-----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, VssjYyYVkGwP/GvKQ8TcPvixe4J76hMMYus48424gSesXnkdKZLtyzP6DJ3SdFUD FyFo2KDmI/1DUyhSSxHzow== 0001105944-05-000033.txt : 20050302 0001105944-05-000033.hdr.sgml : 20050302 20050302122020 ACCESSION NUMBER: 0001105944-05-000033 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20050302 DATE AS OF CHANGE: 20050302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERCARE DX INC CENTRAL INDEX KEY: 0001103310 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 954304537 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-31281 FILM NUMBER: 05653067 BUSINESS ADDRESS: STREET 1: 900 WILSHIRE BLVD #500 CITY: LOS ANGELES STATE: CA ZIP: 90017 BUSINESS PHONE: 213-627-8878 MAIL ADDRESS: STREET 1: 900 WILSHIRE BLVD #500 CITY: LOS ANGELES STATE: CA ZIP: 90017 FORMER COMPANY: FORMER CONFORMED NAME: INTERCARE COM DX INC DATE OF NAME CHANGE: 20010514 FORMER COMPANY: FORMER CONFORMED NAME: INTERCARE COM INC DATE OF NAME CHANGE: 20000114 10QSB/A 1 in10qsb0630.txt AMENDED 10QSB-SECOND QUARTER UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB/A ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2004 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ___________ to ____________ COMMISSION FILE NUMBER: 333-57780 INTERCARE DX,INC. ---------------------- (Exact Name of Registrant as Specified in its Charter) CALIFORNIA 95-4304537 ------------------------------- ------------------------ (State of Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 900 WILSHIRE BOULEVARD, SUITE 500, LOS ANGELES, CALIFORNIA 90017 ---------------------------------------------------------------- (Address of Principal Executive Offices) (213) 627-8878 ---------------------------------------------------------------- (Registrant's telephone number, including area code) N/A ---------------------------------------------------------------- (Former name, former address and formal fiscal year, if changed since last report) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and, (2) has been subject to such filing requirements for the past 90 days. Yes ( X ) No ( ) As of June 30, 2004, InterCare DX, Inc., Registrant had 14,293,403 shares of its no par value common stock outstanding with a total market value of $1,000,538 Page 1 of 13 sequentially numbered pages Form 10-QSB Second Quarter 2004 InterCare DX, Inc. INDEX PAGE ---- PART I. FINANCIAL INFORMATION Item 1 Financial Statement Balance Sheets - June 30, 2004 3 Statements of Operations for the six Months ended June 30, 2004 4 Statement of Cash Flows for the Three Months ended June 30, 2004 5 Notes to Financial Statements 6-7 Company Overview 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 15-17 Item 3 Controls and Procedures 17 PART II OTHER INFORMATION Additional Information 18 Signature 18 2 INTERCARE DX, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
As of June 30 December 2004 2003 ====== ====== ASSETS Current assets Cash $ 85 $ 525 Accounts Receivable (Note 1 ) 1,386,350 1,386,350 Less: Allow for Doubtful Accounts 0 0 ---------- --------- Inventories 0 52,211 --------- ------ Total Current Assets.. . . . . . . . . . . . 1,386,435 1,439,086 --------- ------ Property, Plant, and Equipment Net Accumulated Depreciation (Note 1). . . . . . 0 0 Other Assets - Deferred Public Offering Costs - 65,332 ---------- -------- Total Assets 1,386,435 1,504,418 ========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts Payable (Note 1) . . . . . . . . . . 1,622,853 1,540,298 --------- -------- Total Current Liabilities . . . . . . . 1,622,853 1,540,298 --------- -------- Long term liabilities . . . . . .. . . . . 64,888 55,887 --------- -------- Total Liabilities . . . . . . . . . . 1,687,741 1,596,185 --------- -------- Liabilities and Stockholders' Equity Stockholders' Equity Common stock (100,000,000 shares authorized no par value ; 14,293,403 and 13,293,403 shares issued and Outstanding as of June 30, 2004 and December 31, 2003) (Note 2) . . . . . . . . . . .710,078 710,078 Accumulated Deficit (1,011,384) (801,845) ---------- ---------- Total Stockholders' Equity . . . . . . . (301,306) (91,767) ---------- --------- Total Liabilities & Equity. . . . . . . . . . . $ 1,386,435 $1,504,418 ========== =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 3 INTERCARE DX, INC. Consolidated Statement - Unaudited STATEMENT OF OPERATIONS
For three months ended June 30, Six months ended, June 30, 2004 2003 2004 2003 ===== ====== ======= ======== Revenues . . . . . . . . - - $ - $ - Less: Cost of Revenues . - - - - --------- ------- -------- ------- Gross Margin . operating Expense. . . . 165,917 48,289 209,539 141,615 --------- -------- ---------- ---------- Net loss . . (165,917) (48,289) $ (209,539) (141,615) ========== ========= ========== ========== Weighted average number of shares 14,293,403 13,293,403 Weighted average earnings per share $ (0.0) $ (0.0)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4 INTERCARE DX, INC. STATEMENT OF CASH FLOW UNAUDITED
For the Six Months ended June 30, 2004 2003 ==== ==== CASH FLOWS FROM OPERATING ACTIVITIES Net Income (loss). . . . . . . . . . . . . . . $ (209,539) $ (141,615) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation Expense (Increase) Decrease in Accounts receivables . . . . . . . . . . . . . Inventories. . . . . . . . . . . . . . . . . . 52,211 - Prepaid Expenses . . . . . . . . . . . . . . Increase(Decrease) in Accounts Payables. . . . . . . . . . . . . . . 82,555 142,800 -------- -------- NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . (74,773) 1,185 CASH FLOW FROM INVESTING ACTIVITIES Deferred Public Offering . . . . . . . . . . . 65,332 - Acquisition of Fixed Assets. . . . . . . . . . --------- --------- NET CASH USED IN INVESTING ACTIVITES . . . . . . . . 65,332 - CASH FLOW FROM FINANCING ACTIVITIES Loan From MH . . . . . . . . . . . . . . . . Repayment of debt . . . . . . . . . . . . . . . 9,001 (3,612) Proceeds from long term debt. . . . . . . . . . -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . 9,001 (3,612) Increase (Decrease) in cash . . . . . . . . . . (440) (2,427) CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 525 2,930 ----------- ---------- CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ 85 $ 503 =========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 5 Notes to the Financial Statements InterCare DX, Inc. Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES InterCare DX, Inc., is an innovative software products development and services company, specializing in developing healthcare management and information systems solutions. The company markets and resells the InterCare Clinical Explorer (ICE(tm), which is designed to integrate every aspect of the healthcare enterprise. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Account Receivable The Company recognizes account receivable to the extent that revenues have been earned, and collections are reasonably assured. Inventory Inventories consists of purchased computer and software products, stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method of valuation. Property and Equipment Property and equipment is recorded at cost. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments are capitalized. When items of property are sold or retired, the related cost and accumulated depreciation is removed from the accounts and any resultant gain or loss is included in the results of operation. Capital assets are depreciated by the straight-line method over estimated useful lives of the related assets, normally five (5) to seven (7) years. Property and equipment consists of the following as of June 30, 2004 and 2003:
2004 2003 ===== ===== Computer Hardware & Software $68,264 $68,264 Less: Accumulated Depreciation (68,264) (68,264) ------- ------- $ - $ - ======== =======
Advertising The company has the policy of expensing advertising costs as incurred Stock-based Compensation Non Employee Stock-based compensation plans are recorded at fair value measurement criteria as described in SFAS 123, "Accounting for Stock-Based Compensation", and EITF 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services" 6 Employee Stock-based compensation plans are accounted for, using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock issued to Employees". Under this method, compensation cost is recognized based on the excess of the fair value at the grant dates for awards under those plans, as determined by the Company's officers and directors. Recognition of Revenues. Revenues from sale of software are recorded upon delivery and installation of software at customer sites. The company provides a limited amount of post-contract customer support (PCS) at no additional charge Pursuant to SOP 97-2, the value of the PCS component of any sale is estimated based on vendor specific evidence of fair value (i.e. catalogue price). Revenues in respect of the value of the PCS, are recognized as earned ratably over the PCS period (generally 90 days). Professional services are billed on either an hourly rate or flat rate basis, and revenues recognized ratably over the service period, or upon completion of related services. Reimbursable expenses incurred on behalf of the customer are billed to the customer, and credited against the applicable expense. The customer has the option to purchase an implementation and maintenance contracts from the Company. Revenues from implementation services contracts are deferred and recognized as earned as services are performed in contracts with hourly billing terms; and as related services are performed or expiration of the terms of the contract in flat rate contracts. Software Development Cost Software development costs are charged to current operations Fair Value of Financial Instruments and Concentration of Credit Risk. The carrying amounts of cash, receivables, prepaid banner advertisements fees by Meridian Holdings, Inc. (affiliated company), accounts payables and accrued liabilities approximates fair value because of the immediate or short-term maturity of these financial instruments. Basic and Diluted Net Loss Per Common Share. In accordance with SFAS No. 128, "Computation of Earnings Per Share," basic Earnings/(loss) per share is computed by dividing the net earnings available to Common stockholders for the period by the weighted average number of common shares outstanding during the period. For purposes of computing the weighted average number of shares, all stock issued with regards to the founding of the Company is considered to be "cheap stock" as defined in SEC Staff Accounting Bulletin 4D and is therefore counted as outstanding for the entire period. Common equivalent shares, consisting of incremental common shares issuable upon the exercise of stock options and warrants are excluded from diluted earnings per share calculation if their effect is anti-dilutive. NOTE 2. RECENT EVENTS On May 1, 2004 the Company issued a private placement memorandum to raise up to $750,000. This offering is still on going. The use of proceed is for product release and other corporate purposes. 7 InterCare DX, Inc. Business Overview InterCare DX, Inc. formerly known as InterCare.com dx,, is organized in the State of California. We are an innovative software products and services company specializing in providing healthcare management and information systems solutions, with our main office located at 900 Wilshire Blvd., Suite 500, Los Angeles, California, USA, and international partners located worldwide. In business since 1991, we have created, published, and marketed software products embedded with sound, text and video for the purpose of relaxation training and stress management. We have also developed Internet-ready applications for healthcare transactions management as well as medical and health-related content and information targeted toward the education, consumer, and healthcare industry markets. Our Products and Services InterCare Clinical Explorer (ICE ), is the latest product developed by InterCare DX, Inc., an innovative enterprise level clinical documentation application designed to integrate virtually all aspects of the health care enterprise, both inpatient and outpatient. ICE(tm)'s extensive, scalable system flexibility allows its adaptation to clinical workflow, operating independently in centralized and decentralized facilities. The program features intuitive order entry, "tapering" orders, a clinical knowledge base, digital video enhanced patient education, real-time electro-physiological data capture and display, voice command and recognition, a digital dictation module, and numerous other capabilities to complement and document the diagnostic and treatment processes, including unlimited free-text notes. We have signed partnership and/or reseller agreements in place to utilize, or have plans to incorporate the following third-party products and/or technology into ICE(tm) : The strength of ICE application is derived from differentiated core technologies consisting of: Mainstream SQL Database with full open architecture; human anatomy and graphical user interfaces that simplify documentation and information access; data mining and data query tools; end-user tool sets; and interface capabilities to facilitate peaceful coexistence with other systems. Benefits of ICE(tm) Products to Healthcare Payors and Providers include: Point of Care Documentation Applications enabling all care providers (e.g. physicians, nurses, PA's, technologists, therapists, dieticians, etc.) to document objective and subjective patient data at the point-of-care in a manner that enhances compliance, reduces time, enhances communications, controls resource utilization and enhances revenue generation. Order entry and results reporting Simplified multi-disciplinary communication of orders, referrals, consultations, notes and retrieval of results including Laboratory, Radiology, Pharmacy, Respiratory Therapy, Dietary, Physiotherapy, Nursing and the like. Imaging and general archiving On-line viewing, manipulation and annotation of digital images and documents such as X-rays, CAT Scans, MRIs, Ultrasounds, digitized images, scanned paper documents, etc. This is particularly important in emergency and urgent care settings where speed and provider viewing and interpretation is needed to enhance care delivery. This is the foundation for an integrated healthcare delivery system, using both Local and Wide area networks. 8 Multi-disciplinary Clinical decision support Provision of advanced clinical functionality including protocols, pathways, care standards and templates that facilitate care management, resources control and outcome management. Clinical workflow and productivity management Personal desktop that organizes individual user tasks, simplifies follow up and documentation requirements, improves workflow, facilitates quality assurance and management intervention in order to make better use of time. Care provider communication management On-line, simplified message routing and communication that interfaces to e-mail, voice mail and like systems to enhance coordination and follow up among care providers. Central Data Repository Aggregation of all patient-centric data in the enterprise from all legacy and newer information systems, including Registration, ADT, lab, radiology, pharmacy PACS, departmental systems and ICE(tm). Medical knowledge base / lexicon ICE Clinical Observation Language (ICOL(tm)) - -------------------------------------------- There is no single published or accepted language that comprehensively and logically describes the discrete facts about a patient's clinical condition that can be used scientifically to create a standardized methodology for analyzing a myriad of clinical observations, interventions and outcome in medicine, hence the development of ICE Clinical Observation Language vocabulary (ICOL). The unique feature of ICOL is that it is made up of short phrases that could be plugged-in to a note without any modification, or joined with other phrases in the ICOL knowledge base to form a complete sentence. Developed by the InterCare team of clinical experts, ICOL contains over 50,000 phrases and clinical terminology which are linked to over 200,000 clinical terms and codes that could be customized or used as-is to generate a research-quality outcome measures without compromising the quality of clinical documentation and patient care. ICE Clinical Observation Language (ICOL) provides the corroborating 'glue' that ties together the outcomes, diagnoses, interventions, procedures, activities and patient responses to care delivery into the complete scientific, granular, and comparable clinical content. When a significant number of patient encounters are recorded using the same clinical vocabulary, the value of the resulting clinical information is profound. Use of this data will facilitate unprecedented and rapid improvement in the consistency and quality of care delivery for an individual patient. This capability will be facilitated by the ability to accurately and consistently measure and improve patient outcomes in response to care rendered while at the same time reducing the cost. ICE(tm) clinical documentation provides the necessary granularity and consistency in the recording of patient health observations required for this process to work. Summary of the languages implemented and supported in ICE(tm) are: - - International Classification of Diseases (ICD-9-CM) - - Alternative Complementary Therapy Code (ABC code) - - CPT - - Nursing Interventions Classification (NIC) - - Nursing Outcome Classification (NOC) - - NANDA - - ICE Clinical Observation Language (ICOL(tm)) 9 - - DSM-IV - - Other Third party clinical libraries We are currently reviewing language from SNOMED and are evaluating inclusion of language from LOINC, the Read Codes, and other UMLS component languages Patient Care Plans - -------------------- The ICE system incorporates a vast vocabulary of standardized languages to facilitate the Patient Care Planning process. An unlimited number of Care Plan Templates can be created for retrieval to establish an individual Patient Care Plan. The Patient Care Plan can then be personalized as required. Languages available for Diagnoses, Procedures and Interventions, Activities, and Outcomes in ICE Care Plans include ICOL , ICD-9, CPT, NANDA, NIC, NOC etc. User customizable labels can also be added as required, via the knowledge base set-up module. Patient Outcome Management - ---------------------------- "Outcome" is probably one of the most widely used and most poorly defined terms in health care today. In most cases the term is used generically and subjectively to describe the results of patient care. Unfortunately the current measurement system is inconsistent and at much too high a level to facilitate clear comparative measures that will result in better patient care. Outcomes in ICE are not only an underlying basis for managing the goals and results of care delivery, they are scientifically measured. This unique capability is made possible through the use of ICE Clinical Observation Language combined with comprehensively researched and published outcome languages such as (NOC). ICE collects and aggregates data with complete confidentiality for all concerned, via the Clinical Knowledge Base. Using proprietary database design techniques, ICE creates a dynamic linkage between confidential patient data and the Clinical Knowledge Base. Management Guidelines and Regulatory Compliance - --------------------------------------------------- ICE conforms to the standards for clinical documentation. Any organization using ICE increases their ability to comply with regulations applicable to comprehensive clinical documentation for patient assessment, care coordination, outcome achievement, and quality improvement. The DRG system implementation in hospitals reduced care costs for a few years. Hospital costs are increasing again with little data available to document improvement in outcomes. To prevent similar trends in the future, the Center for Medicare and Medicaid Services (CMS) has already implemented cost reduction and quality improvement requirements simultaneously to protect patient outcomes in certain care delivery settings. This approach, which includes fixed reimbursement for specific patient conditions and which requires outcome reporting to electronically accompany all claims submitted for payment, is the blueprint for the future in all health care settings. Legal Liability/Mal-practice Insurance Companies Providers face many forms of legal liability, with focus in four major areas: - - Complete and accurate clinical documentation - - Providing the care for which they are billing - - Delivering care that is appropriate to the patient's condition - - Managing the balance between professional responsibility and payer limitations. The most critical success factor in all areas of liability is accurate, complete and retrievable clinical documentation. Providers must be able to produce such clinical documentation or face serious consequences. The documentation must 10 demonstrate that the patient's condition was thoroughly assessed, that the problems being treated were clearly identified, that the care plan specifically addressed those problems, and that the patient's status was continually evaluated. HIPAA further requires that, upon request, the patient must be provided with a legible, complete and understandable copy of their medical record. ICE can help clinicians and other Healthcare providers limit their liability and avoid legal sanctions that potentially could result from poor clinical documentation and incomplete medical records. Bi-directional legacy integration middleware Data exchange in real-time between ICE(tm) and legacy systems to facilitate data merging, data normalization and information consolidation. Real-time Electrophysiological and Clinical Data Acquisition InterCare has obtained a developers license from QRS Diagnostics, inc., to integrate their Medic Software application into ICE(tm), thus making it possible to add such medical diagnostic data as ECG, Temperature, Weight Spirometry and Pulse-oximetry into ICE(tm) database real-time. Data discovery, mining and analysis Suite of ad-hoc, programming free tools, enabling novice users experimental "cruising" of all enterprise data in real-time. InterCare's ICE(tm) software operates over a customizable and highly adaptable operating environment. ICE(tm) is designed to concurrently serve all care providers throughout the continuum-of-care from acute and long-term care to ambulatory and home health care: - - The various medical professions (i.e. physician, nurse, therapists, technologists, dietician, etc.) - - The various medical specialties (i.e. Primary care, OB/Gyn, Pediatrics, Surgery, etc.) - - The various facility types (i.e. acute care, ambulatory care, long term care and home care) ICE(tm) can seamlessly integrate with legacy systems (utilizing any off- the- shelf interface engine) through both HL7 and proprietary legacy interfaces. A 12-tier security paradigm offers industry leading confidentiality and control of information. Security "behavior" rules are fully configurable by privileged system administrator(s), without programming, through the underlying knowledge bases. ICE(tm)'s embedded security will be fully HIPAA (Health Insurance Portability and Accountability Act of 1996 ) compliant when the final rulings are released, and supports data compartmentalization down to the level of specific value in any data field. Industry Trend On July 1, 2003 Department of Health & Human Services Secretary Tommy Thompson announced at the National Healthcare Informatics Infrastructure meeting in Washington, DC, that, under a contract signed by the College of Pathologists and the National Library of Medicine, SNOMED will now be available at no charge to those within the United States. On December 10, 2003, in Great Britain, the British National Health Service (NHS) announced that is awarded contracts to various health information system vendors to facilitate the design and implementation of a bold plan that will ensure that patients will have their own individual electronic health care record in the NHS by 2010. Electronic files will ensure that all relevant information on patients will be accessible anywhere in the NHS when treatment is being given. Health professionals will have fast access to the patient's full 11 medical history, significantly reducing the risk of mistakes. To date, the NHS has awarded the following contracts:
Recent Contracts Awarded for Electronic Health Records in UK Company Contract Amount (Pounds) British Telecom A 10-year contract set up and run the Care 620,000,000 Records Service which will link more than 30,000 GPs and 270 acute, community and mental health trusts into a single, secure national system British Telecom 10-year contract as local service provider 996,000,000 to link the London area NHS trust to the national system Accenture 10-year contract as local service provider 1933,000,000 to link the North East and Eastern regions NHS trusts to the national system. Computer Sciences Corp. 10-year contract as local service provider 973,000,000 to link the North West and West Midlands regions NHS trusts to the national system.
The US Initiative According to an October 2003 report on entitled, "Information Technology - Benefits Realized for Selected Healthcare Functions," the United States Government Accounting Office reported 13 examples of cost savings resulting from the use of IT, including reduction of costs associated with medication errors, communication and documentation of clinical care and test results, staffing and paper storage, and processing of information. Other benefits included improved quality of care, more accurate and complete medical documentation, more accurate capture of codes and charges, and improved communications among providers that enabled them to respond more quickly to patients' needs. They also reported examples of reduced costs and other benefits resulting from improvements in electronic claims processing and the use of technology to enhance customer service. Benefits included increased staff productivity, improved timeliness in processing claims, improved customer satisfaction, and improved clinical care to members. The Bush Administration's health care agenda has outlined a comprehensive vision for helping all Americans benefit from the potential of American health care in the 21st century. The President's health care agenda is designed to improve the accessibility, affordability and accountability of health care for every American -- and to make sure that American health care keeps getting better. ICE is positioned to facilitate many aspects of the Bush Administration's health care initiatives. OUR COMPETITION InterCare DX, Inc., participates in a large and growing marketplace domestically and internationally. The US healthcare information systems and services market currently represents a $20 billion annual market. Electronic Medical Record (EMR), CDR and clinical systems, being a part of an emerging arena, are accountable for $2 US Billion of this sum Clinical systems' market volume is expected to accelerate its growth because of the recent HIPAA regulations requirements. The most pro-active e-health players are Eclypsis, Cerner, GE Medical,IDX and McKesson-HBOC. yet, each of these players has thousands of existing customers operationally using its legacy systems. Thus, their e-health transition strategy is slow both technically and business wise. 12 Mergers or consolidations among our competitors, or acquisitions of small competitors by larger companies, would make such combined entities more formidable competitors to us. Large companies may have advantages over us because of their longer operating histories, greater name recognition, or greater financial, technical and marketing resources. As a result, they may be able to adapt more quickly to new or emerging technologies and changes in customer requirements. They can also devote greater resources to the promotion and sale of their products or services than we can. For the above reasons, we may not be able to compete successfully against our current and future competitors. Increased competition may result in reduced gross margins and loss of market share. OUR COMPETITIVE ADVANTAGE - OUR KNOWLEDGEABLE AND GROWING SALES FORCE AND TECHNICAL STAFF. We will be making sure that the sales force is trained on the "high-end" networking elements in which we deal so they will be able to service the needs of their customers. - OUR BUSINESS MODEL COST, EFFICIENCY AND FLEXIBILITY. We have addressed the largest cost factor in the methodology for deploying our services through an outsourcing strategy rather than a building the human resources from the scratch strategy. This keeps start-up costs as low as possible. - OUR STRATEGIC PARTNER STRENGTH. Partnerships with CGI Communications Services, Inc., our parent company Meridian Holdings, Inc., Meganet Corporation, Sager Midern Coputers., Acer America Corporation, ViewSonic Corporation, Microsoft Corporation, Tech Data Corporation, and QRS Diagnostics, Inc., will give us the ability to deliver our software products faster and at a lower cost than the competition - INTEGRATION. We can seamlessly integrate all of the different technological solutions and custom applications development. We use different strategic partners to tailor the optimum solution for our customer. - AUTOMATION AND ADVANCED TELECOMMUNICATIONS TECHNOLOGY. Our Network Management tools are automated which leads to less downtime, and lower labor costs. We use the latest equipment, work closely with strategic partners that are forerunners in their fields, and are not hampered by existing legacy infrastructures. - OUR CUSTOMIZED CUSTOMER APPROACH. We emphasize direct relationships with our customers. These relationships enable us to learn information from our customers about their needs and preferences and help us expand our service offerings to include additional value-added services based on customer demand. We believe that these customer relationships increase customer loyalty and reduce turnover. In addition, our existing customers have provided customer referrals and we believe strong relationships will result in customer referrals in the future. Our success depends upon careful planning and the selection of partners. We can meet the customer's needs more efficiently with entrenched procedures. This enables us to excel at customer service. 13 Our Product Features and Benefits ICE(tm) incorporates a wide variety of capabilities and functionality, which differentiate it from other generally available Electronic Medical Record, Central Database Repository (EMR/CDR) software programs in the global Healthcare Information Technology (IT) market. The most significant differentiators are: Fully integrated Software Program ICE(tm) is not an aggregation of unrelated and disintegrated legacy products acquired through M&As. ICE(tm) is designed and developed as a fully integrated suite of products, which utilize an identical graphic user interface on top of a scaleable and highly adaptable component architecture. Thus, each of the variety of ICE(tm) products is inherently integrated (data model and business rules alike) with the other products, and the underlying CDR/MKB. Human anatomy image annotation and embedding, point-and-click data entry Three-dimensional (3D) MKB (Medical Knowledge Base) navigation utilizing gender-sensitive, human anatomy drawings. Presentation of lifetime medical history data over a single full-body drawing. Automatic generation of all progress notes and forms from the graphical queues entered by the end user on top of human anatomy drawings as well as annotation of an embedded image referenced in the body of the document. Customizable, component-based architecture Multi-tier, common enterprise architecture for all ICE(tm) products Multi-threaded engines & components. Automatic and manual load balancing & distribution through multiple engines utilizing entry level PC hardware. Knowledge driven applications Knowledge base driven clinical workstation applications. Most of the applications' "behavior" (e.g. business rules) is derived from the underlying database(s), which is fully customizable without the need for programming by the novice end user. This also includes extended support for visually "painting" (e.g. designing) additional input & output screens, inclusive of its business rules. Repository, data warehouse and datamart unification While ICE(tm) master central data repository engine(s) will serve the multitude of concurrent enterprise users, its live backup(s) simultaneously will serve as data warehouse and datamart for ad-hoc data discovery, mining and analysis in real-time. Third-party legacy integration Seamless bi-directional integration with ancillary, administrative and financial legacy systems. Concurrent support for both HL7 and proprietary legacy messaging. Plug-and-play legacy interface(s) addition and/or modification. Immediate value and ROI to the enterprise by integration of legacy systems only into the ICE(Tm) CDR prior to any ICE(Tm) application implementation. Properties The Company's corporate offices are located at 900 Wilshire Boulevard, Suite 500, Los Angeles, California 90017. The Company is sharing an office space with Meridian Holdings, Inc., an affiliated Company, whereby the Company is required to pay 1/5 of the monthly rent of $5128.00. Other property and equipment are stated at cost. Acquisitions having a useful life in excess of one (1) year are capitalized. Repairs and maintenance are expensed in the year incurred. Capital 14 assets are depreciated by the straight-line method over estimated useful lives of the related assets. Legal Proceedings The Company knows of no litigation pending, threatened or contemplated, or unsatisfied judgments against it, or any proceedings in which the Company is a party. The Company knows of no legal actions pending or threatened or judgment entered against any officer or director of the Company in his capacity as such. There has been to date no petition under the bankruptcy act or any state insolvency law filed by or against the Company or its officers, directors or other key personnel. RISKS ASSOCIATED WITH MANAGING GROWTH The Company's anticipated level of growth, should it occur, will challenge the Company's management and its sales and marketing, customer support, research and development and finance and administrative operations. The Company's future performance will depend in part on its ability to manage any such growth, should it occur, and to adapt its operational and financial control systems, if necessary, to respond to changes resulting from any such growth. There can be no assurance that the Company will be able to successfully manage any future growth or to adapt its systems to manage such growth, if any, and its failure to do so would have a material adverse effect on the Company's business, financial condition and results of operations. MARKET FOR COMMON STOCK The Company's Common Stock is traded on the Bulletin Board maintained by the National Association of Securities Dealers, Inc. under the symbol "ICCO." The price range of the Company's Common Stock has varied significantly in the past months ranging from a high bid of $.35 and a low bid of $0.03 per share. The above prices represent inter-dealer quotations without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions. SELECTED FINANCIAL DATA The Company had net negative working capital of $236,418 as at June 30, 2004 compared to net negative working capital of $36,972 during the comparable period in 2003. The decrease in working capital was due management decision to write-off expired inventory and deferred offering cost during the reporting period The Company is currently able to meet its financial obligations through debt financial support from Meridian Holdings, Inc., an affiliated company. The selected financial data set forth above should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements notes thereto. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our financial statements and notes, as well as the other information included elsewhere in this prospectus. Our discussion contains forward-looking statements that involve risks and uncertainties, including those referring to the period of time the Company's existing capital resources will meet the Company's future capital needs, the Company's future operating results, the market acceptance of the services of the Company, the Company's efforts to establish and the development of new services, and the Company's planned investment in the marketing of its current services and research and development with regard to future endeavors. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including domestic and global economic patterns and trends. 15 LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY Long-term cash requirements, other than normal operating expenses, are anticipated for the continued development of the Company's business plans. The Company will need to raise additional funds from investors in order to complete these business plans. If we need additional capital to fund our operations, there can be no assurance that such additional capital can be obtained or, if obtained, that it will be on terms acceptable to us. The incurring or assumption of additional indebtedness could result in the issuance of additional equity and/or debt which could have a dilutive effect on current shareholders and a significant impact on our operations. RESULTS OF OPERATIONS We have experienced, and expect to continue to experience, seasonality in our license revenues and results of operations, with a disproportionately greater amount of our license revenues for any fiscal year being recognized in our fourth fiscal quarter. In some cases, the products will be sold on a consignment basis, in which case, we only get paid by the vendor after the vendor sells the product. Furthermore, our quarterly revenues could be significantly affected based on how applicable accounting standards are amended or interpreted over time. Due to these and other factors, we believe that period-to-period comparisons of our results of operations are not meaningful and should not be relied upon as indicators of our future performance. It is possible that in some future periods our results of operations may be below the expectations of public market analysts and investors. If this occurs, the price of our common stock may decline. REVENUES There was no revenue generated for the quarter ended June 30, 2004 and 2003 respectively, since the company has been in the testing and debugging mode of the ICE(tm) software. COST OF REVENUES There was no cost of revenue generated during this period. SALES AND MARKETING The registrant is focusing all its resources in research and development of the next generation of software applications and utility tools for the healthcare industry, as a result no sales or marketing expenses were incurred during the three month period ended June 30, 2004. GENERAL AND ADMINISTRATIVE General and administrative expenses for the three months ended June 2004 was $ 165,917 as against $48,289 for the comparable period June 2003. Of the $165,917 expense incurred for the three months ended June 2004, $38,823 was for employee payroll and $2,700 was for office rent and utilities, and the rest was due to the write-off of expired inventory and deferred public offering cost. For the six months ended June 30, 2004, General administrative expense was $209,539 as against $141,615 for the comparable period June 30, 2003. The increase in General and administrative expense was the result of managements' decision to expense out expired inventory and deferred public offering cost. The Company anticipates future increases in general and administrative expenses as it embarks on aggressive product development, sales and marketing. 16 OPERATING LOSS As a result of the factors described above, Company expects further increases in operating expenses for the remainder of the year 2004, assuming additional funding is raised from investors to be used in financing future operating costs. There is no guarantee that the Company will be able to raise additional funds to finance all the anticipated operating costs. In absence of such funds being available, the Company may not be able to operate, and this could have a material impact in the overall execution of the Company's business plan. Net(Loss)/ Income The Company had a net loss of $ 165,917 for three months ended June 30, 2004, compared with a net loss of $48,289 in the comparable period in 2003. For the six months ended June 30, 2004 the Company sustained net loss of $209,539 as against $ 141,615 for the comparable period in June 30, 2003. The increase in net loss was the result of managements' decision to expense out expired inventory and deferred public offering cost. PLAN OF OPERATIONS The Company is also planning to embark on an advertisement campaign over the next several months in news media, consumer and healthcare journals of all its products and services. There is no assurance that such advertisement campaign will yield any dividend. On June 24, 2004 the registrant announced that it has entered into a Strategic Alliance Partnership Agreement with Scantron Service Group, a division of Scantron Corporation, a wholly owned subsidiary of John H. Harland Company (NYSE:JH) Under the terms of this agreement, Scantron Service Group will provide to prospective InterCare DX, customers, such services as on-site installation of computer hardware, maintenance, support, and network installation. Each party will cooperatively market and co-brand the products and services that are subject to this agreement to appropriate prospective customers. Recent Events. On June 1, 2004, Mr. Russ Lyon resigned as the Chief Technology Officer of the registrant, but still remains as a member of the board of directors until his successor is appointed and qualified according to the company's bye-laws. Item 3. Controls and Procedures Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act" ), the Company carried out an evaluation under the Supervision and with the participation of the Company's management, including the Chief Executive Officer and President and the Principal Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as of September 30, 2004. In designing and evaluating the Company's disclosure controls and procedures, the Company and its management recognize that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, the Company's management was required to apply its reasonable judgment. Based upon the required evaluation, the Management concluded that as of June 30, 2004, the Company's disclosure controls and procedures were effective (at the "reasonable assurance" level mentioned above) to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. 17 From time to time, the Company and its management have conducted and will continue to conduct further reviews and, from time to time put in place additional documentation, of the Company's disclosure controls and procedures, as well as its internal control over financial reporting. The Company may from time to time make changes aimed at enhancing their effectiveness, as well as changes aimed at ensuring that the Company's systems evolve with, and meet the needs of, the Company's business. These changes may include changes necessary or desirable to address recommendations of the Company's management, its counsel and/or its independent auditors, including any recommendations of its independent auditors arising out of their audits and reviews of the Company's financial statements. These changes may include changes to the Company's own systems, as well as to the systems of businesses that the Company has acquired or that the Company may acquire in the future and will, if made, be intended to enhance the effectiveness of the Company's controls and procedures. The Company is also continually striving to improve its management and operational efficiency and the Company expects that its efforts in that regard will from time to time directly or indirectly affect the Company's disclosure controls and procedures, as well as the Company's internal control over financial reporting. Changes in Internal Control Over Financial Reporting There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. PART II - OTHER INFORMATION None SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. InterCare DX, INC. DATE: February 25, 2005 By: /s/ Anthony C. Dike ------------------- Anthony C. Dike, MD Chairman/CEO 18 EX-31 2 exhibit31.txt EXHIBIT 31.1 EXHIBIT 31.1 I, Anthony C. Dike, certify that: 1. I have reviewed this quarterly report on Form 10QSB/A of InterCare DX, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 25, 2005 By:_/s/ Anthony C. Dike - -------------------------- Anthony C. Dike Chairman and CEO (Principal Executive Officer) EX-32 3 exhibit32.txt EXHIBIT 32.1 Exhibit 32.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of InterCare DX, Inc. (the "Company") on Form 10-QSB/A for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Anthony C. Dike, the Chief Executive Officer, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to InterCare DX, Inc., and will be retained by InterCare DX, Inc.., and furnished to the Securities and Exchange Commission or its staff upon request. DATE: February 25, 2005 By: /s/ Anthony C. Dike ------------------- Anthony C. Dike Chairman and CEO -----END PRIVACY-ENHANCED MESSAGE-----