<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended 3/31/00
-------------------------
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)
For the transition period from _________ to ___________
Commission file number 0-27123
-------------------
MEDIQUIK SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 74-2876711
- ---------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4295 San Felipe, Suite 200, Houston, Texas 77027
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(Address of principal executive offices) (Zip Code)
(713) 888-1919
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(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes / / No / /
- --------------------------------------------------------------------------------
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
<PAGE>
6,296,886 shares of the Company's Common Stock issued and outstanding
at March 31, 2000.
Transitional Small Business Disclosure Format (Check one):Yes / /; No /X/
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MEDIQUIK SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
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<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 34,931 $ 47,424
Accounts receivable, net of allowance of $113,636
and $88,702 respectively 304,629 141,695
Inventory 28,828 21,737
----------- -----------
Total current assets 368,388 210,856
PROPERTY AND EQUIPMENT:
Office equipment and other 161,883 74,850
Less accumulated depreciation (8,367) (7,215)
----------- -----------
Total property and equipment 153,516 67,635
GOODWILL AND OTHER ASSETS 1,072,051 1,140,527
----------- -----------
TOTAL $ 1,593,955 $ 1,419,018
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 515,095 $ 199,479
Accrued expenses 439,267 598,208
Notes payable and subordinated debentures 186,195 85,000
----------- -----------
Total current liabilities 1,140,557 882,687
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock - 1,000,000 shares authorized, none issued
and outstanding
Common stock - $.001 par value 25,000,000 shares authorized;
6,296,886 shares issued and outstanding at March 31, 2000 6,298 6,033
Additional paid-in capital 4,985,295 4,489,811
Accumulated deficit (4,538,195) (3,959,513)
----------- -----------
Total stockholders' equity (deficit) 453,398 536,331
----------- -----------
TOTAL $ 1,593,955 $ 1,419,018
=========== ===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
MEDIQUIK SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2000 1999
------------ ------------
<S> <C> <C>
SALES $ 321,929 $ 477,979
COST OF SALES 277,663 414,023
----------- -----------
GROSS PROFIT 44,266 63,956
OPERATING EXPENSES:
Salaries - officers 103,000 38,961
Consulting fees 170,083 825,151
Other 346,746 138,207
----------- -----------
Total operating expenses 619,829 1,002,319
----------- -----------
LOSS FROM OPERATIONS (575,563) (938,363)
OTHER INCOME (EXPENSE):
Interest income - 1,309
Other income - 11,947
Interest expense (3,119) (12,754)
----------- -----------
Total other (expense) income (3,119) 502
----------- -----------
NET LOSS $ (578,682) $ (937,861)
=========== ===========
BASIC AND DILUTED LOSS PER SHARE $ (0.09) $ (0.19)
=========== ===========
BASIC WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,155,710 5,038,229
=========== ===========
DILUTED WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,251,751 5,038,229
=========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
MEDIQUIK SERVICES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE QUARTER ENDED MARCH 31, 2000
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
SHARES STOCK CAPITAL DEFICIT TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999 4,849,173 $ 4,849 $ 505,768 $ (829,854) $ (319,237)
Repurchase of unexercised warrants (12,880) (12,880)
Proceeds from issuance of common stock
and warrants 570,500 571 1,167,030 1,167,601
Issuance of common stock under consulting
agreements 272,334 273 1,017,169 1,017,442
Issuance of warrants for consulting services 463,100 463,100
Issuance of common stock under employment
agreement 10,000 10 28,190 28,200
Acquisition of Scardello Marketing Group LLC
assets 330,000 330 1,237,170 1,237,500
Proceeds received for interest in subsidiary 84,264 84,264
Net loss (3,129,659) (3,129,659)
--------- ------- ---------- ----------- ----------
BALANCE, DECEMBER 31, 1999 6,032,007 6,033 4,489,811 (3,959,513) 536,331
Repurchase of unexercised warrants
Proceeds from issuance of common stock
and warrants 135,000 135 269,865 270,000
Issuance of common stock under consulting 68,879 69 131,736 131,805
agreements
Issuance of common stock under employment
agreements 61,000 61 85,883 85,944
Proceeds received for interest in subsidiary 8,000 8,000
Net loss (578,682) (578,682)
--------- ------- ---------- ----------- ----------
BALANCE, MARCH 31, 2000 6,296,886 $ 6,298 $4,985,295 $(4,538,195) $ 453,398
========= ======= ========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MEDIQUIK SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
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<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
2000 1999
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $(578,682) $(937,861)
Adjustment for noncash transactions:
Common stock and warrants issued for services 217,749 726,415
Depreciation and amortization 70,768 3,996
Provision for losses on accounts receivable 24,934 -
Net changes in assets and liabilities:
Accounts receivable (187,868) 22,859
Inventory (7,091) 35,751
Accounts payable 329,116 (25,726)
Accrued expenses (158,941) 9,794
--------- ---------
Net cash used in operating activities (290,015) (164,772)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -
Capital expenditures (478) (1,614)
--------- ---------
Net cash used in investing activities (478) (1,614)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of indebtedness - (150,000)
Repurchase of unexercised warrants - (12,880)
Proceeds from sale of common stock 270,000 700,000
Proceeds from sales of interests in subsidiary 8,000 -
--------- ---------
Net cash provided by financing activities 278,000 537,120
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS (12,493) 370,734
CASH AND CASH EQUIVALENTS, beginning of period 47,424 7,578
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 34,931 $ 378,312
========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid $ - $ 13,560
NONCASH TRANSACTIONS
Short-term debt issuance for purchase of software $ 101,195 $ -
Return to vendor of software package 13,500 -
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MEDIQUIK SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 2000
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The interim condensed consolidated financial statements and notes
thereto of MediQuik Services, Inc. and its subsidiary (collectively, the
"Company" or "MediQuik") have been prepared by management without audit
pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Accordingly, the accompanying financial statements
reflect all adjustments that, in the opinion of management, are necessary for
a fair presentation of results for the periods presented. Such adjustments
are of a normal recurring nature. Certain information and notes normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
SEC's rules and regulations. However, management believes that the
disclosures presented herein are adequate to make the information not
misleading. The accompanying condensed consolidated financial statements and
notes should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999.
The preparation of these condensed consolidated financial statements
required the use of management's best estimates and judgment that affect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the periods. Actual results
could differ from those estimates. The results of operations for any interim
period are not necessarily indicative of results for the full year.
2. EARNINGS PER SHARE
The Company has adopted SFAS 128, "Earnings per Share," which
establishes standards for computing and presenting earnings per share
("EPS"). SFAS 128 requires the presentation of "basic" and "diluted" EPS on
the face of the consolidated statement of operations. Basic EPS amounts are
calculated using the average number of common shares outstanding during each
period. Diluted earnings per share assumes the exercise of all stock options
and warrants having exercise prices less than the average market price of the
common stock using the treasury stock method. For the quarter ended March 31,
2000, there were warrants to purchase 735,000 shares of common stock at
exercise prices ranging from $2.00 - $4.00 per share. In addition, on March
31, 2000, the Company granted options to purchase 583,863 shares of common
stock at an exercise price of $1.75 with terms of two to four years. For the
quarter ended March 31, 1999, there were warrants to purchase 100,000 shares
of common stock at an exercise price of $3.00 per share. Since the Company
incurred a loss for all periods presented, any dilutive securities would have
been excluded, as they would be anti-dilutive to basic EPS.
<PAGE>
3. SUBSIDIARY
In May 1999, MediQuik formed an 80% owned subsidiary known as
ChronicRX.com to provide Internet-based pharmacy services. ChronicRX.com will
focus on the chronic care niche and will specialize in prescription and
non-prescription medicines and management products used to treat chronic
diseases of all kinds.
ChronicRX.com has a net loss of approximately $48,500 for the
quarter ended March 31, 2000, and has a deficiency in net assets.
Accordingly, the Company has not recognized a liability to the minority
interest.
The Company anticipates that ChronicRX.com will become a
wholly-owned subsidiary of the Company. In March 2000, the Company reached
agreements with investors who have contributed cash to ChronicRX.com to
exchange their interest in ChronicRX.com for shares of the Company at $1.75
per share.
4. EQUITY TRANSACTIONS
WARRANTS - During the quarter ended March 31, 2000, in connection
with the sale of common stock, the Company issued warrants to purchase
270,000 shares of common stock at an exercise price of $2.00 per share. The
warrants begin to become exercisable in June 2000 and expire in December 2001.
During the quarter ended March 31, 1999, the Company issued warrants
to purchase 100,000 shares of common stock at an exercise price of $3.00 per
share in consideration for services provided. All warrants expire by April
30, 2000; the Company recorded an expense of $192,664 based on the fair value
of the warrants as of the grant date.
PRIVATE STOCK OFFERINGS - The Company issued 135,000 shares of
common stock and warrants for $270,000 for the quarter ended March 31, 2000,
and issued 350,000 shares of common stock for $700,000 for the quarter ended
March 31, 1999.
OTHER EQUITY TRANSACTIONS - During the quarter ended March 31, 2000,
the Company issued 129,879 shares of common stock to various consultants and
employees of the Company at a fair value of approximately $217,749.
During the quarter ended March 31, 1999, the Company issued 135,000
shares of common stock to various consultants and employees of the Company at
a fair value of approximately $533,751.
5. COMMITMENTS AND CONTINGENCIES
LOST SHARE CERTIFICATE - During July 1999, the Company authorized
and issued a certificate for 330,000 shares of common stock to SMG. The
certificate was issued with a restricted legend on the face. As of April 5,
2000 the Company has not been able to locate it. As a result, the Company
placed the certificate on hold with the stock transfer agent immediately upon
realization that the certificate was lost during 1999. The Company authorized
and issued an additional certificate for 330,000 shares of common stock to
SMG. SMG confirms that it received only the second certificate. The Company
does not believe that the shares will ever be located and presented in
exchange for value and accordingly the shares have not been included as
outstanding shares as of March 31, 2000 and December 31, 1999. The
restriction of the shares and the hold placement with
<PAGE>
the stock transfer agent are basis for the Company's opinion. The Company
intends to cancel such certificate during 2000. At March 31, 2000, the fair
market value of 330,000 shares was approximately $528,000. If such shares had
been outstanding during the quarter ended March 31, 2000 the basic and
diluted loss per share would have been unchanged at $(0.09).
6. LETTER OF INTENT
On March 31, 2000, the Company signed a Letter of Intent with
MiraQuest Capital Holdings, Inc. (MiraQuest), to issue to MiraQuest an amount
of common stock equal to the amount of the Company's outstanding stock,
including issuances due certain employees, contractors, consultants and any
unexercised Warrants and Options, just prior to the issuance. The intent is
to convey to MiraQuest a 50% ownership of the common stock of the Company on
a fully diluted basis. At closing MiraQuest will additionally purchase a
quantity of voting preferred stock sufficient to provide MiraQuest with a
target of 70% to 80% ownership. The letter of intent allows for convertible
debt as an alternative to or supplement to preferred stock.
In return for the Company's common and preferred stock, MiraQuest
will provide to the Company a minimum of $2 million cash net of any advances
and MiraQuest stock for the remaining sum required to equal the valuation of
the Company. The Company has received $500,000 in advances from MiraQuest as
of May 22, 2000. These advances are in the form of cash loans secured by the
Company's common stock in accordance with the provisions of the current terms
of the Company's private stock offering.
7. FUNDING REQUIREMENTS
The Company's principal cash requirements to date have been to fund
working capital in order to support growth of net sales. Because revenue from
operations has been inadequate to completely fund these requirements, the
Company has supplemented its revenue from operations with proceeds from its
private offerings of securities, loans and extensions of credit from vendors
in order to meet its working capital requirements. The Company anticipates
that as revenue from sales to managed care plans increases, the Company will
be able to satisfy all of its funding requirements for operations from such
revenue.
*******
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
This management discussion contains certain forward-looking statements as
identified by the use of words like "expects", "believes", and "anticipates"
and other similar phrases. Such statements reflect management's current view
of future financial performance based on certain assumptions, risks and
uncertainties. If any assumptions, risk or uncertainty factors change, such
changes may have a material impact on actual financial results. The
<PAGE>
Company is under no obligation to revise any forward-looking statements
contained herein, which are as of the date hereof. Readers are cautioned to
not place undue reliance on any forward-looking statements contained in this
discussion.
OVERVIEW
MediQuik Services, Inc. ("MediQuik" or the "Company") is a healthcare service
company specializing in the delivery of chronic disease management programs
to chronically ill patients on behalf of managed care payors. The Company is
deploying e-healthcare technology solutions in the delivery of MediQuik's
proprietary disease management tools and systems via the Internet.
The Company's business was organized on April 7, 1998, and began full-time
operations in July 1998 as Old MediQuik. Effective December 31, 1998, Old
MediQuik merged with and into Cash Flow Marketing, Inc., with Cash Flow as
the surviving corporation. Cash Flow changed its name to MediQuik Services,
Inc. immediately following the merger. This transaction has been treated as a
capital transaction in substance rather than a business combination; thus,
the accounting is similar to a reverse acquisition but no goodwill and/or
intangibles have been recorded. As a result Old MediQuik is considered the
accounting acquiror for financial statement purposes. Therefore, the
financial statements of the Company for periods prior to January 1, 1999 are
the financial statements of Old MediQuik, not Cash Flow Marketing, Inc.
Although initial Company revenues were derived primarily through product
sales, the Company has expanded beyond product delivery and has become a full
disease management provider working to improve patient care and reduce costs
to managed care payors. The Company currently offers managed care agreements
based on fee-for-service and capitated fee arrangements.
The Company is currently serving patients with Diabetes and is developing new
disease management programs for other high cost, chronic diseases, such as
asthma and congestive heart failure. MediQuik is focusing on certain diseases
with large afflicted patient populations where clinical research indicates
that active management will improve the health condition of the patient and
reduce the financial burden for managed care payors. The Company is in the
process of conducting research regarding the new disease management programs.
MediQuik offers comprehensive disease monitoring and maintenance solutions by
providing pharmacy and diagnostic products, disease education, adherence
review and reporting, and personal health resources via the U.S.Mail,
telephone and the Internet. The Company provides a complete line of blood
glucose monitoring systems, testing strips, lancets, swabs, insulin pumps,
compliance and wound care products for diabetes patients, and the Company is
adding new products and services to complement existing disease management
programs. MediQuik is focused on delivering high quality products and
services to chronic disease patients for insurance organizations that bear
the primary financial risk for healthcare treatment. MediQuik also works
directly with health
<PAGE>
maintenance organizations (HMOs), preferred provider organizations (PPOs),
self-insured companies and other third-party payors (TPAs) in an effort to
enhance the quality of life for chronically ill patients and improve the
financial outcomes for managed care payors. The Company also provides billing
and collection activities on behalf of the patient to the healthcare plan.
The Company will utilize advanced healthcare technology applications in the
delivery of MediQuik's proprietary disease management programs via the
Internet.
Research indicates that patients who actively manage certain chronic disease
factors experience reduced disease complications and an enhanced quality of
life. The Company believes that a coordinated disease management program,
including convenient product delivery and billing, personalized patient
education, routine disease counseling, immediate access to healthcare
professionals, and ongoing compliance testing will improve clinical and
financial outcomes for patients and managed care payors.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal cash requirements to date have been to fund working
capital in order to support growth of net sales. Because revenue from
operations has been inadequate to completely fund these requirements, the
Company has supplemented its revenue from operations with proceeds from its
private offerings of securities, loans and extensions of credit from vendors
in order to meet its working capital requirements. The Company anticipates
that as revenue from sales to managed care plans increases, the Company will
be able to satisfy all of its funding requirements for operations from such
revenue. The Company had an aggregate of $34,931 in cash as of March 31, 2000.
The Company had $130,000 of 15% Subordinated Debentures originally due in
June and December 1999. The Company paid $15,000 of the debentures in July
1999, $55,000 in December 1999, and $10,000 in April, 2000 and has received
an extension on the balance of $50,000, plus accrued interest, until June
2000. The debentures are owed to significant shareholders of the Company. The
Company has accrued wages of approximately $105,220 primarily to Company
officers and insiders who are significant shareholders in the Company.
Accounts receivable is primarily derived from payments due to the Company by
managed care plans and providers. As revenues increase, the Company expects
working capital requirements to increase. Standard medical billing cycles for
managed care plans average between 45-60 days. The Company expects to
experience similar billing cycles as direct managed care plan business
increases.
In December 1999, the Company began raising money from private investors
through a Private Placement Memorandum. As of March 31, 2000, MediQuik has
raised $485,000 in cash through the PPM. The PPM established a unit price of
$2.00 per unit. The unit includes one share of MediQuik common stock and two
warrants to purchase a share of common stock exercisable at $2.00 per share.
<PAGE>
On March 31, 2000, MediQuik signed a Letter of Intent with MiraQuest Capital
Holdings, Inc. / MiraQuest Ventures, LLC (MiraQuest). The terms of the Letter
of Intent provide MediQuik with $2,000,000 in initial funding and an equity
interest in MiraQuest, an Internet/E-Commerce Holding Company comprised
primarily of business-to-business entities. As of the date of this filing,
MediQuik has received $500,000 in advances pursuant to the terms of the
Letter of Intent. MiraQuest has a stated value of $400,000,000. MediQuik is
being valued at approximately $13,000,000 ($2.00 per share). The transaction
would provide MiraQuest with 70% of the voting stock in MediQuik. MediQuik
has engaged the financial advisory firm of Howard, Frazier, Barker, Elliott,
Inc. (HFBE) to provide a fairness opinion on the transaction. HFBE has
completed the fairness opinion with the conclusion that the transaction is
fair to the existing shareholders of MediQuik. The fairness opinion results
were reported at the Company's annual shareholders' meeting held on May 17,
2000. The MiraQuest transaction is currently scheduled for closing on May 31,
2000. Pursuant to the closing of the transaction, the Company will file a
Form 8-K disclosure report with the Securities and Exchange Commission.
RESULTS OF OPERATIONS
MediQuik is rapidly expanding through internal sales growth and plans to
conduct strategic acquisitions to further fuel growth and accelerate the time
to market of additional planned services. During 1998 and 1999, the Company
established: (i) corporate marketing and fulfillment operations; (ii)
contractual relationships with product manufacturers; (iii) contractual
relationships with specialty service providers; (iv) contractual
relationships with insurance payors and provider networks; (v) contractual
relationship with a pharmacy products distribution company; and (vi) initial
patient enrollment and fulfillment operations. During the three months ended
March 31, 2000, the Company expanded its proprietary clinical and e-care
technology initiatives, and implemented an internal billing/collection
department.
REVENUE FROM OPERATIONS
The Company commenced operations in July 1998 and received its initial
revenue in August 1998. For the three month period ending March 31, 1999, the
Company reported revenue of $477,979. Total revenue decreased to $321,929 for
the three months ended March 31, 2000. The revenue decrease primarily
resulted from reduced diagnostic product sales to managed care providers. The
Company is currently deriving the majority of its revenues through direct
sales to managed care plans. The Company expects to realize improvement in
gross margin percentages with increased direct managed care plan revenues.
Cash flow from operations has not been sufficient to fund all of the
Company's initial operating activities to date.
MediQuik receives patients primarily through agreements with managed care
plans and provider networks. Management believes that enrollment in managed
care plans has increased in recent years and, as a result, patient referrals
generated through the managed care plans should increase.
<PAGE>
GROSS PROFIT
The Company commenced operations in July 1998 and received its initial gross
profit in August 1998. For the period from January 1, 1999 to March 31, 1999,
the Company reported gross profit of $63,956 or 13.4% of revenue for the
period. Gross profit decreased to $44,266 or 13.8% of revenue, for the 3
months ended March 31, 2000.
Gross profit was primarily derived from diagnostic and pharmaceutical product
sales to managed care payors and patients. The gross profit percentage is the
result of volume purchase discounts. The Company expects continued increases
in gross profit percentage with increased direct sales to managed care plans.
OPERATING EXPENSES
For the period from January 1, 1999 to March 31, 1999, operating expenses
were $1,002,319. Operating expenses decreased to $619,829 for the three
months ended March 31, 2000, a decrease of 38%. The decrease in operating
expenses is primarily associated with reduced consulting expense from
non-cash equity transactions during the three months ended March 31, 2000.
Operating expenses also include marketing and selling expenses, general and
administrative costs, consultants compensation and the hiring and training of
staff. During the three months ended March 31, 2000, operating expenses
include the effect of $213,405 in non-cash equity transactions.
NET LOSS
The Company experienced a net loss of $937,861 for the period January 1, 1999
to March 31, 1999, primarily attributed to the development of the Company's
business operations. Net loss decreased to $578,682 for the three months
ended March 31, 2000. Net Loss includes the effect of several non-cash equity
transactions.
The Company expects the net loss to decrease with increased revenues and
gross profits from business operations.
PART II. - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
In December 1999, the Company began raising money from private investors who
are accredited investors as defined in Regulation D of the Securities Act of
1933. The offering covers 3,000,000 units issuable directly by the Company at
a purchase price of $2.00 per share. One unit comprises one share of MediQuik
common stock and two warrants. The warrant provides the right to purchase one
share of common stock at an exercise price of $2.00 per share. The warrants
are exercisable for a period beginning six months after the issue date until
48 months after the issue date and are subject to
<PAGE>
redemption by the Company at any time, in whole or in part, for a redemption
price of $4.00 per warrant. The Company issued 135,000 shares of common stock
and warrants for $270,000 for the quarter ended March 31, 2000. The Company
issued such shares without registration under the Securities Act of 1933 in
reliance on Section 4(2) of that act and the rules and regulations
promulgated thereunder. During the quarter ended March 31, 2000 the Company
issued 129,879 shares of common stock to various consultants and employees of
the Company at a face value of approximately $217,749.
<PAGE>
Index to Exhibits
Exhibit No. Description of Exhibit
*(b)(3)(i) Certificate of Incorporation of MediQuik
*(b)(3)(ii) Bylaws of MediQuik
*(b)(10) Material Contracts
(b)(27) Financial Data Schedule
*Previously filed with the Commission
<PAGE>
Exhibit (b)(27)
Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Mediquik Services, Inc.
Date: May 24, 2000 /s/ Grant Gables
-------------- -----------------------
Grant Gables, President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS FOR THE QUARTER ENDED MARCH 31, 2000 FOR MEDIQUIK SERVICES
INC., AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 34,931
<SECURITIES> 0
<RECEIVABLES> 418,265
<ALLOWANCES> 113,636
<INVENTORY> 28,828
<CURRENT-ASSETS> 368,388
<PP&E> 161,883
<DEPRECIATION> 8,367
<TOTAL-ASSETS> 1,593,955
<CURRENT-LIABILITIES> 1,130,557
<BONDS> 0
0
0
<COMMON> 6,298
<OTHER-SE> 447,100
<TOTAL-LIABILITY-AND-EQUITY> 1,593,955
<SALES> 321,929
<TOTAL-REVENUES> 321,929
<CGS> 277,663
<TOTAL-COSTS> 619,829
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,119
<INCOME-PRETAX> (578,682)
<INCOME-TAX> 0
<INCOME-CONTINUING> (578,682)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (578,682)
<EPS-BASIC> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
