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 March 31, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to___________
Commission file number 0-5186
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OCG TECHNOLOGY, INC.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 13-2643655
- -------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
450 West 31st Street, New York, New York 10001
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(Address of principal executive offices)
(212) 967-3079
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(Issuer's telephone number)
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(Former name, address and former 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. [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Shares Outstanding at May 11 , 1998
- ----------------------------- -----------------------------------
Common Stock ($.01 par value) 29,833,724 Shares
<PAGE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
INDEX
PART I. - FINANCIAL INFORMATION PAGE NUMBER
Consolidated Condensed Balance Sheets
March 31, 1998 and June 30, 1997 1
Consolidated Condensed Statements of Loss for the
Three and Nine Months Ended March 31, 1998 and 1997 2
Consolidated Condensed Statements of Cash Flow for
the Nine Months Ended March 31, 1998 and 1997 3
Notes to Consolidated Condensed Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
<PAGE>
<TABLE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
March 31, 1998 JUNE 30, 1997
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 716,261 $ 167,996
Receivables, trade 44,643 87,963
Demand notes receivable 0 123,500
Other current assets 4,014 8,825
----------- ------------
Total current assets 764,918 388,284
Property and equipment, net of accumulated
depreciation of $432,576 $353,122 136,492 194,835
Proprietary technology, net of accumulated
amortization of ($2,362,026) ($1,879,863) 933,579 1,314,647
Other assets 359,487 117,139
------------ ------------
Total assets $ 2,194,476 $ 2,014,905
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 96,950 $ 166,944
Note Payable - related party 11,344 11,344
Due to Officer (non-interest bearing) 15,121 15,121
------------ ------------
Total current liabilities 123,415 193,409
------------ ------------
Shareholders' equity: (Note 4)
Preferred stock $.10 par value, Series E 10,000 10,000
Common stock $.01 par value 279,127 245,152
Additional paid-in capital 23,089,328 21,521,150
Deficit (21,010,394) (19,863,306)
Subscription receivable (234,500) (29,000)
------------ ------------
2,133,561 1,883,996
Less treasury stock, at cost (62,500) (62,500)
------------ ------------
Total shareholders' equity 2,071,061 1,821,496
------------ ------------
Total liabilities and shareholders' equity $ 2,194,476 $ 2,014,905
============ ============
<FN>
See accompanying notes to consolidated condensed financial statements
</TABLE>
<PAGE>
1
<TABLE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED MARCH 31, NINE MONTHS ENDED MARCH 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenue:
Sales $ 207,328 $ 245,760 $ 609,002 $ 639,203
---------- ---------- ------------ ----------
Costs and expenses:
Cost of sales 114,413 78,873 237,554 240,363
Marketing, general and
administrative 629,028 392,830 1,521,824 1,216,391
Interest - net (3,219) - (3,289) -
---------- ---------- ------------ ----------
Total Expenses 740,222 471,703 1,756,089 1,456,754
---------- ---------- ------------ ----------
Net Income (Loss) ($532,895) ($225,943) ($1,147,088) ($817,551)
========== ========== ============ ==========
Weighted average number of
shares outstanding
during period 27,171,620 24,256,759 25,602,390 23,543,898
========== ========== ============ ==========
Loss per Common Share ($0.02) ($0.01) ($0.04) ($0.03)
========== ========== ============ ==========
<FN>
See accompanying notes to consolidated condensed financial statements
</TABLE>
2
<PAGE>
<TABLE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED MARCH 31,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($1,147,088) ($817,551)
------------ ----------
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 562,673 556,309
Issuance of stock and warrants for services 93,000 52,625
Amortization of unearned compensation 0 10,313
Amortization of Black Scholes valuation 114,754 0
Changes in assets and liabilities
(Increase) decrease in receivables 43,320 (48,003)
(Increase) decrease in demand notes 123,500 (82,000)
(Increase) decrease in other current assets 4,811 (3,188)
(Increase) decrease in property and equipment (21,112) (108,911)
(Increase) decrease in Proprietary Technology (101,092) (166,885)
(Increase) decrease in other assets less
Black Scholes value (77,907) (1,480)
(Decrease) in accounts payable and accrued expenses (69,994) (73,824)
------------ ----------
Total adjustments 671,952 134,956
------------ ----------
Net cash used in operating activities (475,135) (682,595)
------------ ----------
Cash flows from financing activities:
Increase (decrease) in due to shareholders 0 22,000
(Increase) decrease in subscription receivable (205,500)
Proceeds from issuance of common stock 1,228,900 672,205
------------ ----------
Net cash changes from financing activities 1,023,400 694,205
------------ ----------
Net increase (decrease) in cash 548,265 11,610
Cash, beginning of period 167,996 318,088
------------ ----------
Cash, end of period $ 716,261 $ 329,698
============ ==========
<FN>
See accompanying notes to consolidated condensed financial statements
</TABLE>
3
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial
position as of March 31, 1998 and the results of operations for the three and
nine months ended March 31, 1998 and 1997 and the statements of cash flows for
the nine months ended March 31, 1998 and 1997. The June 30, 1997 balance sheet
has been derived from the Company's audited financial statements.
The results of operations for the nine months ended March 31, 1998 are
not necessarily indicative of the results to be expected for the full year.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's latest annual report on Form
10-KSB.
The accompanying consolidated financial statements have been prepared on
a going concern basis which contemplates continuity of operations and
realization of assets and liquidation of liabilities in the ordinary course of
business. Because of significant operating losses, the Company's ability to
continue as a going concern is dependent upon its ability to obtain sufficient
additional financing and, ultimately, upon future profitable operations. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue in existence.
2. Earnings per share is computed using the weighted average number of
shares outstanding during the periods. The effect of warrants outstanding
would be anti-dilutive.
3. Unearned compensation decreased as a result of amortizing the cost
arising from the issuance of shares of the Company's common stock for
services.
4. Other assets increased due primarily to the value assigned under a
Black Scholes calculation to warrants issued for marketing and corporate
services to be rendered and rent and other services. This value will be
amortized over the life of the services rendered .
5. Capital Changes:
During the nine months ended March 31, 1998, for services rendered in
accord with the terms of a consulting agreement, warrants were issued to
purchase a total of 90,000 shares of the Company's common stock at exercise
prices ranging between $0.49 to $0.77 per share with exercise dates of said
warrants expiring between July 31, 2000 to March 31, 2001. The Company
reflected an expense of $6,000 for each of the three month periods ended
September 30, 1997, December 31, 1997 and March 31, 1998.
During the three month periods ended September 30,1997, December 31, 1997
and March 31, 1998, pursuant to the terms of an agreement for public relations
services to be rendered to the Company, the Company issued 1,500 shares, 1,500
shares and 500 shares, respectively of its common stock for services rendered
to date. The Company reflected an expense of $1,500, $1,500 and $500,
respectively, in its Statement of Operations for each three month period.
This agreement has been terminated.
During the three months ended December 31, 1997 the Company issued 56,250
shares of the Company's common stock for marketing services rendered and to be
rendered. The Company recorded a prepaid asset for $38,700 (based on the
market price of the Company's common stock at date of issue) which will be
amortized over the term of the estimated service benefit.
During the six months ended December 31, 1997, for services rendered in
accord with the terms of a consulting agreement, the Company issued 10,000
warrants to acquire 10,000 shares of the Company's common stock at an exercise
price of $1.00 per share which expire October 31, 2001. On the date of issue
the quoted market price of the Company's common stock was less than the per
share exercise price of the warrants. These warrants have been valued under a
Black Scholes calculation and will be amortized over the term of the
agreement.
On February 11, 1998, 1,212,715 shares of the Company's common stock
were sold for $542,150 ($0.45 per share) pursuant to a private placement,
which was exempt from registration under Section 4(6) of the Securities Act of
1933, to individuals, all of whom were "accredited investors". These shares
bear a restrictive legend and are not registered. Due to the impact of this
transaction on the Company's financial position, this transaction was deemed
to be material and accordingly the sale of 1,212,715 shares for $542,150 was
reflected retroactively in the December 31, 1997 financial statements in cash
and stockholders' equity. The total private placement is for a maximum of
2,500,000 shares.
During the three months ended March 31, 1997 the Company's Board of
Directors approved the issuance of 780,000 warrants to acquire 780,000 shares
of the Company's common stock at an exercise price of $0.65 which expire March
8, 2001. These warrants were issued to Officers and Directors of the Company.
On the date of issue the quoted market price of the Company's common stock was
less than the per share exercise price of the warrants.
During the three months ended March 31,1998, pursuant to the terms of an
agreement with a financial consultant, the Company issued 150,000 warrants to
acquire 150,000 shares of the Company's common stock at an exercise price of
$0.65 which expire March 8, 2001. On the date of issue the quoted market price
of the Company's common stock was less than the per share exercise price of
the warrants. These warrants have been valued under a Black Scholes
calculation and will be amortized over the term of the agreement.
During the three months ended March 31,1998, in lieu of rent and other
services the Company issued 200,000 warrants to acquire 200,000 shares of the
Company's common stock at an exercise price of $0.65 which expire March 8,
2001. On the date of issue the quoted market price of the Company's common
stock was less than the per share exercise price of the warrants. These
warrants have been valued under a Black Scholes calculation and will be
amortized over the term of the agreement.
During the three months ended December 31, 1997 warrants were exercised
to purchase 1,225,000 shares of the Company's common stock for $389,250 in
demand notes and the shares were issued. The demand notes were issued by
several individuals including four Officers /Directors to the Company, are
collateralized by common stock of the Company owned by these individuals and
bear interest at the prime rate. As of March 31, 1998 $234,500 remained
unpaid.
On December 26, 1997, 850,000 shares of the Company's common stock were
sold for $297,500 ($0.35 per share) in a private placement, which was exempt
from registration under Section 4(6) of the Securities Act of 1933, to
individuals, all of whom were "accredited investors". These shares bear a
restrictive legend and are not registered.
During the three months ended December 31, 1997 the Company issued 50,000
shares of the Company's common stock for marketing services rendered and to be
rendered. The Company recorded a prepaid asset for $32,800 (based on the
market price of the Company's common stock at date of issue) which will be
amortized over the term of the estimated service benefit.
During the three months ended December 31, 1997 the Company's Board of
Directors approved the issuance of 447,000 warrants to acquire 447,000 shares
of the Company's common stock at an exercise price of $0.75 which expire
October 24, 1999. These warrants were issued to employees of the Company. On
the date of issue the quoted market price of the Company's common stock was
less than the per share exercise price of the warrants.
During the three months ended December 31,1997, pursuant to the terms of
two agreements with financial planning and public relations consultants, the
Company issued 350,000 warrants to acquire 100,000 shares and 250,000 shares
of the Company's common stock at an exercise price of $0.90 and $0.70,
respectively, which expire November 1, 1999 and December 15, 1999,
respectively. On the date of issue the quoted market price of the Company's
common stock was less than the per share exercise price of the warrants. These
warrants have been valued under a Black Scholes calculation. During the three
months ended March 31, 1998, upon cancellation of one of these agreements,
175,000 warrants (exercise price $0.70) were canceled and the Black Scholes
deferred valuation was charged against the Statement of Income.
During the three months ended December 31, 1997 the Company issued
220,000 warrants to acquire 220,000 shares of the Company's common stock at an
exercise price of $0.72 which expire November 1, 2000. These warrants were
issued to an Officer at the time of his employment. On the date of issue the
quoted market price of the Company's common stock was less than the per share
exercise price of the warrants. During the three months ended March 31, 1998
the Officer terminated his employment and 70,000 warrants were canceled.
6.Material Subsequent Event.
On April 5, 1998, warrants for 1,921,000 shares were exercised for
$517,750 of demand notes receivable. This transaction was not reflected in the
March 31, 1998 financial statements.
<PAGE 7>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A SUMMARY OF INCREASES (DECREASES) IN THE ITEMS INCLUDED IN
THE CONSOLIDATED STATEMENTS OF LOSS IS SHOWN BELOW:
Results of Operations
- ---------------------
Total revenues decreased $38,432 and $30,201 for the three and nine months
ended March 31, 1998 as compared to the same periods for 1997 primarily as a
result of a decrease in the three month revenues of Mooney-Edwards
Enterprises, Inc. ("MIS"), a subsidiary of the Company and a decrease in the
nine month revenues of Prime Care Systems, Inc. ("PSI"), a subsidiary of the
Company. Cost of sales increased by $35,540 and decreased by $2,809 for the
three and nine months ended March 31, 1998 as compared to the same periods for
1997. The sales of OCG Technology, Inc. ("OCGT"), PSI and MIS were $0,
$15,293 and $593,025 respectively, for the nine months ended March 31, 1998.
Marketing, general and administrative expenses increased $236,198 and $305,433
for the three and nine months ended March 31, 1998 as compared to the same
periods for 1997. OCGT's expense increased in the three and nine months ended
March 31, 1998, due to increased corporate expenses, as compared to the same
periods in 1997. PSI expenses increased due to increased salaries, sales
expenses and amortization of capitalized costs of the Windows version of the
PrimeCare Patient Management System in the three and nine months ended March
31, 1998 as compared to the same periods in 1997.
Liquidity and Capital Resources
- -------------------------------
At March 31, 1998 the Company had a current ratio of 6.20 to 1 compared to
2.97 to 1 as of March 31, 1997. Although the net loss from operations for the
nine months ended March 31, 1998 was $1,147,088 most of the loss resulted from
non-cash charges of $770,427, which accounted for 67% of the total loss from
operations. The Company has experienced recurring losses from operations and
has been unable to provide sufficient working capital from operations and has
relied significantly on the sale of equity interests in the Company, and the
exercise of warrants and loans from shareholders to fund its operations. The
Company's auditors have included an explanatory paragraph regarding the
ability of the Company to continue as a "going concern".
Cash on hand and accounts receivable were $760,904 at March 31, 1998. The
Company also has $234,500 of demand notes due principally from officers and
directors related to their exercise of warrants. In addition, the Company has
Cardiointegraph equipment, in the final stages of manufacture, which will be
available to lease on a fee for service basis. In the past, the Company's
principal means of overcoming its cash shortfalls from operations was from the
sale of the Company's common stock. During the nine months ended March 31,
1998, the Company raised $1,228,900 through the sale of equity interests and
the exercise of warrants. Of this amount, $389,250 was from the exercise of
warrants and $839,650 was from the sale of stock (equity interests). The
Although, in the past, the Company has been able to provide working capital
through the sale of equity interests in the Company and through the exercise
of warrants, there can be no assurances that the Company will succeed in its
efforts.
As of May 16, 1994, PrimeCare Systems, Inc. ("PSI") was acquired by the
Company. PSI owns all right, title and interest in the PrimeCare(TM) Patient
Management System (the "PrimeCare(TM) System"), which is protected by
copyrights. The PrimeCare(TM) System comprises a patient-centered integrated
medical interview, encounter documentation, patient education and physician
reference materials, and chart creation system which, in turn, provides an
uncomplicated, standardized mechanism for collecting and documenting all
relevant clinical encounter data at minimal cost and time. The PrimeCare(TM)
System also provides a data base and means for clinical and outcomes research
as well as a means for utilization review and quality assurance audits. The
Company has completed development of the Windows 95/NT version the
PrimeCare(TM) System and has also completed an interface which enables the
PrimeCare(TM) System to communicate with other systems used in medical
facilities. This provides a method for these systems to transfer information
to the System, such as patient demographics and appointment scheduling. The
Company has completed the interface capabilities to enable the PrimeCare(TM)
System to transfer information (such as billing information including E&M
codes, ICD-9 codes and CPT codes) to these other systems. The Company is in
the process of developing a means to determine the proper E&M Coding. The
Company has ceased supporting its DOS version of the PrimeCare(TM) System. The
medical content of the System is also continually updated. On September 15,
1995, the Company entered into an agreement with the Mount Sinai School of
Medicine ("MSSM") which provides for the MSSM to assume the task of updating
and enhancing the medical content of the System.
The Company has commenced marketing the Windows 95/NT version of the
PrimeCareTM System. The marketing of the PrimeCareTM System was initiated in
the northwest Florida area through Medical Information Systems ("MIS").
Installations were limited initially to two sites to enable both PSI and MIS
to review and evaluate the procedures established for installation and
training. This initial commercial marketing of the PrimeCareTM System has been
completed successfully. In the first medical practice in which the PrimeCareTM
System was installed efficiency markedly improved. The practice reported that
the number of patients seen during normal office hours increased two patients
per hour through use of the PrimeCareTM System . At the same time, the
documentation of the patient record and the quality of care greatly improved.
This was substantiated during a periodic review of the medical records of this
medical practice, conducted by a large nationally known managed health care
plan (the "Plan"), an insurance carrier with whom the physician has
contracted. The Plan's reviewer evaluated the medical records maintained by
this medical practice and gave a score of 100, based on a scale of 0 to 100.
The reviewer's comments stated: "There has been a recent improved
documentation product called PrimeCare that will greatly improve the quality
of care and continuity of care for the patients."
The Company markets the PrimeCare(TM) System as a service, on a pay for use
basis, with a charge of $2.00 per patient visit. This charge per patient visit
has been increased from $1.50. This marketing method eliminates a significant
financial commitment to purchase the software, plus monthly maintenance
charges for updates, and ties the cost directly to use. The financial
benefits derived by the physician from use of the PrimeCare(TM) System exceed
the $2.00 cost per patient visit. The Company has enhanced its software to
enable the System to interface with any compatible medical billing software.
In April of 1998, the Company completed development of software, the
"CodeComplierTM", that offers physicians automated computation of proper
coding levels under Medicare's new Evaluation and Management ("E&M") coding
mandates. This is an important benefit because under the new mandates
improperly documented coding may expose even honest and ethical physicians to
demands for returned reimbursements, fines, and, in extreme cases, criminal
charges of fraud. Designed to be used in conjunction with the Company's
PrimeCareTM System, CodeComplierTM takes the guess work out of E&M
compliance. As each item of patient information is entered into and
collected by the PrimeCareTM System, CodeComplierTM organizes the data in the
proper classification and automatically calculates the applicable E&M code on
the fly. The Company intends to market the CodeComplierTM as a service, on a
pay for use basis, with a charge of $1.00 per patient visit. Since the
CodeComplierTM is integrated with the PrimeCareTM System, this marketing
method eliminates a significant financial commitment to purchase additional
hardware and the software, plus pay monthly maintenance charges for updates,
thus tying the cost directly to use. The financial benefits derived by the
physician from use of the CodeComplierTM exceed the $1.00 cost per patient
visit. The Company plans to begin shipping the CodeComplier software
commencing June 1, 1998.
According to the American Medical Association, there are over 650,000
physicians in the U.S., creating a very large potential market for the
PrimeCare System and the CodeComplier. The Company estimates that as many as
250,000 of these physicians could use both products routinely. It is estimated
that the average number of patient visits per month for a primary care
physician is between 500 and 600. Assuming 500 patient visits per month at a
combined total fee of $3.00 per patient visit, each 100 physicians using the
PrimeCare System in conjunction with the CodeComplier could generate revenues
of $1,800,000 per year for the Company. However, no assurances can be given
that a significant number of physicians will contract for and use the
PrimeCareTM System.
Marketing and sales plans have now been completed regarding a full product
roll-out. The marketing of the PrimeCareTM System will be done primarily
through the following business models:
(a) direct sales to large at-risk healthcare entities
(b) recruitment of value added resellers and authorized dealers
(c) private labeling opportunities
Several value added resellers, who currently sell, install, and service
medical office and billing systems to medical facilities, market the PrimeCareT
M System. Additional staff has been hired in these business areas.
In addition, the PrimeCareTM System will shortly be introduced into several
additional venues for evaluation purposes. These prestigious sites have been
chosen due to:
(a) a high managed care component of the patient mix
(b) high Medicare/Medicaid service area
(c) good cross section of multi-speciality medical professionals.
OCG will be meeting with the following company profiles during the ensuing
months to begin discussions relating to alliance/partnering opportunities:
(a) data communication and networking companies
(b) physician practice management system vendors
(c) physician clinical patient record system vendors
(d) database management companies
However, no assurances can be given that the Company's marketing plan will
succeed.
The Company's wholly owned subsidiary, Mooney-Edwards Enterprises, Inc.
d/b/a Medical Information Systems ("MIS"), a Florida corporation was acquired
by the Company on June 25, 1992. MIS has been a growing operation in a segment
of the medical field. MIS markets computer systems to providers of medical
services. The packages include hardware, software, staff training and provides
for an annual service contract. In addition to the basic accounts receivable
and insurance billing applications, MIS can provide the offices with
appointment scheduling, accounts payable, general ledger, payroll and word
processing programs. The service contracts provide for ongoing software
upgrades, continuing education and system maintenance.
The turnkey packages sold by MIS primarily use the "Medical Manager"
("MM") software program. MIS is the area dealer for MM which is reputed to be
the most widely used software package in the medical industry. As stated
above MIS is now also marketing the PrimeCare(TM) System to its current
customers and other medical facilities.
In the past, the Company sold its Cardiointegraph ("CIG"), a proprietary heart
diagnostic instrument for the early detection of coronary heart disease,
through medical distributors, a sales and marketing method employed by other
medical equipment manufacturers. Although Cardiointegraphs were sold for ten
consecutive fiscal years and the end user purchasers (i.e., physicians and
corporate and governmental medical departments) appear to find the unit
useful, the CIG business segment has been unable to generate sufficient
revenues to fund its operations or to operate at a profit. The Company
believes that lack of universal reimbursement for the CIG has hindered its
attempt to sell the CIG.
The Company believes that marketing the CIG technology as a service, with a
minimal fee charged to the physician per CIG generated, may free the physician
from the general reluctance of physicians to purchase medical diagnostic
equipment not reimbursed by Medicare.
The Company licensed its CIG technology to Compumed, Inc. ("CMPD") to enable
CMPD to offer the CIG as a service to subscribers to CMPD's service which
interprets electrocardiographic (EKG) signals transmitted telephonically to
CMPD's central computer. During March 1994, CMPD commenced offering the CIG
service to CMPD's customers. To date, the Company has not received significant
revenues from CMPD for the service. The Company is totally dependant upon CMPD
for the marketing effort to CMPD's customers. Based on the experience to date,
the Company does not believe that the service will be marketed successfully by
CMPD.
The Company believes that it could provide sufficient working capital from
operations through marketing the Window 95/NT version of the PrimeCareTM
System and expanding the operations of MIS.
Currently, the Company has no lines of credit and has no material commitments
for capital expenditures outstanding.<PAGE>PART II - OTHER INFORMATION
<PAGE 11>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. - Financial Data Schedule
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter for which
this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
OCG TECHNOLOGY, INC.
BY /s/Edward C. Levine
-------------------
EDWARD C. LEVINE,
PRESIDENT
BY /s/Erich W. Augustin
--------------------
ERICH W. AUGUSTIN,
EXECUTIVE VICE PRESIDENT
(PRINCIPAL FINANCIAL OFFICER)
DATED: May 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 716,261
<SECURITIES> 0
<RECEIVABLES> 44,643
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 764,918
<PP&E> 136,492
<DEPRECIATION> 432,576
<TOTAL-ASSETS> 2,194,476
<CURRENT-LIABILITIES> 123,415
<BONDS> 0
0
10,000
<COMMON> 279,127
<OTHER-SE> 1,781,934
<TOTAL-LIABILITY-AND-EQUITY> 2,194,476
<SALES> 609,002
<TOTAL-REVENUES> 609,002
<CGS> 237,554
<TOTAL-COSTS> 1,756,089
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (3,289)
<INCOME-PRETAX> (1,147,088)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,147,088)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,147,088)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
