Sanjay 122,223 122,223
Petras, Michael 66,667 66,667
Poff, Tom 9,722 9,722
P. R. Diamonds 76,125 76,125
Schiffman, Jennifer 152,250 152,250
Schwartz, David 810,000 810,000
Sharabi, Shabnam 5,556 5,556
Weiss, Morris 61,350 61,350
Williger, Moshe 87,015 87,015
Wolf, Leslie 16,667 16,667
TOTAL 6,631,576 6,631,576
The following table lists the shares that were issued
pursuant to consulting agreements
PARTY DATE CONSIDERATION SHARES
Paradigm Partners1 9/30/02 $101,582 2,539,574/Issued
Robert Jagunich 12/11/02 $165,084 4,127,093/Authorized
Barbara Asbell 12/13/02 $40,000 1,000,000/Authorized
Wizard Enterprises 12/13/02 $100,000 2,500,000/Authorized
Wizard Enterprises 12/20/02 $75,554 1,888,855/Authorized
(1) The principal for the following corporation is as follows:
Paradigm Partners - Joel Weintraub. Paradigm was retained to
provide information technology consulting to the company to
ascertain the applicability of the company's technologies to
other markets. Paradigm had interest and expertise in certain
real-estate markets.
The following table lists the shares that were issued
pursuant to the retirement of notes.
PARTY DATE CONSIDERATION SHARES
Keith Berman 9/30/02 $42,266 1,267,963/Issued
CareDecision.net, Inc.1 9/30/02 $16,500 875,000/Issued
M&E Equities, LLC1 4/20/03 $475,000 8,000,000/Auhtorized
Thomas Chillemi 4/22/03 $50,000 1,538,500/Auhtorized
David Mizrahi 5/15/03 $22,475 561,875/Authorized
(1) The principals are as follows: CareDecision.net, Inc. -
Keith Berman; M&E Equities - Moshe Mendlowitz
The following table lists the shares that were issued
pursuant to an Intellectual Property Purchase Agreement.
PARTY DATE CONSIDERATION SHARES
CareDecision.net, Inc. 02/23/03 $181,250 2,500,000/Authorized
The following table lists the shares that were authorized
pursuant to option agreements.
PARTY DATE CONSIDERATION SHARES
Authorized
Keith Berman 6/3/03 $25,000, and services 1,250,000
Robert Cox 6/3/03 $30,000, and salary 1,250,000
William Lyons 6/3/03 $25,000, and services 1,500,000
/14/
The following table lists the shares that were issued
pursuant to the exercise of warrants.
PARTY DATE CONSIDERATION SHARES
Robert Jagunich 9/30/02 $32,000 640,000/Issued
Robert Koch 10/21/02 $20,000 500,000/Authorized
Assumes that all the warrants are exercised in full and all
shares of common stock held and to be held by the selling
stockholders being offered under this Prospectus are sold, and
that no one of the selling stockholders acquire any additional
shares of common stock before the completion of this offering.
The Company's registration of the shares of common stock does not
necessarily mean that any one of the selling stockholders will
sell all or any of the shares.
The following table lists the shares that were issued pursuant
to the exercise of Medicius, Inc., Class "A" Warrants, which
converted on a 3:1 shares of CareDecision common stock.
PARTY DATE CONSIDERATION SHARES
Robert Jagunich 9/30/02 $32,000 640,000/Issued
David Mizrahi 5/15/03 $14,619 180,000/Authorized
The following table lists the shares have been issued
pursuant to consulting services via Form S-8s.
PARTY DATE SHARES AUTHORIZED
ThomasChillemi3 1/24/03 2,000,000
Joseph Wolf4 1/24/03 3,500,000
Glen Greenfelder2 12/17/02 1,500,000
Robert Jagunich1 10/1/03 4,127,093
Barbara Asbell 9/4/02 950,000
Barbara Asbell 8/7/02 2,000,000
Ken Lowman 7/19/02 3,000,000
Ken Lowman 4/17/02 500,000
Chaim Drizin 3/1/02 475,000
Mark Lancaster 3/1/02 1,350,000
(1) These share were issued pursuant a different consulting
agreement then the shares that were issued on 12/11/02 as
depicted in the table immediately preceding this one.
(2) Mr. Greenfelder was retained to consult regarding the what
forms or other ancillary documents may need to be prepared should
we seek upon ways we could increase our capital, make acquisitions
with stock, and increase ability to obtain financing
(3) Mr, Chillemi was retained was retained to consult with
and advise the Company in connection with medical matters
relating to the Company's foray into the work injury related
industry. Dr. Chillemi also agreed, as part of his
retainer, to advise the Company's Board of Directors on
medical matters and the workings and policies of medical
insurers, a focus of the Company..
(4) Mr. Wolf was retained to consult with and advise the
Company in connection with pharmacological matters. As a
board certified pharmacist Dr. Wolf was retained to provide
very specialized consultation in the formation of
applications for the company's new product for the work
injury industry. Dr. Wolf also agreed, as part of his
retainer, to advise the Company's Board of Directors on
medical matters relating to insurer formulary.
In March of 2001, we issued 11,070,000 shares of
our $0.001 par value common stock to our founders for cash
of $15,025.
In March of 2001, we issued 1,525,000 shares of our
$0.001 par value common stock to G&M Management &
Administrative Services, Ltd., (Andrew Pieri is the
President) for cash of $49,500. The above referenced
transaction was made in accordance with Section 4(2) of the
Securities Act of 1933, as amended, which exempts from
registration transactions by an issuer not involving a
"public offering."
/15/
In March of 2001, we issued 3,500,000 shares of our
$0.001 par value common stock at $0.10 per share to Sarcor
Management, SA, a British Virgin Island corporation, as a
$350,000 down payment on a technology licensing agreement.
In October of 2001, we issued 350,000 shares of our
$0.001 par value common stock to Corporate Regulatory
Services for consulting services valued at $26,250.
These share were issued pursuant to a Regulation D, Rule 504
offering registered in state of Nevada as addition compensation
pursuant to our agreement
We issued 1,340,000 shares of our $0.001 par value
common stock at $0.10 per share for cash of $134,000. The
shares were sold pursuant to a Regulation D, Rule 504 of
the Securities and Exchange Commission offering.
In March of 2001, We we issued 600,000 shares of our
$0.001 par value common stock to Quarg, Inc. for consulting
services valued at $60,000.
In October of 2001, we issued 150,000 shares of our
$0.001 par value common stock to Mary Lou Cox, mother of
Robert Cox, the Company's president, for consulting services
valued at $15,000. Ms. Cox provided general clerical and
administrative services to the company in lieu of salary or
hourly wage.
In October of 2001, we issued 500,000 shares of our
$0.001 par value common stock to James De Luca, an
independent consultant, for consulting services valued at
$50,000. Mr. De Luca helped the company put in place
policies and procedures for its IT recruitment business and
also provided the company's then Vice-President with a list
of IT candidates and contacts in lieu of a salary or hourly
wage.
On July 9, 2002, we 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.
In June, 2002, we issued 1,725,000 shares of our $0.001 par v
alue 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.
Should M&E Equities, LLC convert its Medicius Note into
reserved merger shares, those shares shall total a maximum
of eight million 8,000,000 shares, or a portion thereof, and
shall be valued a the time(s) of conversion.
On February 5, 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.
On March 28, 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 May 15, 2003, David Mizrahi settled his note, with a face
value of $20,000, plus interest from January 5, 2002 through May
14, 2003, a total of $22,475, to a conversion of 25 shares of
CareDecision Corporation common stock for each dollar of
investment, plus interest. David Mizrahi also, converted 60,000
Class "A" Warrants of Medicius, Inc., with a value of $14,619,
into CareDecision Corporation common stock on a 3:1 basis. The
Warrant converted into 180,000 shares of common stock of
CareDecision Corporation.
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.
Mr. Quintiliana has been retained by the company to provide
consulting to the areas of cooperative advertising and the
marketing of electronic commerce within the company's
ResidenceWare electronic networks,. Mr. Quintiliana will provide
his services to employees of the company upon request and on-site
with the company's cooperative advertising partners (hotel owners
and managers).
/16/
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.
Ms. Asbell's duties include general business consulting,
technical recruiting and identification of medical IT products
and technologies that the company may consider acquiring.
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.
Dr. Chillemi's duties include providing consultation and
advice to CareDecision Corporation in connection with any and all
matters relating to CareDecision Corporation's corporate
governance, medical advisory committee to the board, and
potential AMEX or NASDAQ-SC application, and as CareDecision
Corporation may reasonably request. Also Dr. Chillemi continues
to provide services where he will introduce potential strategic
partners to the Corporation.
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.
Dr. Wolf is a registered pharmacist and a pharmacology PhD.
Dr. Wolf will provide consulting in the area of medical
information technology, in particular the areas of drug
interactions, insurer drug formularies, and risk assessment
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.
Leslie-Michelle Abraham is an expert in the area of
physician practice management and physician practice workflow,
particularly as these areas interact within the work-injury
health sector. Ms. Abraham will assist the company with medical
IT consulting for its MD@Work product.
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.
Mr. Mandell was the agent that sold the company some IT
technology in January. This technology did not and has not
worked. In July 2003 the company rescinded this purchase of this
software techhnology, and settled the entire transaction. The
company retains a license free copy of the software and Mr.
Mandell has been retained to provide technical assistance as the
company attempts to make the software functional.
/17/
Plan of Distribution
The selling stockholders may, from time to time, sell any or
all of their shares of common stock on any stock exchange, market
or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices.
The selling stockholders may use any one or more of the following
methods when selling shares:
(a) Ordinary brokerage transactions and transactions in which
the broker-dealer solicits purchasers;
(b) Block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and the resell a as
principal to facilitate the transaction;
(c) Purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
(d) An exchange distribution in accordance with the rules of the
applicable exchange;
(e) Privately negotiated transactions;
(f) Short sales;
(g) Broker-dealers may agree with the selling stockholders to
sell a specified number of such shares at a stipulated price per
share;
(h) A combination of any such methods of sale; and
(i) Any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144
under the Securities Act, if available, rather than under this
prospectus.
The selling stockholders may also engage in short sales
against the box, puts and calls and other transactions in our
securities or derivatives of our securities and may sell or
deliver shares in connection with these trades.
Broker-dealers engaged by the selling stockholders may
arrange for other brokers-dealers to participate in sales.
Broker-dealers may receive commissions or discounts from the
selling stockholders (or, if any broker-dealer acts as agent for
the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these
commissions and discounts to exceed what is customary in the
types of transactions involved.
Any profits on the resale of shares of common stock by a
broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act.
Discounts, concessions, commissions and similar selling expenses,
if any, attributable to the sale of shares will be borne by a
selling stockholder. The selling stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in
transactions involving sales of the shares if liabilities are
imposed on that person under the Securities Act.
The selling stockholders may from time to time pledge or
grant a security interest in some or all of the shares of common
stock owned by them and, if they default in the performance of
their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of
the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this
prospectus.
/18/
The selling stockholders also may transfer the shares of
common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus and may
sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933 amending the list of selling stockholders
to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents
that are involved in selling the shares of common stock may be
deemed to be "underwriters" within the meaning of the Securities
Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
We are required to pay all fees and expenses incident to the
registration of the shares of common stock. We have agreed to
indemnify the selling stockholders against certain losses,
claims, damages and liabilities, including liabilities under the
Securities Act.
The selling stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of their
shares of common stock, nor is there an underwriter or
coordinating broker acting in connection with a proposed sale of
shares of common stock by any selling stockholder. If we are
notified by any selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of shares
of common stock, if required, we will file a supplement to this
prospectus. If the selling stockholders use this prospectus for
any sale of the shares of common stock, they will be subject to
the prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the
Securities Exchange Act of 1934 may apply to sales of our common
stock and activities of the selling stockholders.
[Balance of this page intentionally left blank.]
/19/
Legal Proceedings
The Company has pending one legal actions arising in the
normal course of business. Management does not believe that this
legal action will have a material impact on the Company's
business, financial condition or operating results.
M&E Equities, LLC ("M&E) and Blimie Mendlowitz (the
"plaintiffs") have 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 ("Warrants")
pursuant to the terms of a Senior Convertible Note Subscription
Agreement ("Note A") and a Senior Convertible Promissory Note
Agreement ("Note B") issued to the plaintiffs. The plaintiffs
are seeking a declaration by the court awarding them damages:
a) In an amount not less than the outstanding Note A principal
of $75,000, plus interest at twelve percent per annum and further
requiring CareDecision to issue to Mr. Mendlowitz 225,000
Warrants exercisable at $.20 per warrant with additional warrants
to be issued at the commencement of trading as per Note A;
b) In an amount not less than the outstanding Note B principal
of $400,000, plus interest at the default rate of fifteen percent
per annum as provided for in Note B;
c) In an amount not less than the outstanding Note A principal
of $75,000, plus interest at twelve percent per annum and further
requiring CareDecision to issue to Mr. Mendlowitz 225,000
Warrants exercisable at $.20 per warrant with additional warrants
to be issued at the commencement of trading as per Note A;
d) In an amount not less than the outstanding Note B principal
of $400,000, plus interest at the default rate of fifteen percent
per annum as provided for in Note B;
e) In an amount not less than $4,000,000 for defendants' fraud
in inducing Plaintiffs to invest in Medicius and depriving them
of an opportunity to realize the benefit of their investment,
plus treble damages for fraud;
f) For all reasonable attorney's fees incurred by Plaintiff's
in this action;
g) For the costs and disbursements of this action; and
h) For such other further relief which this Court seems just
and proper.
The Company denies all material allegations against the
Company and intends to fully defend the claims of the Plaintiffs.
This litigation is still in the summons and complaint phase and
the ultimate outcome cannot presently be determined.
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
All parties have subsequently executed a Settlement
Agreement. Certain parties to that agreement have to this date
not fully satisfied the terms of settlement. The M&E Secured
Convertible Revolving Promissory Note Agreement (previously filed
as exhibit 10.4) discloses the terms agreed upon; however; as for
the balance outstanding, the rate of interest, the maturity date
and the conversion terms, those are issues disputed in the
litigation. Both parties are alleging different facts that would
determine the balance outstanding, the rate of interest, the
maturity date and the conversion terms, so such disclosure would
not be prudent until after the case is resolved. The summons and
complaint were filed on January 9, 2003 and were served to the
Company on April 21, 2003. The Company believes that once fully
satisfied, the Settlement Agreement between the parties will end
the litigation.
/20/
Directors and Executive Officers
The following table sets forth the name, age, positions, and
offices or employments for the past three years as of June 30,
2003, for our executive officers and directors. Members of the
board are elected and serve for one year terms or until their
successors are elected and qualify. All of the officers serve at
the discretion of the Board of Directors of the Company.
NAME AGE POSITION
Robert Cox 43 President, Director, and Chief Executive Officer
Keith Berman 49 Secretary, Treasurer and Director
William Lyons 49 Director
Robert Jagunich 56 Director
Robert L. Cox, Chairman, President, Director, and Chief
Executive Officer - Prior to joining CareDecision, Mr. Cox was
the Chief Executive Officer, President and Director of Tower
Realty Trust, Inc., a publicly traded Real Estate Investment
Trust ("REIT"). Prior to holding the positions of CEO and
President of Tower Realty Trust, since 1995 Mr. Cox served as the Executive
Vice President and Chief Operating Officer of Tower Equities until
October of 1997, when Tower Equities became a public company
(Tower Realty Trust, Inc.). Prior to that, Mr. Cox served as
Vice President of Development and Construction of Tower Equities
from March 1987 to March 1995, where his main responsibilities
included supervising all of Tower Equities' development and
construction projects. Mr. Cox is a graduate of Florida State
University in 1983. Mr, Cox does not hold any directorships of
other reporting companies.
Keith Berman, Secretary, Treasurer and Director - Mr. Berman
has over 22 years experience in healthcare with such companies as
Technicon Corporation and Boehringer-Mannheim Corporation, and in
the last 15 years providing healthcare software including
Intranet and Internet systems. Mr. Berman was the founder of
Cymedix, the operating division of public Medix Resources, Inc.
(MXR) from January 1996 - June 1999. President, Director and founder
of Cymedix Corp., currently the operating division of Medix Resources, Inc.
(MXR). Cymedix was a pioneer company in what was then known as i-health
(Internet healthcare) and is now the e-health industry. From July of
1999 - present, Mr. Berman has deld the position of President, founder
and director of Caredecision.net, Inc. a private company engaged in
e-health technology development. Mr. Berman received a BA in 1975 and
an MBA in 1977, from Indiana University.
William Lyons, Director - Mr. Lyons, has over 20 years
experience in healthcare endeavors, and for the past fifteen
years has concentrated on medical communications and medical IT.
Mr. Lyons, former President of Cybear, Inc. (CYBA) and an
original member of the management team at AllScripts (MDRX),
manages the company's sales and marketing efforts.
From 1996 through March 1998 Mr. Lyons was the President Cybear, Inc.
a division of Andrx Corp. Cybear was a pioneer company in what was then
known as i-health (Internet healthcare) and is now the e-health industry.
Subsequently, from June 1998 - December 1999 he was a consultant to the
President and CEO of Medix Resources, Inc. Mr. Lyons was hired by Medix
just after Medix acquired Cymedix. His duties included advising the CEO in
areas of business development, sales, marketing and pharmaceutical company
relationships. In July of 2000, Mr. Lyons accepted the position of Executive
Vice President and Director of Caredecision.net, Inc., a private company
engaged in e-health technology development, and from Jun 2001 - present
Executive vice president and director Medicius, Inc. a private company
engaged in e-health technology, acquired by CareDecision Corp. June 2002.
Mr. Lyons received a BA in 1976, from St. Michael's College and an MBA in
1979, from Pace University
Robert Jagunich, Director - Mr. Jagunich was a director of
Cymedix Corporation, the operating entity of Medix Resources,
Inc. (AMEX:MXR), from April 1996 through December 1997. MR.
Jagunich has 27 years of experience in the medical systems and
device industry. Recently, he has held the position or President
at New Abilities Systems, a privately-held manufacture of
advanced electronic systems used in rehabilitation. He also
consults to companies such as Johnson and Johnson and has served
as a senior executive in such publicly-held companies as
Laserscope and Acuson. He received his B.S in 1969, and his M.S.
and M.B.A. in 1971, from the University of Michigan
/21/
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information
concerning the beneficial ownership of the Company's outstanding
classes of stock based on ownership information reported by the
stockholders as of June 30, 2003, and on the number of shares
outstanding as of June 30, 2003 by each person known by the
Company to own beneficially more than 5% of each class, by each
of the Company's directors and executive officers and by all
officers and directors as a group. Unless otherwise indicated
below, to the Company's knowledge, all persons listed below have
sole voting and investment power with respect to their shares of
common stock except to the extent that authority is shared by
spouses under applicable law. All shares are held directly.
Common Stock
Name and Address Shares Percentage of
Beneficially Owned Shares
Outstanding
Anfel Trading1 4,206,531 4.85%
505 Park Avenue
New York, NY 10022
Keith Berman2 6,383,325 7.37%
1623 Elmsford
Westlake, CA 91361
Robert L. Cox 1,123,861 1.29%
16 Wood Hollow Lane
Fort Salonga, NY 11768
Robert Jagunich 1,465,000 1.69%
765 Christine Drive
Palo Alto, CA 94303
William Lyons 2,792,224 3.22%
617 Joshhue Court
Naperville, IL 60540
----------------------------------------------------------------------
Total ownership by our 11,764,410 13.58%
officers and directors
(four individuals)
Footnotes
1. The principal executive officer of Anfel Trading is Jackie
Bronner.
2. Certificate number 1329 in the amount of 848,768 shares and
certificate number 1395 in the amount of 1,267,963 shares of the
Company's common stock were transferred to a non-related
individual on October 16, 2002; however, these certificates were
lost in transit and were not recovered until March 2003.
Therefore, Mr. Berman's holdings as reflected on the Company's
December 31, 2002 certified shareholder list is overstated by a
total of 2,116,731 shares.
/22/
Description of Securities
Our authorized capital stock is 200,000,000 shares of common
stock, par value $0.001 per share and 5,000,000 shares of
preferred Stock, par value $.001 per share. As of June 30,
2003, we had issued 86,606,012 of our shares of common stock and
no shares of preferred stock.
The following brief description of our common stock and
preferred stock is subject in all respects to Nevada law and to
the provisions of our Articles of Incorporation, as amended and
our Bylaws, copies of which have been filed as exhibits to our
initial 10-SB Registration Statement filed with the Securities
and Exchange Commission on September 27, 2001.
Common Stock
As a holder of our common stock:
(a) You have equal rights to dividends from funds legally
available, ratably, when as and if declared by our Board of
Directors;
(b) You are entitled to share, ratably, in all of our assets
available for distribution upon liquidation, dissolution, or
winding up of our business affairs;
(c) You do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions
applicable;
(d) You are entitled to 1 vote per share of common stock you
own, on all matters that stockholders may vote, and at all
meetings of shareholders; and
(e) Your shares are fully paid and non-assessable.
Additionally, there is no cumulative voting for the election
of directors.
Preferred Stock
We are also authorized to issue up to 5,000,000 shares of
preferred stock, $0.001 par value. Although, we have not issued
any preferred stock to date, nor have we developed the
descriptive attributes of these preferred shares, we can issue
shares of preferred stock in series with such preferences and
designations as our board of directors may determine. Our board
can, without shareholder approval, issue preferred stock with
voting, dividend, liquidation, and conversion rights. This could
dilute the voting strength of the holders of common stock and may
help our management impede a takeover or attempted change in
control.
Nevada Anti-Takeover Provisions
The anti-takeover provisions of Sections 78.411 through
78.445 of the Nevada Corporation Law apply to CareDecision
Corporation Section 78.438 of the Nevada law prohibits us from
merging with or selling CareDecision Corporation or more than 5%
of our assets or stock to any shareholder who owns or owned more
than 10% of any stock or any entity related to a 10% shareholder
for three years after the date on which the shareholder acquired
the CareDecision Corporation shares, unless the transaction is
approved by the Board of Directors of CareDecision Corporation.
The provisions also prohibit us from completing any of the
transactions described in the preceding sentence with a 10%
shareholder who has held the shares more than three years and its
related entities unless the transaction is approved by our Board
of Directors or a majority of our shares, other than shares owned
by that 10% shareholder or any related entity. These provisions
could delay, defer or prevent a change in control of CareDecision
Corporation.
/23/
Anti-Dilution
The shares of the CareDecision's preferred stock shall not
be subject to dilution unless all the holders of the preferred
stock vote to change this preference. In addition, the preferred
stock shall maintain its status even if the common stock
undertakes a reverse or forward split of its shares. The
preferred stock cannot be diluted unless it is converted to
common stock.
Market for Common Stock
The common stock is traded on the OTC Bulletin Board. The
following table sets forth the high and low bid prices of the
Company's common stock for the periods indicated, as reported by
published sources. The prices reflect inter-deal prices without
retail mark-up, mark-down or commission and may not represent
actual transactions.
Low High
2003 Fiscal Year
First Quarter $0.04 $ 0.080
Second Quarter $0.04 $ 0.075
Third Quarter (as of date of prospectus) $0.04 $ 0.075
2002 Fiscal Year
First Quarter $0.06 $ 0.30
Second Quarter $0.03 $ 0.08
Third Quarter $0.03 $ 0.11
Fourth Quarter $0.04 $ 0.11
2001 Fiscal Year (a)
(a) The Company was incorporated in 2001, and our securities were
not approved for trading until February 1, 2002. Therefore,
information for fiscal year 2001 is not presented.
As of August 28, 2003, there were approximately 88
individuals of record of our common stock. Our shares of common
stock are currently traded on the OTC Electronic Bulletin Board
under the symbol "CDED". There is no assurance that an active
trading market will develop that will provide liquidity for
CareDecision's existing shareholders or for the selling
shareholders whose common stock is being registered through this
filing.
The Commission has adopted regulations which generally
define a "penny stock" to be any equity security that has a
market price less than $5.00 per share. Thus, our common stock
is presently a penny stock subject to rules that impose
additional sales practice requirements on broker-dealers who sell
such securities to persons other than established customers and
accredited investors. This would generally include institutions
with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. Based on the above,
investors who are not established customers of broker-dealers or
accredited investors may find it difficult to purchase our common
stock without satisfying numerous requirements.
[Balance of this page intentionally left blank.]
/24/
Commission's Position on Indemnification for Securities Act
Liabilities
Section 78.751 of the Nevada General Corporation Laws
provides as follows: 78.751 Indemnification of officers,
directors, employees and agents; advance of expenses.
1. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses, including attorney's fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with the action, suitor proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
does not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation,
and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit
if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that
the court in which the action or suit was brought or other court
of competent jurisdiction determines upon application that in
view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for such expenses as the
court deems proper.
3. To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless
ordered by a court or advanced pursuant to subsection 5, must be
made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made: (a) By the stockholders: (b) By the
board of directors by majority vote of a quorum consisting o
directors who were not parties to act, suit or proceeding; (c) If
a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion; or (d) If a quorum consisting
of directors who were not parties to the act, suit or proceeding
cannot to obtained, by independent legal counsel in a written
opinion; or
5. The Articles of Incorporation, the Bylaws or an
agreement made by the corporation may provide that the expenses
of officers and directors incurred in defending a civil or
criminal, suit or proceeding must be paid by the corporation as
they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or
on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that
he is not entitled to be indemnified by corporation. The
provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than
the directors or officers may be entitled under any contract or
otherwise by law.
/25/
6. The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to this section: (a)
Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either
an action in his official capacity or an action in another
capacity while holding his office, except that indemnification,
unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be
made to or on behalf of any director or officer if a final
adjudication establishes that his act or omissions involved
intentional misconduct, fraud or a knowing violation of the law
and was material to the cause of action. (b) Continues for a
person who has ceased to be a director, officer, employee or
agent and endures to the benefit of the heirs, executors and
administrators of such a person. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Insofar as indemnification for liabilities under the
Securities Act of 1933 may be permitted to our directors,
officers, and controlling persons, we have been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and therefore unenforceable.
Description of Business
Organization and Business
The Company was formed in the State of Nevada on March 2,
2001. In June of 2001, we elected to change the corporate name
from ATR Search to CareDecision Corporation. Pursuant to
reorganization in 2002, we authorized the issuance of 3,419,500
shares valued at $229,899, for all the assets and liabilities of
Care Technologies, LLC, becoming the parent of Care Technologies,
LLC. Care Technologies, LLC was dissolved in April 2003.
Pursuant to a Merger in June of 2002, we acquired Medicius, Inc.
at a following conversion rates: (i) one common share of Medicius
in exchange for three common shares of CareDecision, (ii) one
Series A Preferred share of Medicius in exchange for three and
one-half common shares of CareDecision. The Company is a
developmental stage company whose principal business objective to
provide information technology (IT) for use with Internet-based
communication, and network software systems and applications that
reside on and function through a Windows CE-Based PDA. We have a
website at http://www.caredecision.net., which provides a
description of our services and products.
The Company's management ("Management") believes that there
are substantial growth opportunities in the Internet based
communication software and application industry, specifically
hand held products such as Person Digital Assistant (PDA)
devices. Management believes that the Company is well positioned
to take advantage of the growth opportunities in the marketplace.
Management believes that Company is building an excellent
reputation with potential clients in the marketplace as a result of
its ability to provide quality products and services, on-time delivery, at
competitive prices. In recent years, Internet-based
communication has become very popular. PDA are available from
most major computer brands such as Sony, IBM and Palm. To
maximize its potential, the Company has,
significantly expanded its focus to include not only medical
applications, but applications in the real estate market.
We had a major shift in our business strategy in 2003. It was not
until the last quarter of 2002 that we focused on the integration and
marketing of our systems and applications to non-medical industries,
particularly hotels, motels and real estate management company' properties.
In this regard, we have established only informal agreements and have not
generated revenue from this, or any other, business sector
/26/
As we are still in the development stage, CareDecision has
yet to generate revenue other than through the selling of our
shares. However, pursuant to an Agency Agreement with
CareDecision.net, Inc., CareDecision will receive 90% of the
total revenue, which CareDecision.net, Inc. is to receive through
a Program Agreement with Pharmacare, Inc., a wholly owned
subsidiary of CVS Corporation, a leading provider of pharmacy
benefit services to health insurers. Pharmacare and the Company
plan to jointly market the CareDecision products. Thus far the
two companies have embarked upon a program to jointly introduce
the benefits of CareDecision.net's products to several east coast
based health plans that insure over five million lives. The
material terms of the Agency Agreement are as follows:
The parties to the Program Agreement are: CareDecision.net,
Inc. (the "Company"), Pharmacare, Inc. a division of CVS, Inc. (a
partner of CareDecision.net, Inc. through the Program Agreement)
("Pharmacare"), and CareDecision Corporation, the agent for
CareDecision.net, Inc.
Pharmacare is a pharmacy benefit management organization.
Pharmacare's main business is the management of the drug
prescription benefits of individual insured parties, acting under
contract for various health and indemnity insurance companies.
Pharmacare is limited to retrospectively managing the
prescription benefits of individual insured parties, acting after
a mistake or other problem has occurred in the insurance system.
Prescription management is also a medical IT service CareDecision
offers through its MD@Hand and MD@Rx products. If the "MD@"
product is used by physicians, the company believes that
prescription drug management will improve and be less costly.
The Program Agreement between Pharmacare and
CareDecision.net, Inc., ("CD.net") with CareDecision Corp. acting
as CD.net's implementation agent, obligates Pharmacare to
identify those of its customers would be interested in the
MD@Hand and MD@Rx products. Once identified Pharmacare is to
introduce the MD@Hand and MD@Rx products and CareDecision
personnel to the interested parties. CareDecision Corp. as agent
has the responsibility of turning the interest into commerce
through the introduction and implementation of its products.
The Program Agreement also makes Pharmacare a junior partner
in any commerce that emerges from the efforts of Pharmacare and
CareDecision, although should any commerce emerge, Pharmacare
would benefit twice: from the benefit of the commerce that has
emerged, and from the cost savings it enjoys from the
introduction of CareDecision products.
Patents or Trademarks
The company has acquired the intellectual properties or
property rights to proprietary systems that are covered by a
portfolio of pending utility patent applications (the 2001
patents pending) covering methods and systems for managing
patient-specific information and concurrently implementing
fulfillment by multiple health-services related providers for
medically-related services for use over a computer network.
Patient information gathered from multiple authorized sources is
provided at the point-of-care, and coordinated and compared with
prescription formulary compliance, medical services providers and
their payors, and multiple-rules based treatment plans. Patient
case and episode information and care management, in coordination
with the implementation of substantially paperless ordering and
fulfillment of lab tests, prescriptions and referrals, is made
available to all attending health care professionals and support
personnel via the networked computer and PDA system.
The inventive system includes, in seamless essentially real-
time communication over the Internet, a network of fully secure
private sub-networks among the participants in the system,
anchored by a PC as the client-server link to the Internet, with
each of a plurality of PDAs docked to it, either in a wired or
wireless mode (the 2002 patents pending). A suite of software
applications, including medical, communications, data migration
(mining) and database applications are resident on each PDA, and
communications, database and data migration (mining) modules
resident in the system automatically link to the PC via an
available ISP to update those databases by a novel packet
transmission method to maintain confidentiality of the
transmitted information. Data is transferred by wireless link,
such as Wi-Fi and other radio frequency links among and between
servers and PDA's used in connection with the inventive system.
Certain system enhancements are included as well, including
wireless link for point to points advertising and fulfillment,
point-of sale (residential product) and wireless wide area
networking.
/27/
In addition the company has acquired certain trade and/or
salesmarks or rights to it and has received provisional approval
for the family of marks "MD@". In addition the company is
awaiting approval of various applications for trademark
registration, including MD@HAND for its PDA based management
software, and MD@PRACTICE PROBE for its data migration (mining
utility), as well as other related marks that are related to
products not yet commercial.
The Company is continuously reviewing additional licensing
programs and proprietary designs to further expand its licensing
program and proprietary PDA software applications.
Operations
The Company is a development state company and, to date, no
products have been sold nor services provided to generate
revenue. We have generated cash-flow solely through the selling
of our securities. Recently, we have entered into an Agency
Agreement with PCHertz.com, Inc. of Fargo, ND ("PCHertz").
PCHertz will act as a sales and distribution organization for the
company's ResidenceWare products geared to the hotel, motel and
apartment building markets. To date, PCHertz has secured orders
for systems from hotels and motels in the states of California,
Minnesota, North Dakota, Virginia and Georgia. Initial deliveries
of the Company's ResidenceWare system, called for under these
orders, are for approximately eight-hundred fifty units with
potential for many additional units from hotel owners and
managers associated with the initial orders group. Additional
unit orders are dependent upon the success of the initial unit
deliveries. To date the company has not delivered any
ResidenceWare systems.
Medical Field Applications
Our medical information and communication applications
include important features such as, fully integratable, and all
on one PDA Internet appliance. These applications have been
designed to meet the needs of both the inpatient and outpatient
environments and are not just commercially viable but also
regulatory standard compliant. Further, we believe that
CareDecision has conceived and implemented the ability to monitor
patient treatment plans on a handheld information appliance.
The technology is grounded in the central need to furnish
the doctor with the crucial patient information rapidly and
reliably on a PDA. It utilizes the power of the Web 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 the first to offer legacy system applications on a
totally portable (PDA) appliance.
The PDA software operates on any Microsoft Windows CE
"Pocket PC" based handheld device, either in a wireless or
"wired" mode. The local host for the company's 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 the medical network.
The PDA software allows each PDA to become a uniquely
identified mobile node on the medical network, independent of PC
linkage, thereby, assisting the doctor in the review of relevant
patient medical history, 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 patients, which represents
approximately 3 years of patient encounters in a typical primary
care medical practice and allows for providers to access payor
and health plan business rules, and policy/plan coverage's
directly from the plan(s).
The Web server software establishes a real-time link to
health plans, lab and other service organizations legacy systems.
/28/
Our system allows for providers to access payor and health
plan business rules, and policy/plan coverage's directly from the
plan(s).
The PDA bearing proprietary software enables the physician
at the point-of-care to:
Review the patient's recent and/or long term medical
history;
Check the patient's eligibility to receive services from a
health plan;
Request care review of medical protocols and medical step
processes, to assure a minimum standard of care according to each
patient's diagnoses and health plan;
Electronically order laboratory tests or radiology exams,
and review the fulfillment of those orders by electronic receipt
of the medical test results;
Review the safety of a proposed prescription and its
propensity to interact with other prescribed medications for a
given patient. Identify the optimum medication contained within
the patient's benefit plan formulary;
Electronically refer the patient to a medical specialist,
and retrieve and review any report(s) sent from the specialist
related to the referral; and
Initiate care protocols, or step therapies, based on the
patient's diagnosis, and automatically follow the progress or
efficacy of the "steps" through an auto-reminder.
The PDA technology and applications are a tightly designed
integration of application sets. The system captures all current
patient activity at the point of care (the examining room or
bedside) and then merges it with the patient's history allowing
various on-demand treatment protocols to emerge, providing a
wealth of data for prospective treatment. Information supplied
to and from the physician via the PDA appliance includes:
Case/Episode Diagnosis Episode by episode multiple
diagnosis and physician chosen
treatment;
Patient cumulative treatment
(electronic medical record)
histories, including
hospitalizations and histories
from patient; and
Eight levels best care
medical protocols.
Medical Order Entry and Full Pharmacy Benefits
Fulfillment Management programs with
electronic script writing with
drug formulary and drug-drug
interaction checks;
Lab Order Entry with complete
reporting including results,
pending, tickler, out of limits,
historical, summary, etc.; and
Accident/Worker's
Compensation intervention modules.
In addition, CareDecision software
applications provide both on-line
and off-line (fax) order entry.
Payor-Related Plan and Procedure
Applications Eligibility;
Procedure/Drug Authorization;
Patient Referral; and
Hospitalization Admission
Decision Tree.
The communication and integration system coupled with its
clinical and administrative applications constructs a compelling
and convincing rationale for adoption and utilization by the
physician within the office practice.
Connecting Through Integration
The PDA based applications provide a complete set of
clinical applications for managing patient care, streamlining
clinical paperwork, providing the physician with Best Medical
Care pathways and guidelines, and increasing efficiency while
improving the accuracy of tracking patient care.
/29/
There are three categories of application modules.
Case/Episode Diagnosis and Treatment modules include: (a)
episode by episode multiple diagnosis and physician chosen
treatment pathways; (b) patient cumulative treatment (electronic
medical record) histories, including hospitalizations and
histories from patient encounters with other physicians; (c)
eight levels of Best Care Medical Protocols, and (d) tentacle
links to the Physician Desktop Reference (PDR) and prescription
drug databases;
Medical (outbound) Order Entry modules include: (a) full
Pharmacy Benefits Management programs with electronic script,
drug formulary and drug interaction modules; (b) Lab Order Entry
with complete reporting: results, pending, tickler, out of
limits, historical, summary, etc., and (c) Accident/Worker's
Compensation intervention modules. Additionally, CareDecision
software applications provide both on-line and off-line (fax)
order entry; and
Payor related applications modules include: (a) Plan and
Procedure Eligibility; (b) Procedure/Drug Authorization; (c)
Patient Referral, and (d) Hospitalization Admission Decision
Tree.
The costs of installing and maintaining the components of
the network in physician offices will be borne by the health plan
"sponsors" that the company has labeled, E-trading partners. The
system presents a visible and definable cost savings to the
sponsoring health plan through a transaction fee structure that
offers advance cost savings benefits. The added indirect
management capabilities offered the sponsor make the adoption of
CareDecision's point of care concept unique in the industry.
The following table describes the types of fees that we will
charge and the payor of such fees.
Fee Category Specific Transaction Payor of Fee
---------------- ---------------------- -------------
Insurance a. Patient Eligibility Clerk Specific Insurer
b. Procedure Eligibility Clerk
c. Patient Referral
d. Procedure/Drug Authorization
Laboratory a. Laboratory Tests and Results Specific Laboratory
b. Historical Patient Lab Profile
c. Lab Supplies
d. Lab Supplies Order
e. Laboratory Super Bill
Pharmacy Benefit a. Drug Formulary Check Insurer or Insurer's PBM
b. Best Care Drug Guidelines
c. Drug Interaction Check
d. Electronic Prescription
Hospital a. Hospital Pre- Admission Checklist Specific Hospital
b. Discharge Report
c. Remote Physician Inquiry to EMR
d. Patient Insurance Profile
/30/
We anticipate that health plans and service providers, such
as clinical laboratories, will subsidize (sponsor) the physician
networks. As this is not assured, our costs will be paid, by
selling our PDA's through other avenues. We have a business
model to sell our PDA units through distribution outlets. We
will focus on sales of PDA units either directly or through
distributors to physician management organizations, hospitals and
hospital management organizations. We have brought in one
distributor in California to test the feasibility of our business
model.
We can launch our integrated system by having one or more of
the following organizations participate: a) hospital, b) an
insurer and or c) a laboratory, etc. Once one of the
organizations participates we will introduce our service to its
physician clients. Sell as sponsor either to a hospital,
insurer, and laboratory sold. We will use intensive marketing
and sales techniques to have one or more of the above stated
organizations participate. This will be the most time consuming
process. Once an organization agrees to participate then we will
begin the process of transferring the relevant based information
from paper format to electronic format. The Company estimates
the process to take up to 18 months.
Real Estate and Hotel/Motel Applications
Earlier this year the Company introduced a new addition to
its technology products with the release of RESIDENTWARE(TM), a
collection of Internet-enhanced communication, integration, and
networking software systems and applications that reside on and
function through a Windows CE-based PDA.
RESIDENTWARE(TM) has been proprietarily and internally
developed in cooperation with prominent commercial and
residential real estate management companies, and hotel owners
who defined for the company a need for a communication tool that
could capitalize on recent technological advances to facilitate
the relay of vital information directly and instantaneously to
occupying tenants/guests. The systems were further augmented
recently with the addition of advertising and e-commerce
transactional features allowing merchants and service providers
local to a ResidenceWare installation to electronically advertise
and accept electronic orders for their products and services. The
Company will employ a cooperative advertising model where it will
share advertising revenue and electronic commerce revenue
generated with the hotel/apartment building owner or manager.
Although the Company believes that the cooperative revenue
sharing model is viable, it has not as yet shipped its
ResidenceWare units and has to date not collected any revenue.
In July 2003 the Company formalized an informal agreement
with PCHertz.com, Inc. of Fargo, ND for the installation and
sales of its ResidenceWare units. To date, PCHertz.com, Inc. has
received orders for approximately 850 units of the company's
ResidenceWare product from hotels and motels in the states of
California, Minnesota, North Dakota, Virginia and Georgia. At the
present time the company and PCHertz.com, Inc. are in the process
of initiating cooperative advertising and e-commerce arrangements
with merchants local to those hotels that have placed orders for
the company's ResidenceWare product. The hotel owners who have
placed orders through PCHertz.com have also placed additional
orders for many more ResidenceWare systems conditioned upon the
successful implementation of their initial orders.
SateLink
SateLink is a new palm computer based product system
designed to facilitate wireless process control, calibration, key
coding and communications within the cable and media industries.
SateLink resolves electronic communication barriers that inhibit
customer communications and service and furnishes previously
unattainable controls over the delivery of their products.
SateLink is the most recent addition to our innovative
family of technology products. The product is a collection of
communication, integration, and networking software systems that
reside on a Windows CE-based PDA that communicates via Wi-Fi
wired or satellite network connections. SateLink will capitalize
on recent innovations with PDA-sized GPS receivers to consolidate
one or multiple GPS channels into a WiFi network to empower real-
time satellite communications between a sponsoring corporation
and virtual PDAs.
/31/
The development and introduction of SateLink launches
CareDecision into a previously unexplored industry for our
Company. Its creation, however, is wholly consistent with our
corporate mission of introducing innovative technologies that
resolve electronic communication barriers within multiple and
diverse markets. The notoriety surrounding the release of
ResidentWare and its subsequent embrace, fostered the Company's
transition to the dynamic media and cable industry. The creation
of SateLink was sparked by a specific request from a dominant
industry participant seeking a technological resolution to a
particular communication barrier that has hampered a systematic
introduction of their product. We responded to with SateLink.
Competition
The medical industry is highly competitive in the attraction
and retention of physician customers, insurers and other medical
providers. The number of competing companies and the size of
such companies varies in different geographic areas. Generally,
CareDecision is in competition with other PDA technology
companies that offer medically related software suites, with the
most effective competition coming from companies that possess
greater capital resources, have longer operating histories,
larger customer bases, greater name recognition and significantly
greater financial, marketing and other resources than do we.
There are a number of small and large companies that have
announced their intentions to provide some type of Internet
interconnectivity for physicians to the healthcare systems:
Large publicly traded companies: WebMD formerly known as
Healtheon (HLTH), the former MedicaLogic/Medscape (HLTH) and to a
slightly lesser degree Cerner/Citation (CERN), IDX Corporation
(IDXC) and venerable Shared Medical (acquired by Seimens) are
very broadly involved in healthcare Internet based services
including consumer services, E-commerce and connectivity. Of
these companies only Cerner is working on a PDA based interface
for physicians, although Healtheon has identified the PDA as a
critical component for a network and is "evaluating potential
partners to provide physicians with hand-held computers after an
in-house product was de-emphasized after beta testing."
Non-PDA based start-ups and small publicly traded companies:
CyBear (merged last year into parent Andrx), Medix Resources
(MXR), Advanced Health (merged into Proxymed) and Abaton.com
(merged into HBO-McKesson and then shut down) have or had
announced some form of connectivity systems that are non-PDA
based and have, at best, limited numbers of clinical
installations.
More mature companies such as Kinetra (acquired by HLTH),
McKesson-HBOC and ProxyMed (PILL), have launched Internet
enhanced ventures without any clinical successes.
PDA-based start-ups: PatientKeeper Corp. (formerly Virtmed),
ePhysician (recently downsized and sold assets) and iScribe
(recently reorganized and then merged) have announced products
that reside on 3-Com's Palm PC. The PatientKeeper product will
allow physicians to capture billing information for hospital-
based accounts and purports to manage receivable transactions (a
mix of a 1st generation feature on a 3rd generation technology).
ePhysician's product offering allows prescription ordering from a
PDA. On the surface, the former iScribe system offers a few of
the features of CareDecision's system, but has chosen to
implement a wireless wide-area network solution through an
Internet link to a legacy system server. This approach has
greater capital cost and platform data management disadvantages
compared to CareDecision's product line. Yet, iScribe, even with
its costly and incremental approach, and its history of financial
troubles nonetheless garnered an impressive valuation.
All of the embryonic PDA technology based companies have a
similar broad goal to deliver PDA based data management to
physicians. One company, AllScripts (MDRX) appears to be
positioned to advance to a market leadership position. However,
this position is defined by a product distribution of less than
2000 physicians' office sites (1% of the total market) and does
not possess a major factor in any medical trade area.
/32/
Increased competition may result in reduced operating
margins and a loss in our clientele base. There can be no
assurance that we will be able to compete successfully against
current and future competitors, and competitive pressures faced
by us may have a material adverse effect on our business,
prospects, financial condition and results of operations.
Further, as a strategic response to changes in the competitive
environment, management may from time to time make certain
pricing, service or marketing decisions or acquisitions that
could have a material adverse effect on our business, prospects,
financial condition and results of operations.
Based on management's industry experience, CareDecision
believes it will build a strong reputation for the quality of our
products and services as well as our client-oriented approach.
We believe that our experienced employees, broad range of
products and services, local and broad market expertise, and
operating infrastructure enable us to compete effectively in each
of our business disciplines. (See "Risk Factors - Competition").
Industry
The overwhelming majority of clinical information is
currently trapped in proprietary Active Server Pages (paper,
mainframes, and physician practice management systems). The
trend is moving towards taking all the information and
transferring it into electronic format for easy access. The
extraction and sharing of that information is a time consuming
and costly process. Each industry segment recognizes and
embraces the efficiencies and cost reductions that can be
realized through the electronic exchange of data. A number of
technologies, even those employing the Internet as a backbone,
have failed to achieve the expected information transformation.
In almost all instances the communication of electronic data
within the paradigm has the universal support of the payors and
industry service providers (pharmacies, labs, etc.).
The movement of combining the information stored in the
Active Server Pages and transferring it to electronic format will
benefit our short-term and long-term liquidity, our net sales and
revenues, and our income from continuing operations. Our short-
term liquidity will increase with the initial sales of our
product. Our long-term liquidity will also increase from the
ongoing fees connected with our service, which in turn will
increase our income from continuing operations.
Over the last decade managed care has transformed healthcare
into a highly competitive and market driven industry. The
transition has resulted in the elimination of many of the
unnecessary costs that had historically contributed to the
continued and unabated acceleration of the cost of health care.
One crucial segment, which has remained resistant to ongoing
efforts to realize real and obvious opportunities to affect cost
reductions, lies in the means of communications resident within
the industry.
The nature of domestic healthcare delivery has resulted in a
highly fragmented system involving hundreds of thousands of payor
and provider organizations scattered across a broad geographical
landscape. Each of these locations employs diverse and
incompatible information systems that have restricted electronic
communication of vital medical and administrative information
between the participants.
The overwhelming majority of clinical information is
currently trapped in proprietary Active Server Pages (paper,
mainframes, and physician practice management systems). The
extraction and sharing of that information is a time consuming
and costly process.
Additionally, healthcare mainly relies on paper
communication processes. We estimate that current healthcare
administration costs exceed $300 billion annually. It is
management's belief that online process automation and
transaction processing solutions can eliminate over 50% of those
costs, which are directly attributable to the time and expense
associated with manual processing for routine processes and
transactions.
Although the growth of Internet access and utilization has
clearly become the basis for accelerating the digital integration
of healthcare, progress remains limited with full, broad user
based deployment. A number of technologies, even those employing
the Internet as a backbone, have failed to achieve the expected
information transformation. In almost all instances the
communication of electronic data within the paradigm has the
universal support of the payors and industry service providers
(pharmacies, labs, etc.). Each industry segment recognizes and
embraces the efficiencies and cost reductions that can be
realized through the electronic exchange of data.
/33/
Employees
As of June 30, 2003 CareDecision currently has 2 part time
and 8 full staff employees. Management does not foresee hiring
additional employees for at least the next twelve to twenty-four
months, or until we generate sufficient revenues, in management's
opinion, to support hiring additional staff. No employees are
covered by labor agreements or contracts and management believes
our relations with our employees are good.
Acquisitions and name change
On June 17, 2002 ATR change its name to CareDecision
Corporation ("CareDecision"), increased the number of authorized
common shares to 200,000,000. On June 21, 2001, the Company
entered into an agreement with Care Technologies, LLC whereby the
Care Technologies, Inc. sold all of its assets and liabilities of
the Company in exchange for a 10% ownership of CareDecision
Corporation. The investment was recorded at $229,899, being the
fair value of the Company's assets on the acquisition date.
Pursuant to an Merger Agreement (the "Merger"). Effective
June 28, 2002 the Company consummated a merger and acquired
Medicius, Inc. pursuant to an Agreement and Plan of Merger. The
capital stock of Medicius issued and outstanding immediately
prior to the Effective Date was converted into CareDecision
Corporation Common Stock 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 The Exchange Agreement and the Agreement and Plan of Merger
are incorporated into this report by reference.
Research and Development Expenditures
From inception to current the Company's R & D regading software is $132,950
Government Regulation
Federal, state, local and foreign governmental organizations
may propose or institute laws or regulations concerning various
aspects of the medical industry, including electronic claims
processing, electronic prescriptions and privacy matters.
CareDecision is not currently subject to direct regulation by any
domestic or foreign governmental agency, other than regulations
applicable to businesses generally, and laws or regulations
directly applicable to the medical industry. However, due to the
increasing popularity and use of the Internet and other online
services, it is possible that a number of laws and regulations
may be adopted with respect to the Internet or other online
services covering issues such as user privacy, pricing, content,
copyrights, distribution and characteristics and quality of
products and services.
Furthermore, the growth and development of the market for
online commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those
companies conducting business online. The adoption of any
additional laws or regulations may decrease the demand for our
products and services and increase our cost of doing business, or
otherwise have an adverse effect on our business, prospects,
financial condition and results of operations.
/34/
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for period ended June 30, 2003.
The financial statements for the three months ended June 30, 2003
have been prepared on a going concern basis. The
issuance of a going concern opinion by the auditors indicates
that the auditors have substantial doubt about CareDecision's
ability to continue as a going concern. CareDecision incurred
net losses of $377,979 for three months ended June
30, 2003. This indicates that CareDecision's continuation, as a
going concern is dependent upon our ability to obtain adequate
financing. If CareDecision were unable to obtain adequate
financing necessary to continue our operations, advance our plan
of operations, increase our sales, increase our inventory and
working capital, we would be substantially limited. If
CareDecision were unable to properly fund our plan of operations,
our continuation would be jeopardized. Management's plan to
overcome our financial difficulties consists of raising
additional capital and obtaining revenues from the acquired
assets of Medicius, Inc. At this point, CareDecision has no
definite plans to raise money.
The participation necessary to launch our integrated system
will be accomplished through the costs of sale and marketing that
are estimated to be 60% of revenue.
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)
Statement of operations
data:
Total 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
--------- -------- -------- --------- -------------
Other income (expenses) (11,981) - (22,804) (8,251) (45,624)
--------- -------- -------- --------- -------------
Net (loss) $(377,979)$(293,720)$(833,100)$(599,917) $ (2,928,220)
========= ======== ======== ========= =============
Net (loss) per share -
basic and fully
diluted $ (0.00) $ (0.01) $ (0.01) $ (0.06)
========== ========== ========== ==========
/35/
Net Income (Loss)
We had net losses of $377,979 for the three months ending
June 30, 2003. This loss was due in large part to the merger
completed with Medicius, Inc. in June of 2002.
Internal and External Sources of Liquidity
We believe our cash on hand of $11,913 will be sufficient to
fund ongoing fiscal 2003 and 2004 operations and provide for our
working capital needs. 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.
Description of Property
The Company's headquarters and facilities have been re-
located to California. The company leases approximately 2300 sq.
feet, located at 2660 Townsgate Road, Suite 300, Westlake
Village, CA. As of August 1, 2003, there are 9 months remaining
on that lease at $3,750.00 per month. If additional facilities
are needed, management believes that suitable expansion space is
available to meet our future needs at commercially reasonable
terms. Currently, management believes that our office provides
sufficient workspace to commence with initial operations.
Certain Relationships And Related Transactions
Mr. Berman was a shareholder of Medicius and its President.
At the time of the merger Mr. Berman was offered continued
employment, but not an employment contract. Subsequently Mr.
Berman was elected an officer and director of CareDecision.
There has been one actual or proposed transaction that
occurred over the past two years to which any person related to
the issuer had or is to have a direct or indirect material
interest as set forth in item 404 of Regulation S-B of the
Securities and Exchange Act of 1933.
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 $0.001 par value common stock. The two indirect
beneficial owners are Keith Berman and William Lyons.
Mr. Cox was the promoter for CareDecision Corporation,
previously known as ATR Search Corporation. A promoter
is someone who, before a company is incorporated tries to
promote it through making business contacts, entering into
agreements for value to the company or simply giving his own
services to the company. Mr. Cox did not enter into any agreements
on behalf of the Company before its incorporation. Mr. Cox's service
as a promoter wsas that he paid for the incorporation fees.
[Balance of this page intentionally left blank.]
/36/
Compensation Table
The table below sets forth information concerning compensation
for the named executive officer of the Company for the periods
indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation Awards Payouts
------------------- ------ -------
Other
Annual Restr- Long-Term All
Name & Compen- icted Securities Incentive Other
Principal Salary Bonus sation Stock Underlying Plan Compen-
Position Year ($) ($) ($) Award(s) Options (#) Payouts ($) sation($)
------------------------------------------------------------------------------
Robert 2003 0 0 750,000 750,000 0 0
Cox, 2002 30,000 0 0 0 0 0 0
President 2001 100,000 0 0 0 0 0 0
Keith 2003 0 0 625,000 625,000 0 0
Berman, 2002 16,820 0 0 0 0 0 0
Secretary 2001 0 0 0 0 0 0 0
Treasurer
William 2003 0 0 625,000 625,000 0 0
Lyons, 2002 71,872 0 0 0 0 0 0
Director 2001 0 0 0 0 0 0 0
Directors' compensation:
As compensation for their services as members of the board
of directors, the Company in 2003 issued to each independent
board member stock options to purchase 20,000 shares of common
stock at an exercise price of $.025 per share. These options are
exercisable in full commencing December 19, 2003, and expire
December 19, 2008. The outside directors are also paid a fee of
$2,500 per quarter or $10,000 per year. The board members who are
executives of the Company received no additional compensation in excess
of their management remuneration.
[Balance of this page intentionally left blank.]
/37/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 39
Independent Accountant's Review Report 40
Consolidated Balance Sheet June 30, 2003 (unaudited) 41
Consolidated Statements of Operations For the Three and Six 42
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 43
Ended June 30, 2003 and 2002 (unaudited) and For the Period
July 6, 2000 (Inception) to June 30, 2003 (unaudited)
Notes to Financial Statements 44
/38/
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)
/39/
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
/40/
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.
/41/
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
--------- -------- -------- ---
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
--------- -------- -------- --------- -------------
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.
/42/
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.
/43/
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.
/44/
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.
/45/
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.
/46/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 47
CONSOLIDATED BALANCE SHEET 48
CONSOLIDATED STATEMENTS OF OPERATIONS 49
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 50
CONSOLIDATED STATEMENTS OF CASH FLOWS 51
NOTES TO FINANCIAL STATEMENTS 50
/46/
Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540(fax)
INDEPENDENT AUDITORS' REPORT
Board of Directors
CareDecision Corporation (formerly ATR Search Corporation)
We have audited the Balance Sheets of CareDecision Corporation
(formerly ATR Search Corporation) (the "Company") (A Development
Stage Company), as of December 31, 2002 and 2001, and the related
Statements of Operations, Stockholders' Equity, and Cash Flows
for the period June 21, 2001 (Date of Inception) to December 31,
2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statement presentation. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of CareDecision Corporation (formerly ATR Search Corporation) (A
Development Stage Company), as of December 31, 2002 and 2001, and
the results of its operations and cash flows for the years then
ended and for the period June 21, 2001 (Date of Inception) to
December 31, 2002, 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 have not commenced planned principal operations.
This raises substantial doubt about its ability to continue as a
going concern. Management's plan 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.
/s/ Beckstead and Watts, LLP
April 4, 2003
/47/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Balance Sheet
December 31,
Assets 2002
------------
Current assets:
Cash and equivalents $ 111,101
Loan to shareholder 9,576
Notes receivable 5,376
------------
Total current assets 126,053
------------
Fixed assets, net 219,508
Intellectual property, net 1,199,865
------------
$ 1,545,426
============
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 496,105
------------
Total current liabilities 496,105
------------
Stockholders' Equity
Common stock, $0.001 par value, 200,000,000 shares
authorized, 75,364,137 shares issued and outstanding 75,364
Additional paid-in capital 3,045,839
Treasury stock (96,750)
(Deficit) accumulated during development stage (1,975,132)
------------
1,049,321
------------
$ 1,545,426
============
The accompanying notes are an integral part of these financial statements.
/48/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Operations
For the year ended June 21, 2001
December 31, (inception) to
---------------------- December 31,
2002 2001 2002
---------- ---------- -------------
Revenue $ 2,000 $ - $ 2,000
---------- ---------- -------------
Expenses:
General & administrative expenses 77,712 4,974 82,686
Payroll expense 186,819 - 186,819
Professional fees 171,852 - 171,852
Consulting expense 1,319,482 - 1,319,482
Software development 129,000 - 129,000
Depreciation 40,778 - 40,778
---------- ---------- -------------
Total expenses 1,925,643 4,974 1,930,617
---------- ---------- -------------
Net operating (loss) (1,923,643) (4,974) (1,928,617)
Other income (expense):
(Loss) on debt settlement (25,925) - (25,925)
Interest income 2,230 - 2,230
Interest (expenses) (22,820) - (22,820)
---------- ---------- -------------
Net (loss) $(1,970,158) $ (4,974) $ (1,975,132)
========== ========== =============
Weighted average number of common
shares outstanding - basic and 43,176,595 19,180,000
fully diluted ========== ==========
Net (loss) per share - $ (0.05) $ (0.00)
basic and fully diluted ========== ==========
The accompanying notes are an integral part of these financial statements.
/49/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statement of Changes in Stockholders' Equity
(Deficit)
Accumulated
Common Stock Additional During Total
Paid-in Treasury Development Stockholders'
Shares Amount Capital Stock Stage Equity
-------- -------- --------- ------ ----------- ----------
Balance, 19,180,000 $ 19,180 $ 692,095 $ - $ (4,974) $706,301
December 31,
2001
Shares issued 1,825,000 1,825 271,925 273,750
for consulting
services
Shares issued 500,000 500 42,000 42,500
for consulting
services
Rescinded shares (1,935,000) (1,935) (96,750) (98,685)
Shares issued 32,968,863 32,969 733,162 766,131
pursuant to
merger agmt
Shares issued 3,000,000 3,000 147,000 150,000
for consulting
services
Shares issued 1,725,000 1,725 84,525 86,250
for conv
preferred shares
Shares issued 2,000,000 2,000 138,000 140,000
for consulting
services
Shares issued 950,000 950 41,800 42,750
for consulting
services
Shares issued 6,327,737 6,328 310,059 316,387
for consulting
services
Shares issued 2,539,574 2,540 197,460 200,000
for cash
Shares issued 3,515,000 3,515 253,080 256,595
for consulting
services
Shares issued 1,267,963 1,268 38,732 40,000
for cash
Shares issued 1,500,000 1,500 96,000 97,500
for consulting
services
Net (loss), (1,970,158) (1,970,158)
year ended -------- -------- --------- ------ ----------- ----------
December 31,
2002
75,364,137 $75,364 $3,045,839 $(96,750) $(1,975,132) $1,049,321
========== ======= ========== ======== =========== ==========
The accompanying notes are an integral part of these financial statements.
/50/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Consolidated Statements of Cash Flows
For the year ended June 21, 2001
December 31, (inception) to
------------------------ December 31,
2002 2001 2002
----------- ----------- -------------
Cash flows from operating
activities
Net (loss) $(1,970,158) $ (4,974) $ (1,975,132)
Shares issued for consulting 1,319,482 - 1,319,482
services
Loss on debt settlement 25,925 - 25,925
Depreciation 40,778 - 40,778
Adjustments to reconcile net
(loss) to net cash (used) by
operating activities:
(Increase) in loan to (9,576) - (9,576)
shareholder
(Increase) in notes receivable (5,376) - (5,376)
Increase (decrease) in accounts (4,974) 4,974 -
payable ----------- ----------- -------------
Net cash (used) by operating (603,899) - (603,899)
activities ----------- ----------- -------------
Cash flows from investing - - -
activities ----------- ----------- -------------
Cash flows from financing
activities
Increase in notes payable 475,000 - 475,000
Issuance of common stock 240,000 - 240,000
----------- ----------- -------------
Net cash provided by financing 715,000 - 715,000
activities ----------- ----------- -------------
Net increase in cash 111,101 - 111,101
Cash - beginning - - -
----------- ----------- -------------
Cash - ending $ 111,101 $ - $ 111,101
=========== =========== =============
Supplemental disclosures:
Interest paid $ - $ - $ -
=========== =========== =============
Income taxes paid $ - $ - $ -
=========== =========== =============
Non-cash transactions:
Number of shares issued for 19,617,737 - 19,617,737
consulting services =========== =========== =============
The accompanying notes are an integral part of these financial statements.
/51/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Note 1 - Significant accounting policies and procedures
Organization
The Company was organized March 2, 2001 (Date of Inception)
under the laws of the State of Nevada, as ATR Search
Corporation. On June 21, 2002, the Company merged Medicius,
Inc. and filed amended articles of incorporation changing its
name to CareDecision Corporation.
The Company has a limited history of operations, and in
accordance with SFAS #7, the Company is considered a development
stage company.
Cash and cash equivalents
The Company maintains a cash balance in a non-interest-bearing
account that currently does not exceed federally insured
limits. For the purpose of the statements of cash flows, all
highly liquid investments with an original maturity of three
months or less are considered to be cash equivalents. There
are no cash equivalents as of December 31, 2002.
Investments
Investments in companies over which the Company exercises
significant influence are accounted for by the equity method
whereby the Company includes its proportionate share of earnings
and losses of such companies in earnings. Other long-term
investments are recorded at cost and are written down to their
estimated recoverable amount if there is evidence of a decline
in value which is other than temporary.
Property, plant and equipment
Property, plant and equipment are stated at the lower of cost or
estimated net recoverable amount. The cost of property, plant
and equipment is depreciated using the straight-line method
based on the lesser of the estimated useful lives of the assets
or the lease term based on the following life expectancy:
Computer equipment 5 years
Vehicles 5 years
Office furniture and fixtures 7 years
Repairs and maintenance expenditures are charged to operations
as incurred. Major improvements and replacements, which extend
the useful life of an asset, are capitalized and depreciated
over the remaining estimated useful life of the asset. When
assets are retired or sold, the costs and related accumulated
depreciation and amortization are eliminated and any resulting
gain or loss is reflected in operations.
Revenue recognition
Revenue from proprietary software sales that does not require
further commitment from the company is recognized upon shipment.
Consulting revenue is recognized when the services are rendered.
License revenue is recognized ratably over the term of the
license. The cost of services, consisting of staff payroll,
outside services, equipment rental, communication costs and
supplies, is expensed as incurred.
Advertising costs
The Company expenses all costs of advertising as incurred.
There were no advertising costs included in general and
administrative expenses as of December 31, 2002.
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
/52/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Fair value of financial instruments
Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to
management as of December 31, 2002. The respective carrying
value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments
include cash and accounts payable. Fair values were assumed to
approximate carrying values for cash and payables because they
are short term in nature and their carrying amounts approximate
fair values or they are payable on demand.
Impairment of long-lived assets
The Company reviews its long-lived assets and intangibles
periodically to determine potential impairment by comparing the
carrying value of the long-lived assets with the estimated
future cash flows expected to result from the use of the assets,
including cash flows from disposition. Should the sum of the
expected future cash flows be less than the carrying value, the
Company would recognize an impairment loss. An impairment loss
would be measured by comparing the amount by which the carrying
value exceeds the fair value of the long-lived assets and
intangibles. There were no impairment losses recognized in 2002.
Reporting on the costs of start-up activities
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs
of Start-Up Activities," which provides guidance on the
financial reporting of start-up costs and organizational costs,
requires most costs of start-up activities and organizational
costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the
adoption of SOP 98-5, there has been little or no effect on the
Company's financial statements.
Loss per share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings
Per Share". Basic loss per share is computed by dividing
losses available to common stockholders by the weighted average
number of common shares outstanding during the period. As of
December 31, 2002, the Company had no dilutive common stock
equivalents, such as stock options or warrants.
Dividends
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since
inception.
Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income", establishes
standards for the reporting and display of comprehensive income
and its components in the financial statements. The Company had
no items of other comprehensive income and therefore has not
presented a statement of comprehensive income.
Segment reporting
The Company follows Statement of Financial Accounting Standards
No. 130, "Disclosures About Segments of an Enterprise and
Related Information." The Company operates as a single segment
and will evaluate additional segment disclosure requirements as
it expands its operations.
Income taxes
The Company follows Statement of Financial Accounting Standard
No. 109, "Accounting for Income Taxes" ("SFAS No. 109") for
recording the provision for income taxes. Deferred tax assets
and liabilities are computed based upon the difference between
the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or
settled. Deferred income tax expenses or benefits are based on
the changes in the asset or liability each period. If
available evidence suggests that it is more likely than not
that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not
to be realized.
/53/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Future changes in such valuation allowance are included in the
provision for deferred income taxes in the period of change.
Deferred income taxes may arise from temporary differences
resulting from income and expense items reported for financial
accounting and tax purposes in different periods. Deferred
taxes are classified as current or non-current, depending on
the classification of assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that
are not related to an asset or liability are classified as
current or non-current depending on the periods in which the
temporary differences are expected to reverse.
Recent pronouncements
In July 2002, the FASB issued SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities", which
addresses financial accounting and reporting for costs
associated with exit or disposal activities and supersedes EITF
No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." SFAS
No. 146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is
incurred. Under EITF No. 94-3, a liability for an exit cost was
recognized at the date of an entity's commitment to an exit
plan. SFAS No. 146 also establishes that the liability should
initially be measured and recorded at fair value. The
provisions of SFAS No. 146 will be adopted for exit or disposal
activities that are initiated after December 31, 2002.
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure-an amendment
of SFAS No. 123." This Statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation", to provide
alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation. In addition, this statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures
in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and
the effect of the method used on reported results. The adoption
of SFAS No. 148 is not expected to have a material impact on
the company's financial position or results of operations.
In November 2002, the FASB issued FASB Interpretation ("FIN")
No. 45, "Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees and Indebtedness of
Others", an interpretation of FIN No. 5, 57 and 107, and
rescission of FIN No. 34, "Disclosure of Indirect Guarantees of
Indebtedness of Others". FIN 45 elaborates on the disclosures
to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that
it has issued. It also requires that a guarantor recognize, at
the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The initial
recognition and measurement provisions of this interpretation
are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while, the provisions of the
disclosure requirements are effective for financial statements
of interim or annual periods ending after December 15, 2002.
The company believes that the adoption of such interpretation
will not have a material impact on its financial position or
results of operations and will adopt such interpretation during
fiscal year 2003, as required.
In January 2003, the FASB issued FIN No. 46, "Consolidation of
Variable Interest Entities", an interpretation of Accounting
Research Bulletin No. 51. FIN No. 46 requires that variable
interest entities be consolidated by a company if that company
is subject to a majority of the risk of loss from the variable
interest entity's activities or is entitled to receive a
majority of the entity's residual returns or both. FIN No. 46
also requires disclosures about variable interest entities that
companies are not required to consolidate but in which a
company has a significant variable interest. The consolidation
requirements of FIN No. 46 will apply immediately to variable
interest entities created after January 31, 2003. The
consolidation requirements will apply to entities established
prior to January 31, 2003 in the first fiscal year or interim
period beginning after June 15, 2003. The disclosure
requirements will apply in all financial statements issued
after January 31, 2003. The company will begin to adopt the
provisions of FIN No. 46 during the first quarter of fiscal
2003.
/54/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
Stock-Based Compensation
The Company accounts for stock-based awards to employees in
accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related
interpretations and has adopted the disclosure-only alternative
of SFAS No. 123, "Accounting for Stock-Based Compensation."
Options granted to consultants, independent representatives and
other non-employees are accounted for using the fair value
method as prescribed by SFAS No. 123.
Year end
The Company has adopted December 31 as its fiscal year end.
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 June 21, 2001 (inception) through the year ended
December 31, 2002 of $(2,009,532). 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 - Fixed assets
Fixed assets consists of the following:
December 31, 2002
-----------------
Computer and office equipment $ 260,286
Less accumulated depreciation (40,778)
-----------------
Total $ 219,508
=================
Depreciation expense totaled $40,778 for the year ended December
31, 2002.
Note 4 - 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.
Interest income totaled $2,230 during the year ended December 31,
2002.
Note 5 - Intellectual property
During the year ended December 31, 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
/55/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
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 year ended December 31, 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 - Notes payable
On January 15, 2002, the Company received $40,000 from Keith
Berman, a beneficial owner of the Company, which was due on
December 31, 2003 and accrues interest at 8% per annum. The
principal and accrued interest were convertible 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 was loaned $475,000 from M and E
Equities, LLC. The loan is due in full on April 23, 2004, and
bears interest at a rate of 9% per annum. The principal and
interest of the note are convertible into five shares of the
Company's $0.001 par value common stock for each $1 of debt. The
note is secured by all the assets of the Company including
accounts receivable, inventory, fixed assets, and intangible
assets.
During the year ended December 31, 2002, the Company recorded a
total of $62,573 from various entities and individuals. The
notes are due on demand and accrue interest of $1,715 at a rate
of 8%. During the year ended December 31, 2002, the note-holders
converted their debt and accrued interest into 664,644 shares of
the Company's $0.001 par value common stock.
The Company recorded interest expense of $22,820 during the year
ended December 31, 2002.
Note 7 - Income taxes
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"), which requires use of the liability
method. SFAS No. 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary
differences. Deferred tax assets and liabilities at the end of
each period are determined using the currently enacted tax rates
applied to taxable income in the periods in which the deferred
tax assets and liabilities are expected to be settled or
realized.
The provision for income taxes differs from the amount computed
by applying the statutory federal income tax rate to income
before provision for income taxes. The sources and tax effects
of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
-----
Total -%
=====
As of December 31, 2002, the Company has a net operating loss
carry forward of approximately $2,010,000. The related deferred
asset has been fully reserved.
Note 8 - Stockholder's equity
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.
/56/
CareDecision Corporation
[formerly ATR Search Corporation]
(a Development Stage Company)
Notes
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.
The Company issued 2,539,574 shares of its $0.001 par value
common stock for cash totaling $200,000.
The Company issued 1,267,963 shares of its $0.001 par value
common stock to an officer of the Company for cash totaling
$40,000.
The Company issued 19,617,737 shares of its $0.001 par value
common stock to various individuals and entities for consulting
services valued at $1,405,732, the fair market value of the
underlying shares on the dates of issuance.
The Company rescinded 1,935,000 shares of its $0.001 par value
common stock into treasury stock at a value of $98,685, the fair
market value of the shares on the date of rescission.
There have been no other issuances of common stock.
Note 9 - Related party transactions
The Company received equipment in the amount of $27,857 from
Keith Berman, a beneficial owner of the Company.
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 1,725,000 shares of
the Company's $0.001 par value common stock.
The Company received $40,000 from Keith Berman, a beneficial
owner of the Company, due on December 31, 2003 and accruing
interest at 8% per annum. During the year ended December 31,
2002, Mr. Berman elected to convert the note plus interest into
1,267,963 shares of the Company's $0.001 par value common stock.
Note 10 - Warrants
The Company 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 MED 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 continuing company has retained December 31 as its fiscal
year end.
/57/
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers
THE ARTICLES OF INCORPORATION OF THE COMPANY PROVIDE FOR
INDEMNIFICATION OF EMPLOYEES AND OFFICERS IN CERTAIN CASES.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR
PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING
PROVISIONS, THE COMPANY HAS BEEN INFORMED THAT IN THE OPINION OF
THE SECURTIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS
AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE
UNENFORCEABLE
Section 78.751 of the Nevada General Corporation Laws
provides as follows: 78.751 Indemnification of officers,
directors, employees and agents; advance of expenses.
1. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that he is
or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses, including attorney's fees, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with the action, suitor proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
does not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation,
and that, with respect to any criminal action or proceeding, he
had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit
if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that
the court in which the action or suit was brought or other court
of competent jurisdiction determines upon application that in
view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for such expenses as the
court deems proper.
3. To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against
expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.
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/58/
4. Any indemnification under subsections 1 and 2, unless
ordered by a court or advanced pursuant to subsection 5, must be
made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made: (a) By the stockholders: (b) By the
board of directors by majority vote of a quorum consisting o
directors who were not parties to act, suit or proceeding; (c) If
a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion; or (d) If a quorum consisting
of directors who were not parties to the act, suit or proceeding
cannot to obtained, by independent legal counsel in a written
opinion; or
5. The Articles of Incorporation, the Bylaws or an
agreement made by the corporation may provide that the expenses
of officers and directors incurred in defending a civil or
criminal, suit or proceeding must be paid by the corporation as
they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or
on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that
he is not entitled to be indemnified by corporation. The
provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than
the directors or officers may be entitled under any contract or
otherwise by law.
6. The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to this section: (a)
Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either
an action in his official capacity or an action in another
capacity while holding his office, except that indemnification,
unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses made pursuant to subsection 5, may not be
made to or on behalf of any director or officer if a final
adjudication establishes that his act or omissions involved
intentional misconduct, fraud or a knowing violation of the law
and was material to the cause of action. (b) Continues for a
person who has ceased to be a director, officer, employee or
agent and endures to the benefit of the heirs, executors and
administrators of such a person. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Item 25. Expenses of Issuance and Distribution
The following is an itemized statement of the estimated
amounts of all expenses payable by the registrant in connection
with the registration of the common stock offered hereby:
Nature of Expenses Amount
SEC Registration Fee $ 897.71
Accounting Fees and Expenses $ 5,000.00
Legal Fees and Expenses $ 5,000.00
Printing Expenses $ 2,000.00
Blue Sky Qualification Fees and Expenses $ 0
Transfer Agent's Fee $ 1,000.00
TOTAL $ 13,897.71
/59/
Item 26. Recent Sales of Unregistered Securities
The following paragraphs set forth information with respect
to all securities sold by us since inception without registration
under the Securities Act of 1933, as amended (the "Securities
Act"). The information includes the names of the purchasers, the
date of issuance, the title and number of securities sold and the
consideration received by us for the issuance of these shares.
The consulting services agreements were made with such
investors that are sophisticated investors based on their
financial resources and knowledge of investments. They had
access to or were provided with relevant financial and other
information relating to the CareDecision Corporation.
Accordingly, the issuance of shares was exempt from the
registration requirements of the Act pursuant to Section 4(2) of
the Act.
On March 16, 2001, the Company issued 875,000 shares of its
$0.001 par value common stock to Mr. Michael Vogel for cash of
$875 and 1,750,000 shares of par value common stock to Mr. Robert
L. Cox in exchange for cash in the amount of $1,750.
During March 2001, the Company issued 1,525,000 shares to
G&M Management & Administrative Services, Ltd., (Andrew Pieri is
the President) for $49,500. This transaction was made in
accordance with Section 4(2) of the Securities Act of 1933, as
amended, which exempts from registration transactions by an
issuer not involving a "public offering."
During March 2001, we issued 350,000 shares to Corporate
Regulatory Services, LLC in lieu of services rendered in the
amount of $26,250. The issuance of shares represented payment
for facilitating the preparation of the documentation necessary
to become a publicly traded company. This stock issuance was
made in accordance with Section 4(2) of the Securities Act of
1933, as amended. The consulting company is a sophisticated
purchaser. They were provided full and complete access to our
corporate records, as they assisted us in preparing our offering
documentation. No brokers or dealers were involved in this
transaction and no discounts or commissions were paid.
In March of 2001, we issued 3,500,000 shares of our $0.001
par value common stock at $0.10 per share to Sarcor Management,
SA, a British Virgin Island corporation, as a $350,000 down
payment on a technology licensing agreement.
Effective May 7, 2001, we amended our articles of
incorporation increasing our authorized shares from 20,000,000 to
100,000,000 shares of $0.001 par value common stock. All
references to shares issued and outstanding reflect the increase
of authorization of 100,000,000 issuable shares affected May 7,
2001.
On May 26, 2001 we conducted an offering in which we issued
1,340,000 shares of common stock to 17 unaffiliated shareholders
at a price of $0.10 per share, for total receipts of $134,000 in
cash. This offering was made in reliance upon an exemption from
the registration provisions of the Securities Act of 1933, as
amended, in accordance with Regulation D, Rule 504 of the Act.
In addition, this offering was made on a best efforts basis and
was not underwritten. In regards to the May 2001 offering,
listed below are the requirements set forth under Regulation D,
Rule 504 and the facts which support the availability of Rule
504 to the May 2001 offering:
a. Exemption. Offers and sales of securities that satisfy
the conditions in paragraph (b) of this Rule 504 by an issuer
that is not:
1. subject to the reporting requirements of section 13 or 15(d)
of the Exchange Act;
2. an investment company; or
3. a development stage company that either has no specific
business plan or purpose or has indicated that its business plan
is to engage in a merger or acquisition with an unidentified
company or companies, or other entity or person, shall be exempt
from the provision of section 5 of the Act under section 3(b) of
the Act.
/60/
Facts: At the time of the May 2001 offering, we were not
subject to the reporting requirements of section 13 or section
15(d) of the Exchange Act. Further, we are not now, nor were we
at the time of the May 2001 offering, considered to be an
investment company. Finally, since inception, we have pursued a
specific business plan of placing information technology ("IT")
professionals with technology sector companies on a temporary or
permanent basis and continue to do so.
b. Conditions to be met.
1. General Conditions. To qualify for exemption under this
Rule 504, offers and sales must satisfy the terms and conditions
of Rule 501 and Rule 502 (a), (c) and (d), except that the
provisions of Rule 502 (c) and (d) will not apply to offers and
sales of securities under this Rule 504 that are made:
i. Exclusively in one or more states that provide for the
registration of the securities, and require the public filing and
delivery to investors of a substantive disclosure document before
sale, and are made in accordance with those state provisions;
ii. In one or more states that have no provision for the
registration of the securities or the public filing or delivery
of a disclosure document before sale, if the securities have been
registered in at least one state that provides for such
registration, public filing and delivery before sale, offers and
sales are made in that state in accordance with such provisions,
and the disclosure document is delivered before sale to all
purchasers (including those in the states that have no such
procedure); or
iii. Exclusively according to state law exemptions from
registration that permit general solicitation and general
advertising so long as sales are made only to "accredited
investors" as defined in Rule 501(a).
Facts: On May 17, 2001, we were issued a permit to sell
securities by the State of New York, pursuant to our application
for registration by qualification of our offering of Common Stock
in that state. The application for registration by qualification
was filed pursuant to the provisions of Section 359-e of the New
York General Business Law, which requires the public filing and
delivery to investors of a substantive disclosure document before
sale. On August 24, 2001, we completed a public offering of
shares of our common stock pursuant to Regulation D, Rule 504 of
the Securities Act of 1933, as amended, and the registration by
qualification of said offering in the State of New York, whereby
we sold 1,340,000 shares of Common Stock to approximately 17
unaffiliated shareholders of record, none of whom were or are
officers or directors of ours. The entire offering was conducted
exclusively in the State of New York, pursuant to the permit
issued by the State of New York.
2. The aggregate offering price for an offering of
securities under this Rule 504, as defined in Rule 501(c), shall
not exceed $1,000,000, less the aggregate offering price for all
securities sold within the twelve months before the start of and
during the offering of securities under this Rule 504, in
reliance on any exemption under section 3(b), or in violation of
section 5(a) of the Securities Act.
Facts: The aggregate offering price for the May 2001
offering was $400,000, of which $134,000 was raised in the
offering.
In October of 2001, we issued 150,000 shares of our $0.001
par value common stock to Mary Lou Cox, mother of Robert Cox, the
Company's president, for consulting services valued at $15,000.
Ms. Cox provided general clerical and administrative services to
the company in lieu of salary or hourly wage.
In October of 2001, we issued 500,000 shares of our $0.001
par value common stock to James De Luca, an independent
consultant, for consulting services valued at $50,000. Mr. De
Luca helped the company put in place policies and procedures for
its IT recruitment business and also provided the company's then
Vice-President with a list of IT candidates and contacts in lieu
of a salary or hourly wage.
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/61/
In June 2002 we issued 1,725,000 shares of our $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.
Should M&E Equities, LLC convert its Medicius Note into
reserved merger shares, those shares shall total a maximum of
eight million 8,000,000 shares, or a portion thereof, and shall
be valued a the time(s) of conversion.
On February 17, 2002, the Company executed a business
consulting agreement with MLSA whereby the Company issued
1,350,000 shares of its $0.001 par value common stock to Mark
Lancaster for consulting services valued at $162,000. The
consulting services are to be rendered over a period of 90 days
with an automatic three-month renewal provision. Previously
filed via an S-8 on 3/1/02. Mr. Lancaster's services included
his providing certain strategic planning services to the
Corporation in the area of short term IT recruiting, aiding and
assisting the Corporation as a consultant to potential strategic
alliances with other similar short term IT firms.
On February 26, 2002, the Company executed a consulting
agreement with Qurag, Inc. whereby the Company issued 475,000
shares to Chaim Drizin, a shareholder of the Company, for
consulting services valued at $30,875. The consulting services
are to be rendered over a period of 90 days with an automatic
three-month renewal provision. Previously filed via an S-8 on
3/1/02.
Mr. Drizin's services include, providing certain strategic
planning services to the Corporation, aiding and assisting the
Corporation as a consultant to potential strategic alliances with
companies in Brooklyn, NY that were primarily Orthodox Jewish
owned, in particular in the insurance trade.
On March 27, 2002, the Company executed a consulting
agreement with Promark, Inc. whereby the Company issued 500,000
shares to Ken Lowman for consulting services valued at $50,000.
The consulting services are to be rendered over a period of 90
days with an automatic three-month renewal provision. Previously
filed via an S-8 on 4/17/02. Mr. Lowman's services included,
providing certain strategic planning services to the Corporation
as it prepared to be publicly traded and aiding and assisting the
Corporation as a consultant to potential strategic alliances with
Canadian firms.
On April 20, 2002, Medicius executed a secured convertible
revolving promissory note agreement with M&E Equities, LLC
("M&E") whereby Medicius granted M&E a continuing security
interest in and a general lien upon the Collateral for a loan
valued at $500,000. Except as otherwise contemplated in the
transaction more fully described in the Letter of Intent by and
between ATR Search, Inc. and Medicius, Inc., dated April 5, 2002.
On July 9, 2002, we 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. common share held,
and three point five Company shares for each preferred share.
On July 12, 2002, the Company executed an addendum to the
March 27, 2002, consulting agreement with Promark, Inc. whereby
the Company issued 3,000,000 shares of its $0.001 par value
common stock to Ken Lowman for consulting services valued at
$150,000. The consulting services are to be rendered over a
period of 90 days with an automatic three-month renewal
provision. Previously filed via an S-8 on 4/1/02.
On August 1, 2002, we issued 3,000,00 shares of our Common
Stock to Ken Lowman for consulting services valued at $150,000.
On August 1, 2002, CareDecision.net, Inc. elected to convert
its preferred shares into 5,075,000 shares of the Company's
$0.001 par value common stock.
On August 9, 2002, we issued 2,000,000 restricted shares of
our Common Stock to Barbara Asbell for consulting services valued
at $80,000.
On September 4, 2002, we issued 950,000 shares of our Common
Stock to Barbara Asbell for consulting services valued at $38,000
/62/
On September 30, 2002, we issued 875,000 restricted shares
of common stock, to CareDecision.net, Inc., for purchasing the
empower care software and the care.net web domain of
CareDecision.net, Inc.
On September 30, 2002, we issued 1,267,963 restricted shares
of CareDecision Corporation common stock, to Keith Berman for his
retiring his CareDecision Corporation note.
On September 30, 2002 we issued 640,000 restricted shares of
CareDecision Corporation common stock to Robert Jagunich for his
exercising 640,000 warrants at a strike price of $0.05;
On September 30, 2002, we issued 2,539,574 restricted shares
of our Common Stock to Paradigm Partners for consulting services
valued at $101,582.96. Paradigm was retained to provide
information technology consulting to the company to ascertain the
applicability of the company's technologies to other markets.
Paradigm had interest and expertise in certain real-estate
markets.
On October 8, 2002 we issued 6,327,737 shares of our Common
Stock as follows:
NAME NUMBER OF SHARES
Anfel Trading 524,781
Barbara Asbell 218,057
Michael Belcher 9,722
Keith Berman 848,768
Alan Binder 5,556
Catherine Dewitt 726,000
Leon B. Eisikowitz 38,070
Allen Zev Friedman 152,250
John Garber 365,001
Robert Jagunich 773,768
Marlene Kriger 38,070
William Lyons 272,224
Frady Makowsky 43,395
Joseph Makowsky 87,015
Benjamin Mayer 600,000
New York Auto Mall 217,485
P R Diamonds 76,125
Sanjay Patel 122,223
Michael Petras 66,667
Tom Poff 9,722
Jennifer C. Schiffman 152,250
David Schwartz 810,000
Shabnam Sharabi 5,556
Morris Weiss 61,350
Moshe Williger 87,015
Leslie Wolf 16,667
/63/
On October 21, 2002, the Company executed a consulting
agreement with Robert Koch whereby the Company issued 2,000,000
shares to Mr. Koch for consulting services. The consulting
services are to be rendered over a period of nine months. The
consulting services are to be rendered over a period of one
hundred and twenty days. Mr. Koch's services include providing
the Company with corporate consulting services in connection with
mergers and acquisitions, corporate finance, corporate finance
relations, introductions to other financial relations companies
and other financial services.
On December 11, 2002, the Company executed a service
agreement with Robert Jagunich, a shareholder of the Company,
whereby the Company issued 4,127,093 shares for consulting
services. The consulting services are to be rendered over a
period of nine months. Mr. Jagunich's services include providing
information technology consulting to the Company and to make an
introduction to a large property management firm in Texas, for
the company's then new concept of a residential management
product.
On December 13, 2002, the Company executed a consulting
agreement with Barbara Asbell, a shareholder of the Company,
whereby the Company issued 1,000,000 shares for consulting
services. The consulting services are to be rendered over a
period of 90 days with an automatic three-month renewal
provision.
Asbell's services were to be rendered over a period of 90 days
with an automatic three-month renewal provision, hence the
December extension. Mrs. Asbell's services include providing
certain strategic human resources services particularly in
recruiting and hiring of programmers with a Microsoft Windows CE
background.
On December 13, 2002, the Company executed a consulting
agreement with Wizard Enterprises (wizard"), whereby the Company
issued 2,500,000 shares for consulting services. The consulting
services are to be rendered until the Agreement terminates
pursuant to written notification by either the Company or Wizard,
which notification may occur at any time for any reason.
Wizard's consulting services related to introductions of the
company's then new residential management product concept. The
first consulting retainer was completed for introductions in New
York City.
On December 20, 2002, the Company executed a consulting
agreement with Wizard Enterprises (wizard"), whereby the Company
issued 1,888,855 shares for consulting services. The consulting
services are to be rendered until the Agreement terminates
pursuant to written notification by either the Company or Wizard,
which notification may occur at any time for any reason.
Wizard's consulting services related to introductions of the
company's then new residential management product concept, this
second retainer added the remainder of the state of New York and
New Jersey. Both of these agreements remain active.
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.
On March 28, 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 May 15, 2003, David Mizrahi settled his note, with a face
value of $20,000, plus interest from January 5, 2002 through May
14, 2003, a total of $22,475, to a conversion of 25 shares of
CareDecision Corporation common stock for each dollar of
investment, plus interest. David Mizrahi also, converted 60,000
Class "A" Warrants of Medicius, Inc., with a value of $14,619,
into CareDecision Corporation common stock on a 3:1 basis. The
Warrant converted into 180,000 shares of common stock of
CareDecision Corporation.
/64/
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 27. Exhibits
The following documents are filed or incorporated by reference as
exhibits to this report:
Exhibit 3a Articles of Incorporation - Filed March 2, 2001
(Rendered as Previously Filed)
Exhibit 3b Articles of Amendments to Articles of Incorporation - Filed
May 9, 2001 (Rendered as Previously Filed)
Exhibit 3c Articles of Amendments to Articles of Incorporation - Filed
August 2, 2002 (Rendered as Previously Filed)
Exhibit 3d Bylaws of CareDecision Corporation (formerly ATR Search
Corporation) - (Rendered as Previously Filed)
Exhibit 10.1 Consulting Agreement with Dailyfinancial.com, Inc. -
(Rendered as Previously Filed)
Exhibit 10.2 Agent's Representation Agreement - (Rendered as Previously
Filed)
Exhibit 10.3 Robert Jagunich Service Agreement - (Rendered as Previously
Filed)
Exhibit 10.4 M&E Secured Convertible Revolving Promissory Note Agreement
- (Rendered as Previously Filed)
Exhibit 10.5 Robert Jagunich Service Agreement - (Rendered as Previously
Filed)
Exhibit 10.6 Wizard Enterprises Consulting Agreement - (Rendered as
Previously Filed)
Exhibit 10.7 Wizard Enterprises Consulting Agreement - (Rendered as
Previously Filed)
Exhibit 10.8 Barbara Asbell Consulting Agreement - (Rendered as
Previously Filed)
Exhibit 10.9 Program Agreement - (Rendered as Previously Filed)
Exhibit 10.10 Paradigm Partners Consulting Agreement - (Rendered as
Previously Filed)
Exhibit 10.11 Letter of Intent for Plan of Merger - (Rendered as
Previously Filed)
Exhibit 10.12 Intellectual Property Purchase Agreement - (Rendered as
Previously Filed)
Exhibit 10.13 Thomas Chillemi Convertible Loan Agreement
Exhibit 10.14 Thomas Chillemi Notice of Conversion of Loan Under
Convertible Loan Agreement
Exhibit 10.15 Consulting Agreement with Anthony Quintiliana - (Rendered
as Previously Filed on August 14 with Form S-8)
Exhibit 10.16 Consulting Agreement with Barbara Asbell - (Rendered as
Previously Filed on August 14 with Form S-8)
Exhibit 10.17 Consulting Agreement with Thomas Chillemi - (Rendered as
Previously Filed on August 14 with Form S-8)
Exhibit 10.18 Consulting Agreement with Joseph A. Wolf - (Rendered as
Previously Filed on August 14 with Form S-8)
Exhibit 10.19 Consulting Agreement with Leslie Abraham - (Rendered as
Previously Filed on August 14 with Form S-8)
Exhibit 10.20 Consulting Agreement with Ely Mandell - (Rendered as
Previously Filed on August 14 with Form S-8)
Exhibit 10.21 David Mizrahi Settlement of Note
Exhibit 5 Attorney Legal Opinion and Consent Letter - (Rendered as
Previously Filed)
Exhibit 23.1 Independent Auditor's Consent - (Rendered as Previously
Filed)
Exhibit 23.2 Independent Auditor's Consent - For the Period Ended June
30, 2003
/65/
Item 28. Undertakings
1. The Registrant will, during any period in which it offers or
sells securities, file a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) Include any additional or changed material information on
the plan of distribution.
2. The Registrant will, for determining liability under the
Securities Act, treat each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona
fide offering.
3. The Registrant will file a post-effective amendment to remove
from registration any of the securities that remain unsold at the
end of the offering.
4. The Registrant will provide to each purchaser, if any, at the
closing certificates in such denominations and registered in such
names to permit prompt delivery to each purchaser.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act
and is, therefore, unenforceable. 6. For purposes of determining
any liability under the Act, the information omitted from the
form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus
filed by the Registrant under Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration
statement as of the time the Commission declared it effective.
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the following persons in the capacities and on the date
indicated have signed this registration statement:
Signature Title Date
/s/ Robert Cox Director, President, and Chief August 28, 2003
-------------- Executive Officer
Robert Cox
/s/ Keith Berman Director, Secretary August 28, 2003
----------------
Keith Berman
Director August 28, 2003
------------------
William Lyons
/s/ Robert Jagunich Director and Chairman of the August 28, 2003
------------------ Board
Robert Jagunich
/66/
End of Filing