<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K/A
AMMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 18, 1998
--------------------------
HEALTHDESK CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
California 0-21819 94-3165144
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
2116 Financial Center
Des Moines, IA 50309
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (515) 244-5746
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K filed
August 18, 1998 as set forth in the pages attached hereto.
Item 7. Financial Statements and Exhibits.
(a) AUDITED FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
SHUBERT & COMPANY
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Members
MC Informatics, LLC
Fountain Valley, California
I have audited the accompanying balance sheet of MC Informatics, LLC, a
California limited liability company, as of December 31, 1997, and the related
statements of operations, members' deficit and cash flows for the period from
April 14, 1997, inception, through December 31, 1997. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of MC Informatics, LLC as of December
31, 1997, and the results of its operations and its cash flows for the period
from April 14, 1997, inception, through December 31, 1997 in conformity with
generally accepted accounting principles.
/s/ Allan C. Schubert
Schubert & Company
July 21, 1998
<PAGE>
MC INFORMATICS, LLC
(A California Limited Liability Company)
BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -
Accounts receivable 116,504
Prepaid insurance 3,772
--------
TOTAL CURRENT ASSETS 120,276
PROPERTY AND EQUIPMENT
Furniture 1,000
Less accumulated depreciation (108)
NET PROPERTY AND EQUIPMENT 892
OTHER ASSETS
Office lease, accumulated amortization of $500 500
Covenant not to compete, less accumulated amoritzaion of $2,031 5,469
Contracts, less accumulated amortization of $650 5,350
Goodwill, less accumulated amortization of $813 6,687
--------
TOTAL OTHER ASSETS 18,006
--------
TOTAL ASSETS $139,174
--------
LIABILITIES AND MEMBERS' DEFICIT
CURRENT LIABILITIES
Note Payable (Note 2) $ 40,000
Accounts Payable 73,643
Accrued interest payable 1,566
Accrued payroll and payroll taxes 48,691
Accrued vacation and sick leave 25,363
Other Liabilities 2,300
--------
TOTAL CURRENT LIABILITIES 191,563
LONG-TERM DEBT
Notes payable to related party (Note 3) 40,000
Commitments (Note 4) -
-
TOTAL LONG-TERM DEBT 40,000
MEMBERS' DEFICIT (92,389)
--------
TOTAL LIABILITIES AND MEMBERS' DEFICIT $139,174
--------
</TABLE>
See accountants' report and accompanying notes.
<PAGE>
MC INFORMATICS, LLC
(A California Limited Liability Company)
STATEMENT OF INCOME
FOR THE PERIOD FROM APRIL 14, 1997, INCEPTION, THROUGH DECEMBER 31, 1997
REVENUE $ 681,332
DIRECT EXPENSES 261,618
----------
GROSS PROFIT 419,714
OPERATING EXPENSES
General and administrative 570,804
Advertising 5,600
Depreciation and amortization 4,102
----------
TOTAL OPERATING EXPENSES 580,506
NET OPERATING LOSS (160,792)
INTEREST EXPENSE (1,597)
----------
NET LOSS $(162,389)
----------
<PAGE>
MC INFORMATICS, LLC
(A California Limited Liability Company)
STATEMENT OF MEMBERS DEFICIT
FOR THE PERIOD FROM APRIL 14, 1997, INCEPTION, THROUGH DECEMBER 31, 1997
<TABLE>
<CAPTION>
Richard Garfield
Bill W. Childs A. Montgomery E.Thompson Total
-------------- ------------- ---------- -----
<S> <C> <C> <C> <C>
Contributions $ 35,000 $ 35,000 $ - $ 70,000
Net Loss (64,955) (64,955) (32,479) (162,389)
--------- -------- -------- ---------
Members' deficit at $ (29,955) $(29,955) $(32,479) $ (92,389)
December 31, 1997 ========= ======== ======== =========
</TABLE>
<PAGE>
MC INFORMATICS, LLC
(A California Limited Liability Company)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 14, 1997, INCEPTION, THROUGH DECEMBER 31, 1997
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss $ (162,389)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Amortization 3,994
Depreciation 108
Increase in accounts receivable (116,504)
Increase in prepaid insurance (3,772)
Increase in accounts payable 73,643
Increase in accrued interest payable 1,566
Increase in accrued payroll 48,691
Increase in accrued vacation and sick leave 25,363
Increase in other liabilities 2,300
----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (127,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (1,000)
Purchase of intangible assets (22,000)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (23,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to related party 40,000
Proceeds from note payable 40,000
Members' capital contributions 70,000
----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 150,000
----------
NET INCREASE (DECREASE) IN CASH -
CASH AT INCEPTION, April 14, 1997 -
-
CASH AT YEAR END $ -
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR INTEREST $ 31
==========
<PAGE>
MC INFORMATICS, LLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM APRIL 14, 1997, INCEPTION, THROUGH DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of MC Informatics, LLC
is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of
the Company's management that are responsible for their integrity and
objectivity. The Company follows the accrual method of accounting.
These accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
Nature of Operations
MC Informatics, LLC (the Company) was formed on April 14, 1997 as a
California limited liability company. The Company provides management
and technical services to the healthcare information industry,
specializing in facility management, outsourcing, and system
integration and consulting, primarily to customers in the state of
California.
Bill W. Childs, Richard A. Montgomery and Garfield E. Thompson, the
members of the Company, hold a 40%, 40% and 20% interest, respectively
(Note 6). Profits and losses are allocated and cash flows are
distributed in accordance with the members' respective ownership
interest. Pursuant to the Operating Agreement of the Company, there is
only one class of members' interest and all members have limited
liability for the obligations of the Company. The Company will dissolve
and cease to exist by December 31, 2017.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of financial statements and the reported amounts of revenue and
expenses during the reported period. Actual results could differ from
those statements.
Cash and Equivalents
The Company considers all highly liquid investments with maturities of
three months or less when purchased to be cash equivalents.
The Company maintains some of its cash in bank deposit accounts which,
at times, may exceed the federally insured limits. No losses have been
experienced related to such accounts. The Company believes it places
its cash with quality financial institutions and is not exposed to any
significant concentrations of credit risk.
<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounts Receivable
No allowance for uncollectible accounts has been provided. Management
has evaluated the accounts and believes they are all collectible.
Property, Equipment and Depreciation
Property and equipment are valued at cost. Maintenance and repair costs
are charged to expense as incurred. Gains and losses in disposition of
property and equipment are reflected in income. Depreciation is
computed on the straight-line method for financial reporting purposes,
based on the estimated useful lives of the assets.
Intangible Assets
Intangible assets are amortized over the straight basis over 1 - 5
years.
Income Taxes
The Company is a limited liability company treated as a partnership for
income tax reporting purposes and, as such, is not subject to income
tax. Accordingly, no provision for income taxes is provided in the
financial statements. The income tax liability of the individual
members is not accrued on the books of the Company.
Advertising
Advertising costs are expensed as incurred. Advertising expense was
$5,600 for the period from April 14, 1997, inception, through December
31, 1997.
2. NOTES PAYABLE
The Company has an unsecured note payable to Sara McCoy, under
agreement dated October 15, 1997, payable in lump sum payment with
interest at 10%, due on the later of November 15, 1997 or upon the
receipt of payment of a specific invoice from a customer (Note 6).
<PAGE>
3. NOTES PAYABLE TO RELATED PARTY
Notes payable to related party consists of the following:
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<S> <C>
Note payable to Bill W. Childs, member of the Company, under
agreement dated July 22, 1997, payable in a lump sum payment
with interest of 10%, due July 22, 2002, unsecured.
$ 15,000
Note payable to Bill W. Childs, member of the Company, under
agreement dated December 2, 1997, payable in a lump sum payment
with interest at 10%, due December 2, 1999, unsecured.
25,000
---------
Total notes payable $ 40,000
=========
</TABLE>
Future minimum debt maturities of notes payable to related party are
$25,000 and $15,000 in 1999 and 2002, respectively.
4. COMMITMENTS
The Company leases its office facilities under a non-cancelable
operating lease, which expires in 1998. Remaining future minimum lease
payment required under this operating lease is $4,533 in 1998. In 1997,
rent expense was $4,533.
5. PROFIT SHARING PLAN
The Company established a profit sharing plan on September 1, 1997,
which is qualified under Section 401(k) of the Internal Revenue Code.
Any employee who has attained the age 21 and has completed three months
of service is eligible to participate. Employees may contribute to the
plan subject to the limits of Section 401(k) of the Internal Revenue
Code. The Company may contribute to the profit sharing on behalf of the
employees at the Company's discretion. For 1997, there were no Company
contributions to the plan.
6. SUBSEQUENT EVENTS
On January 14, 1997, the Company paid the $40,000 note payable to Sara
McCoy (Note 2).
In June 1998, the Company amended their Operating Agreement to reflect
Bill W. Childs and Garfield E. Thompson purchase of Richard A.
Montgomery's interest from his
<PAGE>
6. SUBSEQUENT EVENTS (Continued)
successor in interest, Ruth E. Montgomery. As a result of their
purchase, Bill W. Childs and Garfield E. Thompson, the remaining
members of the Company, hold a 60% and 40% interest, respectively.
The Company is currently in negotiations to merge the Company with
HeathDesk Corporation. Under the current Agreement and Plan of
Reorganization, the Company will merge with a newly created subsidiary
of HealthDesk Corporation in exchange for the members of the Company
receiving at least 40% of the common stock of HealthDesk Corporation.
As of the date of this report, the Agreement and Plan for
Reorganization has not been finalized.
7. SIGNIFICANT SOURCES OF REVENUE
The Company conducts a major portion of its business with certain
customers, each of which accounts for more than 10% of total revenues.
For the period from April 14, 1997, inception, through December 31,
1997, revenue from four major customers amounted to $536,743 or 79% of
total revenues.
8. BUSINESS ACQUISITION
In May 1997, the Company acquired certain assets of JSS Healthcare. The
acquisition was recorded as a purchase and, accordingly, the purchase
price was allocated to the assets acquired based in their estimated
fair value at the date of purchase. The Company paid cash of $42,000
for the net assets acquired.
Results of the operations of JSS Healthcare have been included in the
accompanying statement of operations from the date of acquisition
through December 31, 1997.
(b) UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The accompanying pro forma condensed financial statements illustrate
the effect to the Asset Sale to PATI and the Merger with MCIF on the Company's
financial position and results of operations. The pro forma condensed balance
sheet as of September 30, 1998 is based on the historical balance sheet of the
Company and MCIF as of that date. The pro forma condensed statements of
operations for the year ended December 31, 1997 and the nine months ended
September 30, 1998 are based on the historical statements of operations of the
Company for those periods and the historical statements of operations of MCIF
for the period from April 1, 1997 (inception) to December 31, 1997 and the nine
months ended September 30, 1998. The pro forma condensed statements of
operations assume the Asset Sale and the Merger took place on January 1, 1997
and 1998.
The pro forma condensed financial statements are not intended to be
indicative of the financial position or results of operations which actually
would have been realized had the Asset Sale and Merger occurred at the times
assumed, nor of the future results of operations of the combined entities. The
accompanying pro forma condensed financial statements should be read in
conjunction with the historical financial statements and notes of the Company
and MCIF.
<PAGE>
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, 1998
---------------------------------------------------------------------------
Pro Forma Pro Forma
The Company MCIF Adjustments Combined
------------------ --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents........ $ 715,264 $ 24,511 654,920(1) $ 1,394,695
Accounts receivable.............. 642,575 642,575
Other current assets............. 491,877 1,724 (353,010)(3) 34,647
(105,944)(1)
------------- ------------- --------------
Total current assets........... 1,207,141 668,810 2,071,917
Property and equipment, net...... 284,129 3,621 (112,845)(1) 174,905
Goodwill......................... -- -- 3,069,406(2) 3,069,406
Other assets..................... 109,249 18,307 (90,266)(2) 18,307
(18,983)(1)
------------- ------------- --------------
Total assets................... $ 1,600,519 $ 690,738 $ 5,334,535
============= ============= ==============
Liabilities and Shareholders' Equity/
(Deficit)
Accounts payable and accrued
liabilities $ 183,055 $ 117,719 (3,010)(3) $ 319,364
30,000(2)
(25,000)(1)
16,600(1)
Loans Payable.................... -- 452,000 (350,000)(3) 102,000
Other current liabilities........ -- 247,544 247,544
------------- ------------- --------------
Total liabilities.............. 183,055 817,263 668,908
------------- ------------- --------------
Shareholders' equity/(deficit)
Convertible preferred stock...... 1,248,673 -- (1,248,673)(4) --
Common stock..................... 12,257,505 70,000 (70,000)(2) 16,403,793
75,000(1)
2,822,615(2)
1,248,673(4)
Warrants......................... 195,687 -- 195,687
Accumulated deficit.............. (12,284,401) (196,525) 350,548(1) (11,933,853)
196,525(2)
------------- ------------- --------------
Total shareholders' equity/(deficit) 1,417,464 (126,525) 4,665,627
------------- ------------- --------------
Total liabilities and
shareholders' equity (deficit) $ 1,600,519 $ 690,738 $ 5,334,535
============= ============= ==============
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------------------------------
Pro Forma Pro Forma
The Company MCIF Adjustments Combined
------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Total revenue....................... $ 382,362 $ 681,332 $ (382,362)(6) $ 681,332
Direct Expenses..................... -- 261,618 261,618
------------- ------------- --------------
Gross Profit........................ 382,362 419,714 419,714
Operating expenses:
Product development.............. 2,248,018 -- (2,248,018)(6) --
Sales and marketing.............. 1,422,111 -- (1,422,111)(6) --
General and administrative....... 506,132 580,506 1,086,638
Amortization of goodwill......... -- -- 328,865(5) 328,865
------------- ------------- --------------
Loss from operations.............. (3,793,899) (160,792) (995,789)
Interest income.................. 137,375 -- 137,375
Interest expense................. (14,900) (1,597) (16,497)
Amortization of discount and
issuance costs associated with ------------------ --------------
bridge financing............... (145,023) -- (145,023)
------------- ------------- --------------
Loss from continuing operations before
income taxes .................... (3,816,447) (162,389) (1,019,934)
Provision for income taxes.......... 800 -- 800
============= ============= ==============
Loss from continuing operations..... $ (3,817,247) $ (162,389) $ (1,020,734)
============= ============= ==============
Loss per share information (7):..... $ (0.73) $ (0.09)
============= =============
Basic and diluted loss per share from
continuing operations............
Weighted average number of shares of 5,212,060 11,292,370
common stock, basic and diluted.. ============= ==============
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1998
---------------------------------------------------------------------------
Pro Forma Pro Forma
The Company MCIF Adjustments Combined
------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Total revenue....................... $ 56,458 $ 2,306,099 $ (56,458)(6) $ 2,306,099
Direct Expenses..................... -- 1,486,578 1,486,578
------------- ------------- -------------
Gross Profit........................ 56,458 819,521 819,521
Operating expenses:
Product development.............. 1,119,503 -- (1,119,503)(6) --
Sales and marketing.............. 675,668 -- (675,668)(6) --
General and administrative....... 208,265 849,857 1,058,122
Amortization of goodwill......... -- -- 328,865(5) 328,865
Non-recurring restructuring costs 220,697 -- 220,697
------------- ------------- -------------
Income/(loss) from operations....... (2,167,675) (30,336) (788,163)
Interest income.................. 49,563 -- 49,563
------------- ------------- -------------
Income/(loss) from continuing
operations before income taxes .. (2,118,112) (30,336) (738,600)
Provision for income taxes.......... 600 3,800 4,400
------------- ------------- -------------
Income/(loss) from continuing
operations....................... $ (2,118,712) $ (34,136) $ (743,000)
============= ============= =============
Loss per share information (7): $ (0.37) $ (0.05)
============= =============
Basic and diluted loss per share from
continuing operations............
Weighted average number of shares of
common stock, basic and diluted.. 5,717,570 14,007,523
============= =============
</TABLE>
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
<TABLE>
<S> <C>
(1) Gives effect to:
Sale to Patient Infosystems of:
Cash received from the sale of assets and equipment $ 654,920
Prepaid and other current assets (105,944)
Other assets (18,983)
Net book value of the equipment, software and furniture sale (112,845)
Accrued liabilities paid by the Company (16,600)
Reversal of Patient Infosystems licensing fee 25,000
-----------
Issuance of 150,000 shares of Common Stock to MIIX as part of the asset sale (75,000)
Gain on sale to Patient Infosystems $ 350,548
===========
(2) Gives effect to:
Issuance of 5,645,230 shares of Common Stock at $0.50 per share to MCIF as
a result of the merger $ 2,822,615
Accrual of merger related expenses 30,000
Elimination of MCIF equity (70,000)
MCIF deficit 196,525
Deferred merger costs 90,266
-----------
Goodwill $ 3,069,406
===========
</TABLE>
<PAGE>
The historical cost of MCIF's assets and liabilities are approximately the
same as their fair value.
(3) The elimination of intercompany loans and related interest.
(4) Gives effect to the conversion of all outstanding shares of Series B
Preferred Stock into 2,525,000 shares of Common Stock upon the consummation
of the merger.
(5) Goodwill is estimated to have a useful life of seven years and is amortized
using the straight-line method. This Pro Forma Condensed Statement of
Operations for the year ended December 31, 1997 and the nine months ended
September 30, 1998 reflects nine-month amortization for those periods 1997
and 1998 respectively.
(6) Gives effect to the capitalized asset sale as if it had taken place January
1, 1997 and 1998, which the Company's current operation is assumed to be
discontinued. The reduction in depreciation expense as a result of the asset
sold is immaterial.
(7) Pro forma loss per share from continuing operations is based on the weighted
average number of shares of Common Stock outstanding during the periods
after giving pro forma effect to the conversion of the Company's outstanding
Series B Preferred Stock to Common Stock and the issuance of Common Stock to
MCIF and MIIX in connection with merger as of April 1, 1997 and January 1,
1998. Options and warrants to purchase Common Stock were excluded in the
calculation of the pro forma loss per share, as their effect would be
antidilutive.
(c) Exhibits.
Exhibit No. Description
----------- -----------
23.1 Consent of the Independent Public Accountants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HealthDesk Corporation
December 4, 1998 By: /s/ Joseph R. Dunham II
-----------------------
Joseph R. Dunham II
Director and member of the Operating
Committee
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountant, I hereby consent to the inclusion in this
ammendment to the Current Report (File No. 0-21819) on Form 8-K of HealthDesk
Corporation filed August 18, 1998 of my report dated July 21, 1998 with respect
to the audited financial statements of MC Informatics, LLC.
/s/ Allan C. Shubert
Newport Beach, California 92660
December 3, 1998
