<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------
FOR QUARTER ENDED JUNE 30, 2000 COMMISSION FILE NO. 0-29804
eClickMD, INC.
(Exact name of registrant as specified in charter)
NEVADA 82-0255758
--------------------------------------------------------------------------------
(State or other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
201 EAST MAIN STREET, BRADY, TEXAS 78625
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (915) 792-8400
--------------
(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 August 7, 2000, there were 11,111,908 shares of common stock, $.001 par
value, of the registrant issued and outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
--- ---
1
<PAGE> 2
eClickMD, Inc.
JUNE 30, 2000
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (unaudited) as of June 30, 2000 and
December 31, 1999 4
Consolidated Statements of Operations (unaudited) for the three months
ended June 30, 2000 and 1999 5
Consolidated Statements of Operations (unaudited) for the six months
ended June 30, 2000 and 1999 6
Consolidated Statements of Cash Flows (unaudited) for the six months
ended June 30, 2000 and 1999 7
Notes to Consolidated Financial Statements (unaudited) 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
2
<PAGE> 3
ITEM 1. FINANCIAL INFORMATION
3
<PAGE> 4
ECLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
2000 1999
------------ ------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 30,564 $ 576,424
Accounts receivable - trade, net of allowance for doubtful
accounts of $43,730 and $30,864 at June 30, 2000
and December 31, 1999, respectively 49,820 20,162
Related party receivables -- 53,500
Prepaid expenses 175 175
------------ ------------
Total current assets 80,559 650,261
Property and equipment, net 137,765 20,150
------------ ------------
Total assets $ 218,324 $ 670,411
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
Current liabilities
Line of credit $ 400,000 $ 400,000
Current portion of debt 1,031,800 --
Payable to related parties 88,556 142,059
Accounts payable 107,698 10,000
Accrued liabilities 56,187 78,192
------------ ------------
Total current liabilities 1,684,241 630,251
Long-term debt 1,204,750 1,217,750
------------ ------------
Total liabilities 2,888,991 1,848,001
Shareholders' deficit
Common stock - $0.001 par value; 50,000,000 shares authorized, 11,256,111
and 11,111,111 shares issued and outstanding at
June 30, 2000 and December 31, 1999, respectively 11,256 11,111
Additional paid-in capital (deficit) 60,008 (9,111)
Receivable for the purchase of equity (2,000) (2,000)
Accumulated deficit (2,739,931) (1,177,590)
------------ ------------
Total shareholders' deficit (2,670,667) (1,177,590)
------------ ------------
Total liabilities and shareholders' deficit $ 218,324 $ 670,411
============ ============
</TABLE>
See notes to interim financial statements.
4
<PAGE> 5
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 JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Revenues $ 87,485 $ 32,902
Operating expenses (951,407) (87,454)
------------ ------------
Operating loss (863,922) (54,552)
Other income 77 --
Interest expense (45,660) (8,805)
------------ ------------
Net loss $ (909,505) $ (63,357)
============ ============
Net loss per common share - basic and diluted $ (0.08) $ (0.01)
============ ============
Weighted-average number of common shares outstanding - basic
and diluted 11,112,704 11,111,111
============ ============
</TABLE>
See notes to interim financial statements.
5
<PAGE> 6
ECLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Revenues $ 135,499 $ 99,436
Operating expenses (1,608,226) (168,008)
------------ ------------
Operating loss (1,472,727) (68,572)
Other income 575 --
Interest expense (92,190) (17,436)
------------ ------------
Net loss $ (1,564,342) $ (86,008)
============ ============
Net loss per common share - basic and diluted $ (0.14) $ (0.01)
============ ============
Weighted-average number of common shares outstanding - basic
and diluted 11,111,908 11,111,111
============ ============
</TABLE>
See notes to interim financial statements.
6
<PAGE> 7
ECLICKMD, INC. AND SUBSIDIARIES
(Formerly Link.com, Inc. and Subsidiaries)
(Formerly Center Star Gold Mines, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net loss $ (1,564,342) $ (86,008)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation 6,069 18,073
Provision for doubtful accounts 13,875 --
Changes in operating assets and liabilities
Accounts receivable - trade (59,362) (1,799)
Prepaid expenses -- 2,437
Accounts payable 99,699 (1,537)
Accrued liabilities (22,962) 36,961
------------ ------------
Cash flows used in operating activities (1,527,023) (31,873)
Cash flows from investing activities
Purchases of property and equipment (37,634) (779)
------------ ------------
Cash flows used in investing activities (37,634) (779)
Cash flows from financing activities
Payments on long-term debt -- (11,347)
Borrowings on long-term debt 838,800 --
Proceeds from related parties 126,497 41,750
Advances to related parties -- (2,000)
Payments received on advances to related parties 53,500 --
Bank overdraft -- 3,092
------------ ------------
Cash flows provided by financing activities 1,018,797 31,495
------------ ------------
Net increase (decrease) in cash (545,860) (1,157)
Cash, beginning of period 576,424 7,283
------------ ------------
Cash, end of period $ 30,564 $ 6,126
============ ============
Supplemental disclosures for cash flow information: Cash paid during the period
for:
Interest $ 105,073 $ --
============ ============
Income taxes $ -- $ --
============ ============
Non-cash investing and financing activities:
Purchase of Health Tech, Inc. with equity $ 69,264 $ --
============ ============
Equity issued in reverse merger transaction $ -- $ 2,000
============ ============
</TABLE>
See notes to interim financial statements.
7
<PAGE> 8
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 June 30, 2000, and for the three and six months ended
June 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 six months ended June 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
8
<PAGE> 9
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.
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. SHORT TERM DEBT
From January to June 2000, the Company issued an aggregate amount of $1,031,800
of convertible notes payable to approximately 10 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 net operating assets of $97,537. The acquisition has been
accounted for under the purchase method of accounting.
Unaudited pro forma financial information for the three and six months ended
June 30, 2000 and 1999 as though the acquisition had occurred January 1, 1999 is
as follows:
<TABLE>
<CAPTION>
2000 1999
----------------------------- -----------------------------
3 months 6 months 3 months 6 months
ended ended ended ended
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 108,735 $ 177,999 $ 77,759 $ 189,150
============ ============ ============ ============
Net income (loss) $ (941,381) $ (1,626,361) $ (132,942) $ (225,178)
============ ============ ============ ============
Basic earnings (loss) per share $ (0.08) $ (0.15) $ (0.01) $ (0.02)
============ ============ ============ ============
</TABLE>
9
<PAGE> 10
7. SUBSEQUENT EVENT
During the third quarter of 2000, convertible debentures representing
approximately $1,045,000 elected to convert at $1.75 per share into
approximately 600,000 shares of the Company's common stock.
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 charged from "Link.com, Inc." to "eClickMD,
Inc;"
b) The Company's capital stock was increased to 65,000,000 shares; and
c) A series of Company "blankcheck" preferred stock consisting of
15,000,000 preferred shares was established.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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 import, 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 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 June 30, 2000 Compared to Three Months Ended June 30, 1999
Revenues for the three months ended June 30, 2000 were $87,485 compared
to $32,902 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 major home
health agencies after a number of its clients closed in fiscal
11
<PAGE> 12
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 $951,407 for the three months ended June 30,
2000 compared to $87,454 for the three months ended June 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 June 30, 2000 was $45,660
compared to $8,805 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.
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999
Revenues for the six months ended June 30, 2000 were $135,499 compared
to $99,436 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 $1,608,226 for the six months ended June 30,
2000 compared to $168,008 for the six months ended June 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 six months ended June 30, 2000 was $92,190
compared to $17,436 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 $1.2 million in long-term
convertible debentures to increase the marketing and visibility of its core
product, DocLink. In March 2000, the Company raised $225,000 in the form of a
convertible note due in ninety days. Also, in the quarter ended June 30, 2000,
the Company raised approximately $807,000 in similar 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 and from operations provided the funding for the
period ended June 30, 2000. As of July 31, 2000, approximately 85% of the
individual debenture holders had agreed to convert these notes 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
which is currently
12
<PAGE> 13
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 were not able to raise enough cash
to complete these goals, the outcome would 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.
13
<PAGE> 14
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to a Written Consent in Lieu of Special Meeting of Shareholders, dated
May 26, 2000, the following actions were taken with 7,989,061 (representing
approximately 72% of the outstanding voting capital stock of the Company) shares
voting in favor of such actions:
a) The Company's name was changed from "Link.com, Inc." to
"eClickMD, Inc;"
b) The Company's capital stock was increased to 65,000,000
shares; and
c) A series of Company "blankcheck" preferred stock consisting of
15,000,000 preferred shares was established.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
10.1 Agreement for Purchase of Assets dated February 29, 2000 between LURO
Associates, L.L.C. and Link.com, Inc.
27.1 Financial Data Schedule
b) REPORTS ON FORM 8-K
None.
14
<PAGE> 15
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: August 14, 2000 By: /s/ M. ROBERT RICE
---------------------------------------------
M. Robert Rice, President and Chief Executive
Officer (Principal Executive
Officer)
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.1 Agreement for Purchase of Assets dated February 29, 2000 between LURO
ASSOCIATES, L.L.C. and Link.com, Inc.
27.1 Financial Data Schedule
</TABLE>
