10QSB 1 int10qsb3312001.txt INTERCARE.COM-DX, INC. 10QSB FOR 3/31/2001 UNITED STATES 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 March 31, 2001 ( ) 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.COM-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 March 31, 2001, InterCare.com-dx, Inc., Registrant had 12,230,902 shares of its no par value common stock outstanding. There is currently no public market for this stock. Page 1 of 12 sequentially numbered pages Form 10-QSB First Quarter 2001 Intercare.com-dx, Inc. INDEX PAGE ---- PART I. FINANCIAL INFORMATION Independent Accountant's Report 2 Balance Sheets - March 31, 2001 3 Statements of Operations for the Three Months Ended March 31, 2001 4 Statement of Cash Flows for the Three Months Ended March 31, 2001 5 Notes to Financial Statements 6-7 Company Overview 9 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II OTHER INFORMATION Additional Information 13 Signature 13 1 INTERCARE.COM-DX, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
Balance Sheet As At March 31 2001 2000 ====== ====== ASSETS Current assets Cash $ 6,193 $ 828 Accounts Receivable (Note 2 ) 1,385,850 - Less: Allow for Doubtful Accounts 0 - Inventories 52,211 83,339 Prepaid Expenses 0 11,770 --------- ------ Total Current Assets.. . . . . . . . . . . . . . . . 1,444,254 95,867 ========= ====== Property, Plant, and Equipment Net Accumulated Depreciation (Note 6). . . . . . 9,070 253 Other Assets Deferred Public Offering Costs 34,836 - ---------- -------- Total Assets 1,488,160 96,120 ========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts Payable (Note 2) . . . . . . . . . . . . . 1,097,769 0 --------- -------- Total Current Liabilities . . . . . . . 1,097,769 0 --------- -------- Long term liabilities . . . . . .. . . . . 0 0 --------- -------- Total Liabilities . . . . . . . . . . . 1,097,769 0 ========= ======== Liabilities and Stockholders' Equity Stockholders' Equity Common stock (100,000,000 shares authorized no par value ; 12,230,902 shares issued and Outstanding) (Note 2) . . . . . . . . . . . . . 650,628 650,628 Accumulated Deficit (260,237) (554,508) ---------- ---------- Total Stockholders' Equity . . . . . . . 390,391 96,120 ---------- --------- Total Liabilities & Equity. . . . . . . . . . . . $ 1,488,160 $ 96,120 ========== =========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 2 INTERCARE.COM-DX, INC. Consolidated Statement - Unaudited STATEMENT OF OPERATIONS
For the Three Months ended March 31, 2001 2000 ====== ===== Revenues . . . . . . . . $ 334,199 $ 0 Less: Cost of Revenues . (126,897) 0 --------- ------- Gross Margin . 207,302 0 Operating Expense. . . . 280,082 36 Other Income and Expense 0 1 ---------- -------- Net Income . . $ (72,780) $ (35 ========= ======== Weighted average number of shares 12,230,902 11,000,000 Weighted average earnings per share $ (0.006) $ (0.000)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 3 INTERCARE.COM-DX, INC. STATEMENT OF CASH FLOW UNAUDITED
For the Three Months ended March 31, 2001 2000 ==== ==== CASH FLOWS FROM OPERATING ACTIVITIES Net Income (loss). . . . . . . . . . . . . . . $ (72,780) $ (35) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation Expense 881 - (Increase) Decrease in Accounts receivables . . . . . . . . . . . . . 4,334 - Inventories. . . . . . . . . . . . . . . . . . 14,460 - Prepaid Expenses . . . . . . . . . . . . . . . Increase(Decrease) in Accounts Payables. . . . . . . . . . . . . . . 78,479 - -------- -------- NETCASH USED IN OPERATING ACTIVITIES . . . . . . . . 25,374 (35) CASH FLOW FROM INVESTING ACTIVITIES Acquisition of Fixed Assets. . . . . . . . . . (306) - --------- --------- NET CASH USED IN INVESTING ACTIVITES . . . . . . . . ( 306) 0 CASH FLOW FROM FINANCING ACTIVITIES Proceeds from sale of stock . . . . . . . . . . - - Repayment of debt . . . . . . . . . . . . . . . (21,836) Proceeds from long term debt. . . . . . . . . . - - -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES. . . . . . (21,836) 0 Increase (Decrease) in cash . . . . . . . . . . 3,232 (35) CASH AT BEGINNING OF PERIOD. . . . . . . . . . . . . 2,961 864 ----------- ---------- CASH AT END OF PERIOD. . . . . . . . . . . . . . . . $ 6,193 $ 829 =========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 4 The accompanying notes are an integral part of this statement. InterCare.com-dx, Inc. Notes to the Financial Statements Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES InterCare.com-dx, Inc. formerly known as Inter-Care Diagnostics, Inc., is organized in the State of California to pursue bio-medical software development, as well as Internet based healthcare transactions, contents and programs development. The Company was originally incorporated in 1991 for the purpose of operating a medical diagnostics laboratory and engaging in various medical services to clients. On January 17, 1994, a 6.8 magnitude earthquake centered in Northridge, California caused wide spread damage to commercial and residential structures, and to major freeways, causing business interruptions and disrupting the normal flow of traffic. The Company experienced irreversible damage to all its high-tech computers and diagnostic equipment. Since that time, the Company has been devoting substantially all its efforts to establishing a new business entity that develops software for the healthcare industry and other related activities over the Internet. On September 27, 1999, the Company, announced that it has executed an Electronic Commerce Agreement with Netsales, Inc., in which Netsales will distribute InterCare's software programs through more than 140,000 loyal reseller customers in 130 countries of Ingram Micro, the largest provider of computer technology products and services in the world. The Company had entered into similar agreement earlier, with DigitalRiver, Inc., in which DigitalRiver will market the Company's software program through major retailers such as CompUSA, Wal-Mart, and other Internet software resellers. On June 30, 2000, the Company signed a master value added reseller agreement with Meridian Holdings, Inc., an affiliated company, to sell and support the MedMaster suite of software technology. Significant terms of this agreement are that Intercare will sell, support, implement the MedMaster Suite of software programs, in exchange for 40% of net sales proceeds, and 60% of recurrent revenue from software support and implementation. InterCare as a value-added reseller, develops, markets, provides professional services and supports for the MedMaster' - a clinically-focused, multi-disciplinary enterprise solution targeting a variety of large-scale healthcare organizations. These include: Integrated Healthcare Delivery Networks (IHDNs), hospitals, HMOs and large clinics. 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. 5 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 March 31, 2001 and 2000:
2000 1999 ===== ===== Computer Hardware & Software $68,770 $56,967 Less: Accumulated Depreciation 59,700 56,714 ------- ------- $ 9,070 $ 253 ======== =======
Advertising The company has the policy of expensing advertising costs as incurred. There were no advertising costs charged to expense for the quarter ended march 31, 2001. 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" 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). 6 The company provides software implementation and professional services for all its enterprise software sold to its clients on a contractual basis. 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 services 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. The customer has the option to purchase a maintenance contract from the Company. Revenues from maintenance component are deferred and brought recognized income ratably over the maintenance service period. Currently, there are no such contracts in existence. The Company's proposed maintenance charges as based on vendor specific evidence of fair value. 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., an affiliate, accounts payables and accrued liabilities approximates fair value because of the immediate or short-term maturity of these financial instruments. Deferred Costs Related To Proposed Public Offering. Costs incurred in connection with the proposed public offering of common stock have been deferred and will be charged against capital if the offering is successful or against operations if it is unsuccessful. The estimated expenses of this offering in connection with the issuance and distribution of the securities being registered, all of which are to be paid by the Registrant, excluding commissions and fees payable to the Escrow Agent and broker/dealers are as follows:
Registration Fee $ 6,600.00 Legal Fees and Expenses 19,580.00 Accounting Fees and Expenses 2,000.00 Printing 3,785.00 Miscellaneous Expenses 2,871.00 --------- Total $34,836.00 ==========
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. 7 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 3. RELATED PARTY TRANSACTIONS Mr. Russ Lyon recently waived his rights to exercise said option during the first quarter of 2001, in lieu of 200,000 shares of the registrant at zero par value, to be issued upon the effectiveness of the registrants registration statement. The shares will be issued pro-rata to the two years of the employment agreement. Note 4. STOCK-BASED COMPENSATION 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". The company issued a total of 1,230,902 shares to all its employees and consultants under the 2000 incentive stock option plan, during the quarter ended march 31, 2001. NOTE 5. SUBSEQUENT EVENTS PUBLIC OFFERING OF COMMON STOCK On December 31, 1999, the Board of Directors authorized the Company to sell in a public offering of 2,500,000 shares of common stock pursuant to an effective registration statement on Form SB-2 filed under the Securities Act of 1933. Each share shall have a purchase price of $5.00. On March 23, 2001, the number of shares offered to be sold to the public was increased by the Registrant to 5,000,000 and the offering price was decreased to $5 per share. Proceeds from the public offering shall be for working capital and general corporate purposes. AGREEMENT WITH CHINA BUSINESS CHAIN GROUP, LLC. On March 10, 2000, the Registrant signed an exclusive reseller agreement with China Business Chain Group, LLC, (CBCG) to market the MedMaster Suite of software application in China. Under the terms of the agreement, CBCG will purchase up to US $5 million in units of the Chinese version of the MedMaster suite in order to retain exclusive distribution rights to China. CBCG will work as an integrator, interfacing with other third-party Chinese healthcare applications. For this purpose, InterCare has agreed to license the MedMaster software on reasonable and cooperatively-priced terms. As a result of the multi-language functionality of the MedMaster software, InterCare anticipates that it will be relatively simple to make a Chinese version available to CBCG. 8 InterCare.com-dx, Inc. Business Overview InterCare.com-dx, Inc., ("InterCare") formerly known as Inter-Care Diagnostics, Inc., is organized in the State of California. We are an innovative software products company specializing in state-of-the-art enterprise solutions for the healthcare IT market. The Company developed the Mirage Systems Multimedia Biofeedback software program in 1994. This is a cross-platform program available in both Microsoft Windows 3.X including windows 95;98 and Apple Macintosh platforms. This software became the first United States FDA approved software program for neuromuscular re-education and biofeedback training. The Company also has four other software products in the market including the "Body Pain Trigger Points Program", one of our best selling software products, with over 20,000 copies sold. The Company intends to convert all its software programs to run in all the popular operating systems available, including but not limited to Microsoft Windows, Macintosh and Linux or Unix operating systems. InterCare as a value-added reseller, develops, markets, provides professional services and supports for the MedMaster' - a clinically-focused, multi-disciplinary enterprise solution targeting a variety of large-scale healthcare organizations. These include: Integrated Healthcare Delivery Networks (IHDNs), hospitals, HMOs and large clinics. MedMaster' products offer a lifetime electronic patient record, clinical data repository and integrated clinical applications spanning the continuum of care. Healthcare providers can access patient information, invoke rules and standards of care, manage cost and care delivery, as well as maintain compliance with regulatory documentation and payment requirements. They have been designed specifically for clinicians and healthcare decision-makers. By uniquely separating medical knowledge databases (MKB) from applications, applications take on the attributes of the MKB's incorporated into the CDR (Central Data Repository) allowing personalization to individual end-users while preserving a common look and feel across applications. The fifteen (15) years of development that went into MedMaster has resulted in a comprehensive array of functionality that leverages technology, care delivery processes and human interface needs in a manner that personalizes the system according to each individual's expectations and preferences without changing application code. The strength of MedMaster applications is derived from differentiated core technologies consisting of: a virtual, multi-media, object database (VMDB) that is self-indexing and does not require Data Base Administrators; 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 and the inclusion of data from these system into the MedMaster CDR for a single point of access to merged information. Over 10 years of research and development have been spent in the development of MedMaster software. InterCare's MedMaster product suite includes: - ClinicMaster - Outpatient/Ambulatory Care Solution - WardMaster - Inpatient/Acute Care Solution - CareMaster - Interdisciplinary Pathways, Care and Quality Management Solution - BaseMaster - Medical Knowledge Base Administration - ImageMaster - Multi-media Archiving Solution - IntegrationMaster - Bi-directional Interface Engine - DataMiner - End-user Data Query, Data Mining and Reporting Solution - VMDB - Client/Server Virtual Multi-object Architecture Data Base Management Solution. 9 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 $4,791.00. 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 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. LACK OF A PRESENT MARKET FOR SECURITIES The Common Stock is currently not listed or trading in any exchange at this Time MARKET FOR COMMON STOCK The Company intends to begin trading its common stock in the NASDAQ Small Cap Market, upon completing its current public offering of its common stock, as well As meeting the minimum listing requirements. There can be no assurance that the Company's common stock will be listed, or trade in such market at all. If the Company is unable to trade in such market, it may apply to trade on the OTC Bulletin Board administered by the National Association of Security Dealers. SELECTED FINANCIAL DATA The Company had net working capital of $346,485 as at March 31, 2001 Compared to networking capital of $95,867 during the comparable period in 2000. This represents a 72% increase in working capital. The increase in working capital is due to the sales of additional MedMaster software licenses to Tenet HealthSystems Medical, Inc., and associated implementation service fees earned during the reporting period. Based on a prior agreement, the company is obligated to pay 60% of such sales to Meridian Holdings, Inc., an affiliated. The applicable revenue and expense, and related accounts receivable and payable are included in the Income Statement and Balance Sheet as of March 31, 2001. The selected financial data set forth above should be read in conjunction with 10 "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. 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 Sb2 registration statement filed by the registrant in order to raise up to $25,000,000 was declared effective initially or January 29, 2001 by the United States Securities and Exchange Commission. An amended sb2 filed subsequent to that was declared effective as of April 3, 2001. As of this writing, the offering is on going and there is no assurance that the registrant will be able to raise all the funds required or any fund at all. If unable to raise the $500,000 minimum through this offering, the registrant may not be able to break escrow, and will therefore cancel the offering. This will seriously impact the liquidity of the registrant. 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. As a result, our first quarter revenues can be less than those of the preceding 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. We will depend on the commercial success of our product suite, which has not yet been shipped. We have generated substantially all of our revenues from licenses and services related to current and prior versions of our product suite. REVENUES Total revenues for the year ended March 31, 2001 was $334,199 compared to $0 during comparable period in 2000. The revenue was generated from software license sales and consulting services (see note 2 to the financial statement). On March 16th, 2001, the Company sold one software license to Tenet Health Systems Medical, Inc. Based on a prior agreement, the company 11 is obligated to pay 60% of such sales as royalty to Meridian Holdings, Inc.(an affiliated Company). COST OF REVENUES Cost of revenues increased to $126,897 for the period ended March 31, 2001 compared to $0 in the comparable period in 2000. This increase in the cost of revenue is due to licensing fees incurred from the purchase of MedMaster software license and level three support services from Meridian Holdings, Inc., a related party. SALES AND MARKETING Only minimal sales and marketing has been done by the Company, since focusing most of its resources at the moment in our Internet strategies, and software enhancement, testing and debugging. The Company is budgeting over $250,000 for its initial roll-out of new products sales and marketing campaign during the second quarter of the year 2001, assuming more capital is raised from this offering to pay for such an expense. PRODUCT AND CONTENT DEVELOPMENT Software products and Internet content development expenses is anticipated to increase significantly during the next coming year, due to website redesign and other Internet initiative launch costs, consisting primarily of personnel and consulting costs. The Company projects to spend over $1,250,000 during the next 12 months to fund project and content development. This is contingent upon the Company's ability to raise funds from investors. GENERAL AND ADMINISTRATIVE General and administrative expenses for the period ended March 31, 2001 was $280,082, compared to $0 during the comparable period in 2000. The increase in operating expense is due to the additional operating costs of increased personnel requirement, consultant fees, as well as research and further development of the MedMaster software program as a value added reseller. Of the $280,082 expenses during the period ended March 31 2001, $25,000 was for salary paid to Mr. Russ Lyon our President and Chief Technology Officer, $880.50 was for depreciation expense, the remaining balance was for general corporate purposes and product development. The Company anticipates future increases in general and administrative expenses as it embarks on aggressive product development, sales and marketing with its associated increase in personnel costs and legal and accounting expenses related to the public offering of its common stock. OPERATING LOSS As a result of the factors described above, Company expects further increases in operating expenses for the year 2001, assuming additional funding is raised from this offering 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 The Company had a net loss of $(72,780) or (0.006) per share for the period ended March 31, 2001, compared with net loss of $(35) in March 31, 2000. The increase in net loss was due to increase in operating expense. PLAN OF OPERATIONS A registration statement filed by the Company for the purpose of raising up to 12 $25,000,000, was approved by United States Securities and Exchange Commission on January 29, 2001. The offering prospectus was amended on March 27, 2001, in Which the number of shares authorized for sell was increased from 2,500,000 to 5,000,000, and the offering price was decreased from $10 per share to $5 per share. The later was declared effective as of April 3rd, 2001. The Company intends to use part of the funds raised during this offering for Product launching and general corporate purposes. If adequate funds are not available or not available on acceptable terms, we may be unable to fund our expansion, successfully promote our brand name, take advantage of acquisition opportunities, develop or enhance services or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results 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. PART II - OTHER INFORMATION ADDITIONAL INFORMATION The registrant issued additional shares to its employees and consultants during the first quarter of 2001, pursuant to the 2000 Qualified and non-qualified incentive Stock-option plan. Also, during the first quarter of 2001, the board of directors approved an amendment to Mr. Russ Lyons employment agreement retro-actively dated November 30, 2000. Significant part of this amendment, is that Mr. Lyon shall waive his option to purchase 500,000 shares of Meridian Holdings, Inc., Common Stock at $0.50 per share, in lieu of receiving 200,000 restricted shares of the Registrant at zero par value, pro-rated to the term of his employment agreement (Please see Exhibit 1) 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.com-dx, Inc. DATE: May 12, 2001 By: /s/ Philip Falese ------------------- Philip Falese Chief Financial Officer 13