-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KtoxuUgC1WzUuPrLxnAlRx9iU70wxRe4zASXZVTaJ5JMV9FYCFsONSAymb2FGz0a dIkZUCW2q3TXzZmBmehF3g== 0000950116-97-001522.txt : 19970815 0000950116-97-001522.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950116-97-001522 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEALTHDESK CORP CENTRAL INDEX KEY: 0001023767 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 843165144 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21819 FILM NUMBER: 97663845 BUSINESS ADDRESS: STREET 1: GRAY CARY WARE FREIDENRICH STREET 2: 400 HAMILTON AVENUE CITY: PALO ALTO STATE: CA ZIP: 94301 BUSINESS PHONE: 5108832160 10QSB 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB __X_ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 1997 ____ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1994 Commission File Number. 0-21819 HealthDesk Corporation (Exact name of Company as specified in charter) California 94-3165144 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2560 Ninth Street, Suite 220, Berkeley, California 94710 (Address of principal executive offices) (Zip Code) (510) 883-2160 (Company's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X ------ ------- As of August 6, 1997, there were 5,392,845 shares of the Company's Common Stock outstanding, 1,955,000 Redeemable Warrants outstanding and 340,000 Underwriter's Warrants outstanding. Transitional Small Business Disclosure Format Yes No X ------ ------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INDEX Part I Page Item 1 Financial Statements ......................................... 3 Item 2 Management's Discussion and Analysis or Plan Operation........ 3 Part II Item 4 Submission of Matters to a Vote of Security Holders........... 5 Item 6 Exhibits and Reports on Form 8-K.............................. 6 2 Part I Item 1. Financial Statements. The following Financial Statements are filed with this report as pages F-1 through F-7 following the signature page: Index to Interim Financial Statements Condensed Balance Sheets Condensed Statements of Operations Condensed Statements of Shareholders' Equity (Deficit) Condensed Statements of Cash Flows Notes to Condensed Financial Statements Item 2. Management's Discussion and Analysis or Plan Operation. The Company's operating performance each quarter is subject to various risks and uncertainties as discussed in the Company's Form 10-KSB for the year ended December 31, 1996. The following discussion should be read in conjunction with the section entitled "Factors Affecting the Company's Business, Operating Results and Financial Condition" in the Form 10-KSB. The information set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" below includes "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the safe harbor created by the section. Readers are cautioned not to place undue reliance on these forward-looking statements as they speak only as of the date hereof. Overview The Company was organized in August 1992 and is still in the development stage. Since inception, the Company has been engaged primarily in product development activities. The Company's initial product was introduced in early 1993 and the Company has not yet proven to be commercially viable. The Company has not yet generated any meaningful revenues, and will not generate any meaningful revenues until after the Company successfully completes development and market testing of HealthDesk OnLine and attracts and retains a significant number of subscribers. For the period August 28, 1992 (inception) to June 30, 1997, the Company incurred a cumulative net loss of approximately $8,631,348. Since June 30, 1997, the Company has continued to incur increasing and significant losses and anticipates that it will continue to incur significant losses until, at the earliest, the Company generates sufficient revenues to offset the substantial up-front expenditures and operating costs associated with developing and commercializing its proposed products. In January 1997 the Company completed an Initial Public Offering ("IPO") raising net proceeds of $7,018,788 through the issuance of 1,700,000 shares of Common Stock and 1,955,000 Warrants. The Company's results of operations for the six months ended June 30, 1997 includes a $145,023 charge relating to the amortization of debt discount and issuance costs related to notes issued in a bridge financing completed in October 1996 (the "Bridge Financing"). The statements regarding the Company's future cash requirements are forward looking statements that are subject to risks and uncertainties which could result in the Company's inability to meet its funding requirements for the time period indicated. Software development costs (consisting primarily of salaries and related expenses) incurred prior to establishing technological feasibility are expensed in accordance with Financial Accounting Standards Board (FASB) Statement No. 86. In accordance with FASB 86, the Company will capitalize software development costs at such time as the technological feasibility of the product has been established. In February 1997, Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (FAS 128) was issued and is effective for the Company's year ending December 31, 1997. In March 1997, Statement of Financial Accounting Standards No. 129, "Disclosure of Information About Capital Structure" was issued and is effective for the Company's year ending December 31, 1998. In June 1997, Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and Statement of Financial Accounting Standards No. 131 "Disclosures About Segments of An Enterprise and Related Information" were issued and are also effective for the year ending December 31, 1998. The Company has not determined the impact of the implementation of these pronouncements. 3 Results of Operations Revenue increased from $5,158 for the three months ended June 30, 1996 to $25,558 for the three months ended June 30, 1997, and revenue increased from $6,016 for the six months ended June 30, 1996 to $226,043 for the six months ended June 30, 1997. These increases were primarily attributable to an increase in development fee revenue associated with the development of HealthDesk OnLine for Diabetes. During 1996, the Company had focused its efforts on the initial development of HealthDesk OnLine and reduced its marketing and sales efforts relating to its original Desktop HealthDesk product. Product development costs increased by 42.1% from $427,581 for the three months ended June 30, 1996 to $607,714 for the three months ended June 30, 1997, and product development costs increased by 75.5% from $743,688 for the six months ended June 30, 1996 to $1,304,931 for the six months ended June 30, 1997. The increase in expenditures was principally related to the expansion of the programming staff and associated costs related to the development of HealthDesk OnLine for Diabetes during the three months and six months ended June 30, 1997. Sales and marketing costs increased by 97.4% from $187,790 for the three months ended June 30, 1996 to $370,691 for the three months ended June 30, 1997, and sales and marketing costs increased by 195.0% from $274,380 for the six months ended June 30, 1996 to $809,409 for the six months ended June 30, 1997. These increases resulted primarily from the hiring of additional marketing personnel and associated collateral and travel and entertainment in connection with the marketing of HealthDesk OnLine for diabetes during the three months and six months ended June 30, 1997. General and administrative costs decreased by 44.8% from $305,653 for the three months ended June 30, 1996 to $168,688 for the three months ended June 30, 1997. This decrease was primarily attributable to a change in the allocation of resources to marketing and development activities and the write-off of deferred offering costs of $118,113, in the quarter ended June 30, 1996. General and administrative costs decreased by 56.3% from $715,756 for the six months ended June 30, 1996 to $312,605 for the six months ended June 30, 1997. This decrease was primarily attributable to a change in the allocation of resources to marketing and development activities and the write-off of the deferred offering costs noted above, in quarter ended June 30, 1996. Other income (expense), net (including interest expense and interest income) changed from expense of ($1,934) for the three months ended June 30, 1996 to income of $40,471 for the three months ended June 30, 1997. This change was primarily attributable to the increased interest expense as a result of higher levels of borrowings prior to the IPO. Other income (expense), net (including interest expense, interest income and amortization of discount and issuance costs) changed from income of $3,154 for the six months ended June 30, 1996 to expense of ($81,604) for the six months ended June 30, 1997. This change was primarily attributable to the remaining amortization of the non-recurring bridge discount and deferred debt issuance costs of $145,023 and increased interest expense as a result of higher levels of borrowings prior to the IPO. As a result of the foregoing, the Company incurred a net loss of $1,081,264 and $2,282,906 for the three months and six months ended June 30, 1997, as compared to a net loss of $917,200 and $1,725,054 for the comparable periods in 1996. Liquidity and Capital Resources In January 1997, the Company consummated an underwritten initial public offering of 1,700,000 shares of Common Stock at an offering price of $5.00 per share and 1,955,000 Warrants at an offering price of $.10 per Warrant. The net proceeds to the Company were $7,018,788 after deducting issuance costs of $1,676,712. Each Warrant entitles the registered holder thereof to purchase one share of Common Stock at an price of $5.00, subject to adjustment in certain circumstances, at any time through and including January 16, 2002. The Warrants are redeemable by the Company, upon the consent of the Underwriter, at any time, upon notice of not less than 30 days, at a price of $.10 per Warrant, provided that the closing bid quotation of Common Stock on all 30 of the trading days ending on the third day prior to the day which the Company gives notice has been at least 150% (currently $7.50, subject to adjustment) of the then effective exercise price of the Warrants. Upon the closing of the IPO, the Company repaid $2,000,000 principal amount of bridge notes financing and converted the outstanding convertible notes into 100,000 shares of Common Stock. In addition, all outstanding shares of Series A Preferred Stock were converted into 1,059,600 shares of Common Stock. 4 At June 30, 1997, the Company had cash and cash equivalents of $2,824,978, as compared to $232,766 at June 30, 1996. During the first half of 1996, $1,347,840 of cash was used in operating activities, principally as a result of the $1,725,054 loss incurred in the first half of 1996. During the first half of 1997, $2,299,346 of cash was used in operating activities, principally as a result of the $2,282,906 loss incurred in the first half of 1997 and a $841,278 decrease in accounts payable and accrued liabilities as offset by $145,023 in amortization of non cash discount associated with the Bridge Financing, and a $548,816 decrease in prepaid expenses and deferred costs. Included in the $841,278 were non-recurring accounting, legal and printing charges of $466,411 which related to the IPO and the Bridge Financing and a non-recurring bonus of $80,000 paid to an officer per the employment agreement. Working capital/(deficit) at June 30, 1997 was $2,469,731, as compared to $(765,337) at June 30, 1996. The Company expects to incur significant expenses in connection with its operations, including expenses associated with hiring additional marketing and sales personnel and the research and development of product lines. The Company anticipates, based on its current proposed growth plans and assumptions relating to its growth and operations, that the proceeds from the IPO and planned revenues will be sufficient to satisfy the Company's contemplated cash requirements through 1997. However, there can be no assurance that the Company's funding requirements will not increase significantly as a result of unforeseen circumstances or that the Company's cash used by operating activities will not increase. If the Company is required to seek third-party sources of financing to meet its short-term or long-term funding needs, there can be no assurance that the Company would be able to obtain public or private third-party sources of financing or, if obtained, that favorable terms for such financing would be obtained. In addition, given the trading history of the Company's common stock since the initial public offering, there can be no assurance that the Company would be able to raise additional cash through the warrants or other public and/or private offerings of its common stock. The Company's capital requirements relating to the development and commercialization of HealthDesk OnLine have been and will continue to be significant. Other than as described in this 10-QSB, the Company has no material commitments for capital expenditures. For the period August 28, 1992 (inception) to June 30, 1997, the Company had capital expenditures of approximately $1,015,000 relating primarily to computer equipment. Part II Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Shareholders (the "Annual Meeting") was held on June 25, 1997 at 9:00a.m., local time, at the Berkeley Marina Marriott at 200 Marina Boulevard, Berkeley, California. The Annual Meeting was held for the purpose of (a) electing the Board of Directors, (b) ratifying and approving the Company's independent auditors for the fiscal year ending December 31, 1997 and (c) transacting other business as may properly come before the Annual Meeting. The two matters below were voted upon and approved: Matter No. 1 - Election of Board of Directors: The following persons were duly elected to the Board for the ensuing year and until their successors are duly elected and qualified: NOMINATION FOR AGAINST ---------- --- ------- Peter S. O'Donnell 4,216,812 94,400 John Pappajohn 4,216,812 94,400 James A. Gordon 4,216,812 94,400 Dr. Joseph Rudick, Jr. 4,216,812 94,400 David Sengpiel 4,216,812 94,400 Dr. Edward C. Geehr 4,216,812 94,400 Matter No. 2 - Ratification of the Appointment of Coopers & Lybrand L.L.P. as the Independent Auditors for the Fiscal Year Ending December 31, 1997: NOMINATION FOR AGAINST ABSTAINED ---------- --- ------- --------- Coopers & Lybrand L.L.P. 4,204,212 1,000 106,000 5 Item 6. Exhibits and Reports on Form 8-K. a) Exhibits: 11.1 Statement Regarding computation of earnings per share 27 Financial Data Schedule b) No reports have been filed on Form 8-K in the Quarter ended June 30, 1997. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized. HealthDesk Corporation By: /s/ Timothy S. Yamauchi Date: August 14, 1997 ----------------------- Timothy S. Yamauchi Chief Financial Officer (principal financial and accounting officer) 6 HealthDesk Corporation (a Development Stage Company) CONTENTS
Page Condensed Balance Sheets as of December 31, 1996 and June 30, 1997 (unaudited).......................... F-2 Condensed Statements of Operations for the three months and the six months ended June 30, 1996 and 1997, and period from inception to June 30, 1997 (unaudited)..................................... F-3 Condensed Statements of Shareholders' Equity (Deficit) for the years ended December 31, 1992, 1993, 1994, 1995, 1996 and the six months ended June 30, 1997 (unaudited)............................ F-4 Condensed Statements of Cash Flows for the six months ended June 30, 1996 and 1997 and period from inception to June 30, 1997 (unaudited).......................................................... F-5 Notes to Condensed Financial Statements................................................................. F-6
F-1 HealthDesk Corporation (a Development Stage Company) CONDENSED BALANCE SHEETS
December 31, June 30 ASSETS 1996 1997 ---- ---- (unaudited) Current assets: Cash and cash equivalents.............................. $ 198,277 $ 2,824,978 Prepaid expenses and other............................. 172,294 115,589 Deferred offering and debt issuance costs.............. 492,109 ---- ------------------ ------------------ Total current assets................................ 862,680 2,940,567 Property and equipment, net............................ 568,040 535,429 Other assets........................................... 17,517 16,684 ------------------ ------------------ Total assets.................................... $ 1,448,237 $ 3,492,680 ================== ================== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable....................................... $ 857,428 $ 116,396 Accrued liabilities.................................... 441,076 354,440 Notes payable.......................................... 1,851,546 ---- Convertible notes payable and accrued interest......... 517,041 ---- ------------------ ------------------ Total liabilities 3,667,091 470,836 ------------------ ------------------ Shareholders' equity (deficit): Convertible preferred stock, no par value; authorized 3,000,000 shares; issued and outstanding 1,059,600 shares at December 31, 1996 and none at June 30, 1997 2,183,036 ---- Common stock, no par value; authorized 17,000,000 shares; issued and outstanding 2,530,120, and 5,392,845 at December 31, 1996, and June 30, 1997, respectively........................................ 1,946,552 11,457,505 Warrants............................................... ---- 195,687 Deficit accumulated during the development stage....... (6,348,442) (8,631,348) ------------------- ------------------- Total shareholders' equity (deficit)................ (2,218,854) 3,021,844 ------------------- ------------------ Total liabilities and shareholders' equity (deficit)..................................... $ 1,448,237 $ 3,492,680 ================== ==================
The accompanying notes are an integral part of these financial statements. F-2 HealthDesk Corporation (a Development Stage Company) CONDENSED STATEMENTS OF OPERATIONS (unaudited)
August 28, 1992 (Inception) Three Months Ended June 30, Six Months Ended June 30, to --------------------------- --------------------------- June 30, 1996 1997 1996 1997 1997 ---- ---- ---- ---- ---- Revenue: Software development and licensing............ $ 5,158 $ 25,558 $ 6,016 $ 226,043 $ 969,582 Other......................................... ---- ---- ---- ---- 10,158 ----------- ------------ ------------ ------------ ------------ Total revenue............................... 5,158 25,558 6,016 226,043 979,740 ----------- ------------ ------------ ------------ ------------ Costs and expenses: Product development........................... 427,581 607,714 743,688 1,304,931 4,015,048 Sales and marketing........................... 187,790 370,691 274,380 809,409 2,735,899 General and administrative.................... 305,653 168,688 715,756 312,605 1,798,035 ----------- ------------ ------------ ------------ ------------ Total costs and expenses................... 921,024 1,147,093 1,733,824 2,426,945 8,548,982 ----------- ------------ ------------ ------------ ------------ Loss from operations....................... (915,866) (1,121,535) (1,727,808) (2,200,902) (7,569,242) Interest expense................................. (8,750) --- (17,998) (14,900) (127,232) Interest income.................................. 6,816 40,471 21,152 78,319 113,098 Amortization of discount and issuance cost associated with bridge financing............. ---- ---- ---- (145,023) (1,029,250) Other expenses................................... ---- ---- ---- ---- (14,322) ----------- ------------ ------------ ------------ ------------- Loss before income taxes.................... (917,800) (1,081,064) (1,724,654) (2,282,506) (8,626,948) Provision for income taxes....................... (600) 200 400 400 4,400 ------------ ------------ ------------ ------------ ------------ Net loss................................... $ (917,200) $ (1,081,264) $ (1,725,054) $ (2,282,906) $ (8,631,348) ============ ============= ============= ============= ============= Net loss per share............................... $ (0.24) $ (0.20) $ (0.45) $ (0.45) ============ ============ ============ ============ Weighted average number of shares of common stock 3,824,907 5,392,845 3,824,887 5,028,279 =========== ============ ============ ============
The accompanying notes are an integral part of these financial statements. F-3 HealthDesk Corporation (a Development Stage Company) CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
Deficit Accumulated Total Preferred Stock Common Stock During the Shareholders' ------------------- -------------------- Development Equity Shares Amount Warrants Shares Amount Stage (Deficit) ------ ------ -------- ------ ------ ----------- ------------- Balances at August 28, 1992 (inception)............... ---- ---- ---- ---- ---- ----- ---- Common stock issued for cash on October 1, 1992 at $0.003 per share.......... ---- ---- ---- 960,000 $ 2,480 ---- $ 2,480 Net loss..................... ---- ---- ---- ---- ---- $ (92,744) (92,744) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances at December 31, 1992 ---- ---- ---- 960,000 2,480 (92,744) (90,264) Common stock issued for cash in April and May 1993 at $1.04 per share........... ---- ---- ---- 240,000 250,000 ---- 250,000 Net loss..................... ---- ---- ---- ---- ---- (190,749) (190,749) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances at December 31, 1993 ---- ---- ---- 1,200,000 252,480 (283,493) (31,013) Common stock issued for cash on May 2, 1994 at $1.04 per share..................... ---- ---- ---- 60,000 62,500 ---- 62,500 Net loss..................... ---- ---- ---- ---- ---- (237,022) (237,022) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances at December 31, 1994 ---- ---- ---- 1,260,000 314,980 (520,515) (205,535) Common stock issued in exchange for convertible debt on September 29, 1995 at $1.04 per share........ ---- ---- ---- 768,000 800,000 ---- 800,000 Common stock issued upon exercise of options in June and December 1995 at $1.04 per share................. ---- ----- ----- 102,000 106,250 ---- 106,250 Preferred stock issued for cash in November and December 1995 at $2.08 per share, net of issuance costs of $21,693.......... 939,600 $1,935,807 ---- ---- ---- ---- 1,935,807 Net loss..................... ---- ---- ---- ---- ---- (1,436,473) (1,436,473) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances on December 31, 1995 939,600 1,935,807 ---- 2,130,000 1,221,230 (1,956,988) 1,200,049 Common stock issued upon exercise of options on February 1, 1996 at $1.04 per share................. ---- ---- ---- 120 125 ---- 125 Preferred stock issued for cash in February 1996 at $2.08 per share, net of issuance costs of $2,771.. 120,000 247,229 ---- ---- ---- ---- 247,229 Common Stock issued for cash in October 1996 at $2.25 per share, net of issuance cost of $174,803.......... ---- ---- ---- 400,000 725,197 ---- 725,197 Net loss..................... ---- ---- ---- ---- ---- (4,391,454) (4,391,454) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances at December 31, 1996 1,059,600 2,183,036 ---- 2,530,120 1,946,552 (6,348,442) (2,218,854) Common Stock and Warrants issued in connection with the initial public offering on January 23, 1997 (unaudited)............... ---- ---- $195,500 1,700,000 6,823,101 ---- 7,018,601 Preferred Stock converted to common stock (unaudited).. (1,059,600) (2,183,036) ---- 1,059,600 2,183,036 ---- ---- Convertible notes converted to common stock (unaudited).. ---- ---- ---- 100,000 500,000 ---- 500,000 Issuance of warrants in connection with the initial public offering (unaudited) ---- ---- 187 ---- ---- ---- 187 Common Stock issued upon exercise of options in March at $1.04 and $2.08 per share (unaudited)..... ---- ---- ---- 3,125 4,816 ---- 4,816 Net loss (unaudited)......... ---- ---- ---- ---- ---- (2,282,906) (2,282,906) ----------- ---------- ---------- ------------ ------------ ------------ ------------ Balances on June 30, 1997 (unaudited)............... ---- ----- $195,687 5,392,845 $ 11,457,505 $(8,631,348) $ 3,021,844 =========== ========== ========== ============ ============ ============ ===========
The accompany notes are an integral part of these financial statements. F-4 HealthDesk Corporation (a Development Stage Company) CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30, August 28, 1992 ------------------------- (inception) to 1996 1997 June 30,1997 ---- ---- ------------ Cash flows from operating activities: Net loss....................................... $ (1,725,054) $ (2,282,906) $ (8,631,348) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization................ 99,398 130,166 424,877 Amortization of non cash discount............ ---- 145,023 1,029,250 Other........................................ (7,501) ---- 28,800 Changes in assets and liabilities: (Increase) decrease in prepaid expenses and deferred costs............................ (52,832) 548,816 (92,743) (Increase) decrease in other assets........ 76,300 833 (16,684) Increase (decrease) in accounts payable.... 91,935 (741,032) 116,396 Increase (decrease) in accrued liabilities. 169,914 (100,246) 357,871 ---------------- ------------------- ------------------ Net cash used in operating activities..... (1,347,840) (2,299,346) (6,783,581) ----------------- ------------------- ------------------- Cash flows from investing activities: Additions to property and equipment............ (308,770) (97,557) (1,015,383) ----------------- ------------------- ------------------- Net cash used in investing activities...... (308,770) (97,557) (1,015,383) ----------------- ------------------- ------------------- Cash flows from financing activities: Payments of short-term notes payable........... ---- (2,000,000) (2,000,000) Proceeds of short-term notes payable, net accrued offering costs........................ ---- ---- 970,750 Repayment of convertible notes payable......... ---- ---- (500,000) Proceeds from issuance of convertible notes payable....................................... ---- --- 1,800,000 Proceeds from issuance of common stock and warrants, net of offering costs............... ---- 7,018,788 8,058,965 Net proceeds from issuance of preferred stock.. 235,217 ---- 2,183,036 Proceeds from shareholders' loans.............. ---- ---- 118,164 Repayment of loans from shareholders........... ---- ---- (118,164) Proceeds from the exercise of stock options..... 100,125 4,816 111,191 ---------------- ------------------ ------------------ Net cash provided by financing activities... 335,342 5,023,604 10,623,942 ---------------- ------------------ ------------------ Net increase (decrease) in cash and cash equivalents................................. (1,321,268) 2,626,701 2,824,978 Cash and cash equivalents at beginning of period.. 1,554,034 198,277 ---- ---------------- ------------------ ------------------ Cash and cash equivalents at end of period........ $ 232,766 $ 2,824,978 $ 2,824,978 ================ ================== ==================
The accompany notes are an integral part of these financial statements. F-5 HealthDesk Corporation (a Development Stage Company) NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited) The interim financial data is unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting of all normal recurring adjustments necessary for a fair statement of results for the interim periods. The financial statements included herein have been prepared by the Company 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 included herein are adequate to make the information presented not misleading. Operating results for the six months ended June 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. The organization and the business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company's consolidated financial statements filed as part of the Company's annual report for the fiscal year ended December 31, 1996 on Form 10-KSB. This quarterly report should be read in conjunction with such annual report. For comparability, certain June 30, 1996 amounts have been reclassified where appropriate to conform to the financial statement presentation used at June 30, 1997. 1. Organization and Basis of Presentation: HealthDesk Corporation (the Company), a development stage company, is engaged in designing, developing and marketing HealthDesk(R) OnLine, a healthcare management and information system which enables consumers to take a more active role in their personal and family health. HealthDesk OnLine features easy-to-use Windows-based software designed to develop personal medical records and health management programs and access educational, health related information from the Company's private website and over the Internet. 2. Recently Issued Accounting Pronouncements: In February 1997, Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (FAS 128) was issued and is effective for the Company's year ending December 31, 1997. In March 1997, Statement of Financial Accounting Standards No. 129, "Disclosure of Information About Capital Structure" was issued and is effective for the Company's year ending December 31, 1998. In June 1997, Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and Statement of Financial Accounting Standards No. 131 "Disclosures About Segments of An Enterprise and Related Information" were issued and are also effective for the year ending December 31, 1998. The Company has not determined the impact of the implementation of these pronouncements. 3. Legal Proceedings: The Company is subject to a complaint filed by a former employee with the California Department of Fair Employment & Housing and a second from a former consultant. The claim alleges wrongful termination as a result of alleged denial of reasonable accommodation for a wrist and neck injury. The second complaint alleges that a former consultant is entitled to compensation associated with accelerated vesting of stock options. The Company intends to defend these matters vigorously. There can be no assurance, however, that such matters will be resolved in a manner favorable to the Company. F-6 HealthDesk Corporation (a Development Stage Company) NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited) 4. Initial Public Offering: On January 23, 1997, the Company completed an initial public offering of 1,700,000 shares of Common Stock at $5.00 per share, and 1,700,000 warrants at $0.01 per warrant. Each warrant is exercisable through January 16, 2002 and allows the purchase of one share of common stock at $5.00, subject to adjustment in certain circumstances. In January 1997, the underwriters exercised its option to purchase an additional 255,000 warrants at $0.01 per warrant to cover over-allotments. The Company sold the securities to the underwriters at a discount of 10% from the initial public offering price and paid the underwriters an expense allowance of 3% of the gross proceeds of the public offering. The Company also sold, pursuant to the underwriting agreement, to the underwriters for $187, warrants to purchase up to an aggregate of 170,000 shares of Common Stock, no par value and/or 170,00 warrants to purchase 170,000 Common Shares. After deducting offering expenses, the Company received net proceeds from the offering of $7,018,788. 5. Stock Options: On May 28, 1997, the Company authorized a voluntary stock option repricing program in which 142,400 stock options originally issued with an exercise price of $5.00 per share, were reissued with an exercise price of $3.13 per share, the fair market value of the Company's Common Stock on May 28, 1997. 6. Reclassifications: Reclassifications have been made to the product development, sales and marketing, and general and administrative expenses for the three months and six months ended June 30, 1996 and the three months ended March 31, 1997. These reclassifications had no effect on total costs and expenses or pretax or operating losses for the six months periods ended June 30, 1996 as previously reported. F-7 Exhibit Index Description ----------- 11.1 Statement Regarding computation of earnings per share 27 Financial Data Schedule EX-11 2 EXHIBIT 11. EXHIBIT 11.1 HealthDesk Corporation Computation of Earnings per Share
Three Months Ended June 30, Six Months Ended June 30, ------------------------------- ----------------------------- 1996 1997 1996 1997 ------------- ------------- ----------- ------------- Weighted average number of common shares outstanding .................................. 2,130,119 5,392,845 2,130,099 5,028,279 Shares issuable pursuant to conversion of preferred stock, warrants and stock options issued during the twelve month period prior to the filing of the initial public offering registration statement, less shares assumed repurchased at the offering price of $5.00 per share.......... 1,694,788 ---- 1,694,788 ---- ------------- ------------- ----------- ------------- Total common and common equivalent shares........ 3,824,907 5,392,845 3,824,887 5,028,279 ============= ============= ============= ============= Net Loss......................................... $ (917,200) $ (1,081,264) $ (1,725,054) $ (2,282,906) ============== ============== ============= ============= Loss per common and common equivalent shares $ (0.24) $ (0.20) $ (0.45) $ (0.45) ============== ============== ============== ==============
EX-27 3 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0001023767 HEALTHDESK CORPPORATION 1 U.S. DOLLARS 6-MOS DEC-31-1997 APR-01-1997 JUN-30-1997 2,824,978 0 0 0 0 2,940,567 874,005 130,166 3,492,680 470,836 0 11,457,505 0 0 0 3,492,680 226,043 226,043 0 2,426,945 0 0 14,900 (2,282,506) 400 (2,282,906) 0 0 0 (2,282,906) (.45) 0
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