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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR QUARTER ENDED SEPTEMBER 30, 2000 COMMISSION FILE NO. 0-29804
eCLICKMD, INC.
(Exact name of registrant as specified in charter)
NEVADA 82-0255758
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(State or other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
201 EAST MAIN STREET, BRADY, TEXAS 78625
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (915) 792-8400
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(Former Name, Former Address and Former 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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ ] NO [X]
As of November 10, 2000, there were 11,869,313 shares of common stock, $.001 par
value, of the registrant issued and outstanding.
Transitional Small Business Disclosure Format (check one)
YES [ ] NO [X]
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eCLICKMD, INC.
SEPTEMBER 30, 2000
INDEX
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PAGE NO.
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited) as of September 30, 2000 and
December 31, 1999 3
Consolidated Statements of Operations (unaudited) for the three months
ended September 30, 2000 and 1999 4
Consolidated Statements of Operations (unaudited) for the nine months
ended September 30, 2000 and 1999 5
Consolidated Statements of Cash Flows (unaudited) for the nine months
ended September 30, 2000 and 1999 6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
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ITEM 1. FINANCIAL INFORMATION
eCLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
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<S> <C> <C>
Current assets
Cash and cash equivalents $ 4,531 $ 576,424
Accounts receivable - trade, net of allowance for doubtful
accounts of $27,068 and $30,864 at September 30, 2000
and December 31, 1999, respectively 62,547 20,162
Related party receivables -- 53,500
Prepaid expenses 175 175
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Total current assets 67,253 650,261
Property and equipment, net 189,707 20,150
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Total assets $ 256,960 $ 670,411
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LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Line of credit $ 400,000 $ 400,000
Convertible notes payable 1,736,100 --
Payable to related parties 133,556 142,059
Accounts payable 227,870 10,000
Accrued liabilities 93,486 78,192
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Total current liabilities 2,591,012 630,251
Long-term debt 163,000 1,217,750
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Total liabilities 2,754,012 1,848,001
Shareholders' deficit
Common stock - $0.001 par value; 50,000,000 shares authorized, 11,869,313
and 11,111,111 shares issued and outstanding at
September 30, 2000 and December 31, 1999, respectively 11,869 11,111
Additional paid-in capital (deficit) 1,121,949 (9,111)
Receivable for the purchase of equity (2,000) (2,000)
Accumulated deficit (3,628,860) (1,177,590)
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Total shareholders' deficit (2,497,052) (1,177,590)
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Total liabilities and shareholders' deficit $ 256,960 $ 670,411
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</TABLE>
See notes to interim financial statements.
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eCLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
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Revenues $ 111,354 $ 54,131
Operating expenses (931,445) (321,711)
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Operating loss (820,091) (267,580)
Other income 13 --
Interest expense (66,850) (14,249)
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Net loss $ (986,928) $ (281,829)
============ ============
Net loss per common share - basic and diluted $ (0.08) $ (0.03)
============ ============
Weighted-average number of common shares outstanding - basic
and diluted 11,256,111 11,111,111
============ ============
</TABLE>
See notes to interim financial statements.
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eCLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Revenues $ 246,853 $ 153,567
Operating expenses (2,539,671) (489,719)
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Operating loss (2,292,818) (336,152)
Other income 588 --
Interest expense (159,040) (31,685)
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Net loss $ (2,451,270) $ (367,837)
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Net loss per common share - basic and diluted $ (0.22) $ (0.03)
============ ============
Weighted-average number of common shares outstanding - basic
and diluted 11,159,444 11,111,111
============ ============
</TABLE>
See notes to interim financial statements.
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eCLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities
Net loss $(2,451,270) $ (367,837)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 20,225 23,157
Provision for doubtful accounts 23,875 --
Issuance of stock in lieu of interest 20,797 --
Changes in operating assets and liabilities (net of effects
of acquisition)
Accounts receivable - trade (82,092) 4,126
Other assets 1,437
Accounts payable 217,870 43,545
Accrued liabilities 14,337 41,674
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Cash flows used in operating activities (2,236,258) (253,898)
Cash flows from investing activities
Purchases of property and equipment (103,732) (779)
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Cash flows used in investing activities (103,732) (779)
Cash flows from financing activities
Borrowings on convertible notes payable 1,736,100 --
Borrowings on long-term debt -- 700,111
Proceeds from related parties 90,000 122,632
Payments to related parties (98,503) --
Payments received on advances to related parties 53,500 --
Payments of long term debt (13,000) (3,887)
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Cash flows provided by financing activities 1,768,097 818,856
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Net increase (decrease) in cash (571,893) 564,179
Cash, beginning of period 576,424 5,224
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Cash, end of period $ 4,531 $ 569,403
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See notes to interim financial statements
Supplemental disclosures for cash flow information:
Cash paid during the period for:
Interest $ 141,176 $ 3,129
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Income taxes $ -- $ --
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Non-cash investing and financing activities:
Conversion of debentures to stock $ 1,041,750
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Purchase of Health Tech, Inc. with equity $ 69,264 $ --
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Equity issued in reverse merger transaction $ -- $ 2,000
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</TABLE>
See notes to interim financial statements.
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eCLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The interim financial statements of eCLICKMD, Inc. and Subsidiaries (the
"Company" or "eClick") at September 30, 2000, and for the three and nine months
ended September 30, 2000 and 1999, are unaudited, and include all adjustments
(consisting only of normal recurring adjustments) which the Company considers
necessary for a fair presentation. The December 31, 1999 balance sheet was
derived from the balance sheet included in the Company's audited financial
statements as filed on Form 10-KSB for the year ended December 31, 1999. Certain
amounts previously reported in prior interim financial statements have been
reclassified to conform to the 2000 presentation.
The accompanying unaudited interim financial statements are for interim periods
and do not include all disclosures normally provided in annual financial
statements, and should be read in conjunction with the Company's audited
financial statements. The accompanying unaudited interim financial statements
for the three and nine months ended September 30, 2000 are not necessarily
indicative of the results which can be expected for the entire fiscal year.
2. GOING CONCERN
The consolidated financial statements for the year ended December 31, 1999 were
prepared on the assumption that the Company will continue as a going concern.
The Company's continued existence depends upon the success of management's
efforts to raise additional capital necessary to meet the Company's obligations
as they come due and to obtain sufficient capital to execute its business plan.
The Company intends to obtain capital primarily through issuances of equity.
Additionally, the Company intends to renew its line of credit agreement. There
can be no degree of assurance given that the Company will be successful in
completing additional financing transactions.
The consolidated financial statements do not include any adjustments to reflect
the possible effects on the recoverability and classification of assets or
classification of liabilities which may result from the inability of the Company
to continue as a going concern.
3. CONVERTIBLE DEBENTURES
From August to December 1999, the Company issued an aggregate amount of
$1,217,750 of convertible debentures to approximately 50 individuals. These
securities were issued pursuant to
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an exemption from registration available under Section 4(2) of the Securities
Act of 1933, as amended. The Company made a rescission offer to the debenture
holders during the first quarter of 2000. In March 2000, the Company completed
its rescission offer, and all but two of the debenture holders elected not to
rescind the purchase of their securities. The Company paid an aggregate amount
of approximately $13,000 of principal and interest to these two individuals in
connection with the rescission offer. During the third quarter of 2000,
convertible debentures representing approximately $1,042,000 elected to convert
at $1.75 per share into approximately 600,000 shares of the Company's common
stock.
4. STOCK SPLIT
On September 23, 1999, the Board of Directors of the Company approved a reverse
split of the outstanding common shares at the rate of one share for every 4.5
shares outstanding. Shareholders representing a majority of the outstanding
shares of common stock approved such actions, subject to the notification of the
shareholders as required by the rules and regulations of the Securities and
Exchange Commission. The split became effective March 7, 2000. Share and per
share data for all periods presented herein have been adjusted to give effect to
the stock split.
5. CONVERTIBLE NOTES PAYABLE
From January to September 2000, the Company issued an aggregate amount of
$1,736,100 of convertible notes payable to approximately 12 individuals. The
notes, which bear interest at 10%, have original maturity dates of three to
twelve months and expire through May 2001. The notes will be convertible into
preferred shares of the Company.
6. ACQUISITION
On June 30, 2000, the Company acquired certain assets of Health Tech, Inc., a
developer of financial and accounting software which is designed for the health
care industry and is located in Hartland, Michigan. Total consideration for the
acquisition was 145,000 shares of common stock. The book value of assets
acquired and liabilities assumed (which is estimated to approximate fair market
value) resulted in an increase in net operating assets of $97,537 (recorded at
$69,264 after the writeoff of certain advances by the Company to Health Tech,
Inc.). The acquisition has been accounted for under the purchase method of
accounting.
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Unaudited pro forma financial information for the three and nine months ended
September 30, 2000 and 1999 as though the acquisition had occurred January 1,
1999 is as follows:
<TABLE>
<CAPTION>
2000 1999
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three months nine months three months nine months
ended ended ended ended
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<S> <C> <C> <C> <C>
Revenues $ 111,354 $ 289,353 $ 98,988 288,138
========= =========== ========= =========
Net income (loss) $(886,928) $(2,513,289) $(351,414) $(576,593)
========= =========== ========= =========
Basic earnings (loss) per share $ (0.08) $ (0.22) $ (0.03) $ (0.05)
========= =========== ========= =========
</TABLE>
7. CORPORATE CHANGES
During the third quarter of 2000, pursuant to a Written Consent In Lieu of
Special Meeting of Shareholders dated May 26, 2000, the following actions went
into effect:
a) the Company's name was changed from "Link.com, Inc." to
"eCLICKMD, Inc.";
b) the Company's authorized capital stock was increased to
65,000,000 shares; and
c) a series of Company "blank check" preferred stock consisting
of 15,000,000 preferred shares was established
8. COMMITMENTS AND CONTINGENCIES
Certain officers and employees who were previously employed were terminated
during the fourth quarter of 2000. Several had employment contracts that provide
for payments totaling approximately $600,000 upon termination. The Company is
currently negotiating with certain employees and the outcome of such
negotiations is unknown at this time.
9. EMPLOYMENT BENEFIT PLAN
On August 16, 2000 the Board of Directors and Shareholders of the Company
approved the adoption of an employee stock option plan and a director stock
option plan (the "Plan"). At September 30, 2000, the Company had reserved
2,500,000 shares for issuance under each of these plans. No options had been
granted through September 30, 2000.
10. RELATED PARTY TRANSACTION
During the quarter ended September 30, 2000, the Company entered into a note
agreement with its Chief Executive Officer, who is also a shareholder of the
Company. This note provides for borrowing up to $155,000, bears interest at an
annual rate of 10% and is due on demand. At September 30, 2000 the Company had
borrowed $45,000 under this agreement.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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Forward Looking Statements
This Quarterly Report on Form 10-QSB contains "forward-looking"
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to the Company and its subsidiaries that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this report, the words "anticipate," "believe," "estimate," "expect" and
"intend" and words or phrases of similar intent, as they relate to the Company
or its subsidiaries or Company management, are intended to identify
forward-looking statements. Such statements reflect the current risks,
uncertainties and assumptions related to certain factors including, without
limitations, competitive factors, general economic conditions, customer
relations, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in other
filings made by the company with the Securities and Exchange Commission, based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.
Overview
The Company's business is connecting physicians, home health agencies
and nursing homes via electronic medical records ("EMR") products and services.
The Company has developed a systems solution, called DocLink, that transforms
the EMR into an interactive document. This paperless communication between the
provider and physician is achieved through electronic order and signature
software, which can be layered onto Internet communications, enterprise
systems, databases, and other technology. The physician can review the EMR and
return to the provider, with signatures, through this paperless system. The
software also allows the physician to electronically track and bill for Care
Plan Oversight ("CPO") the time a physician can bill per month per patient.
Many physicians overlook the CPO billings, primarily due to the increased
paperwork to manually track the billing. DocLink automatically tracks the time
spent and produces reports that can be used as the source document for billing.
Results of Operations
Three Months Ended September 30, 2000 compared to Three Months Ended September
30, 1999
Revenues for the three months ended September 30, 2000 were $111,354
compared to $54,131 in the same period in 1999. The increase in revenue was
primarily attributable to the increases in marketing activity in the first and
second quarters of 2000. The Company has undertaken new marketing efforts to do
business with major home health agencies after a number of its clients
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stopped doing business in fiscal 1999. These closings were caused by changes in
the Medicare home health payment system as implemented due to the Balanced
Budget Amendment of 1997. As a result of this amendment, Congress instituted
the Interim Payment System for home health agencies, which eventually forced
many providers out of business. Management believes that there will continue to
be adequate home health and other providers to use its software products in the
future.
Operating expenses were $931,445 for the three months ended September 30, 2000
compared to $321,711 for the three months ended September 30, 1999. The increase
in operating expenses was attributable to salaries and marketing expenses to
expand the visibility and use of the DocLink product. Significant additional
expenses were also incurred from the planned conversion of the Company's main
product, DocLink to a browser based product.
Interest expense for the quarter ended September 30, 2000 was $66,850 compared
to $14,249 in 1999 due to borrowings from long-term debt incurred in September
1999 to fund increased marketing and product development of the Company's
product lines.
Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30,
1999
Revenues for the nine months ended September 30, 2000 were $246,853 compared to
$153,567 in the same period in 1999. The increase in revenue was primarily
attributable to increased sales in the second quarter as discussed above.
Operating expenses were $2,539,671 for the nine months ended September 30, 2000
compared to $489,719 for the nine months ended September 30, 1999. Again, the
increases are directly attributable to the increases in marketing and
development activities to expand the capabilities and markets of the Company's
primary product, DocLink. During the period, the Company added offices in
Austin, Texas and Nashville, Tennessee and hired management to support the
expected growth in revenue and product offerings.
Interest expense for the nine months ended September 30, 2000 was
$159,040 compared to $31,685 in 1999 due to borrowings from long-term debt
incurred in September 1999 to fund increased marketing and product development
of the Company's product lines.
Liquidity and Capital Resources
In September 1999, the Company raised $735,250 in long-term convertible
debentures to increase the marketing and visibility of its core product,
DocLink. In the nine months ended September 30, 2000, the Company raised a
total of $1,736,100 in convertible notes with maturities ranging from ninety
days to one year. Such notes are convertible into Preferred Stock of the
Company which became available in June 2000. Cash provided by these financings
provided the funding for the period ended September 30, 2000. During the third
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quarter of 2000, convertible debentures representing approximately $1,042,000
elected to convert at $1.75 per share into approximately 600,000 shares of the
Company's common stock.
The Company has a line of credit at a bank in the amount of $400,000
that is currently fully borrowed. The line of credit has a maturity date of
October 2001.
The Company has limited cash resources and intends to raise additional
capital through convertible notes and the issuance of preferred stock or
additional common stock. The Company believes the additional capital will allow
it to continue its marketing efforts in its core products and develop the new
browser based version of DocLink. The availability of cash through such
resources is not assured and if the Company is not able to raise enough cash to
complete these goals, the ability of the Company to continue in business will be
uncertain.
The consolidated financial statements have been prepared on the
assumption that the Company will continue as a going concern. The Company's
continued existence depends upon the success of management's efforts to raise
additional capital necessary to meet the Company's obligations as they come due
and to obtain sufficient capital to execute its business plan. There can be no
degree of assurance given that the Company will be successful in completing
additional financing transactions.
The consolidated financial statements do not include any adjustments to
reflect the possible effects on the recoverability and classification of assets
or classification of liabilities which may result from the inability of the
Company to continue as a going concern.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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None.
ITEM 2. CHANGES IN SECURITIES
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See Notes to Consolidated Interim Financial Statements Number 3:
"Convertible Debentures," which are incorporated herein by reference.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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Pursuant to a Written Consent In Lieu of Special Meeting of Shareholders dated
May 26, 2000, the following actions became effective with 7,989,061
(representing approximately 72% of the outstanding voting capital stock of the
Company) Voting in favor of such actions:
a) the company's name was changed from "Link.com, Inc." to "eClickMD,
Inc.";
b) the company's authorized capital stock was increased to 65,000,000
shares; and
c) a series of Company "blank check" preferred stock consisting of
15,000,000 preferred shares was established.
ITEM 5. OTHER INFORMATION
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None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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a) EXHIBITS
27.1 Financial Data Schedule
b) REPORTS ON FORM 8-K
On July 17, 2000, the Company filed a Form 8-K to report the Company's
acquisition of substantially all the assets of Luro Associates, L.L.C., a
Michigan limited liability company.
On August 14, 2000 the company filed a Form 8-K/A to amend the Form 8-K filed on
October 5, 1999. The purpose of such amendment was to file certain unaudited
pro forma financial information related to (i) the Company's acquisition of
National Health Care Information Systems, LLC, a Texas limited liability
company and Venture Information Systems, LLC, a Texas limited liability
company, and (ii) the subsequent reverse acquisition of Link.com by Center Star
Gold Mines, Inc.
On September 13, 2000 the Company filed a Form 8-K/A to amend the Form 8-K filed
on July 17, 2000, to report certain financial statements and pro forma financial
information related to the Company's acquisition of substantially all the assets
of Luro Associates, L.L.C., a Michigan limited liability company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this quarterly Report to be signed on its behalf by
the undersigned thereunto duly authorized.
eCLICKMD, INC.
(Registrant)
Date: November 14, 2000 By: /s/ M. ROBERT RICE
---------------------------------------------
M. Robert Rice, President and Chief Executive
Officer (Principal Executive
Officer)
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION
NUMBER
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27.1 Financial Data Schedule
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