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 December 31, 1999
[ ] 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
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(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 February 1, 2000
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Common Stock ($.01 par value) 31,311,557 Shares
<PAGE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
INDEX
PAGE NUMBER
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PART I. - FINANCIAL INFORMATION
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Consolidated Condensed Balance Sheets
December 31, 1999 and June 30, 1999 1
Consolidated Condensed Statements of Loss for
the Three Months and Six Months Ended
December 31, 1999 and 1998 2
Consolidated Condensed Statements of Cash Flow for
the Six Months Ended December 31, 1999 and 1998 3
Notes to Consolidated Condensed Financial Statements 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. - OTHER INFORMATION
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Item 4. Submission of Matters to a Vote of Security Holders 9
Item 6. Exhibits and Reports on Form 8-K 9
<PAGE>
<TABLE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
DECEMBER 31, 1999 JUNE 30, 1999
ASSETS (UNAUDITED) (AUDITED)
<S> <C> <C>
Current Assets:
Cash $ 71,310 $ 103,408
Receivables, trade 18,908 8,468
Receivable, Sale of business 112,557 -
Other current assets 144,661 193,979
Net assets held for sale - 30,421
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Total current assets 347,436 336,276
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Property and equipment, net of accumulated depreciation of
($511,559) ($482,020) 103,225 123,023
Other assets 31,850 3,180
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Total assets $ 482,511 $ 462,479
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 27,952 $ 53,591
Notes Payable 10,500 21,844
Due to Shareholder (non-interest bearing) - 15,121
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Total current liabilities 38,452 90,556
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Shareholders' equity: (Note 4)
Preferred stock $.10 par value, Series E 10,000 10,000
Common stock $.01 par value 313,115 305,815
Additional paid-in capital 24,168,338 23,951,577
Deficit (23,623,894) (23,471,969)
Subscription receivable (361,000) (361,000)
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506,559 434,423
Less treasury stock, at cost (62,500) (62,500)
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Total shareholders' equity 444,059 371,923
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Total liabilities and shareholders' equity $ 482,511 $ 462,479
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See accompanying notes to consolidated condensed financial statements
1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenue:
Sales $ 25,500 $ 7,485 $ 30,000 $ 10,485
---------- ---------- ---------- ----------
Costs and expenses:
Marketing, general and
administrative 165,691 232,362 339,506 501,680
Depreciation and
amortization 14,625 39,239 29,539 67,924
Product development costs 103,382 - 215,379 -
Interest - net (534) (1,906) (1,065) (5,222)
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Total Expenses 283,164 269,695 583,359 564,382
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Net Income (Loss) $ (257,664) $ (262,210) $ (553,359) $ (553,897)
========== ========== ========== ==========
Weighted average number of
shares outstanding
during period 30,870,898 29,828,224 30,784,453 29,828,224
========== ========== ========== ==========
Loss per Common Share $(0.01) $(0.01) $(0.02) $(0.02)
========== ========== ========== ==========
See accompanying notes to consolidated condensed financial statements
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED DECEMBER 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(185,324) $ (491,300)
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Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 29,539 67,924
Issuance of stock and warrants for services 103,687 4,000
Amortization of Black Scholes valuation 51,018 21,548
Changes in assets and liabilities
(Increase) decrease in receivables (122,997) (47,412)
(Increase) decrease in demand notes - 110,000
(Increase) decrease in other current assets
less Black Sholes value 28,722 106,325
(Increase) decrease in property and equipment (6,956) (18,886)
(Increase) decrease in Proprietary Technology - (97,352)
(Increase) decrease in other assets less
Black Scholes value (28,670) (31,293)
(Decrease) in accounts payable and accrued expenses (33,193) (42,261)
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Total adjustments 21,150 72,593
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Net cash used in operating activities (164,174) (418,707)
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Cash flows from financing activities:
(Increase) decrease in subscription receivable - 62,500
Proceeds from issuance of common stock 132,076 -
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Net cash changes from financing activities 132,076 62,500
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Net increase (decrease) in cash (32,098) (356,207)
Cash, beginning of period 103,408 475,323
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Cash, end of period $ 71,310 $ 119,116
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See accompanying notes to consolidated condensed financial statements
</TABLE>
3
<PAGE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of the Company, (which, together with its subsidiaries,
unless the context otherwise requires, is referred to as the "OCGT"), 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 December 31, 1999 and the results
of operations for the three and six months ended December 31, 1999 and 1998
and the statements of cash flows for the three months ended December 31, 1999
and 1998. The June 30, 1999 balance sheet has been derived from OCGT's audited
financial statements.
The results of operations for the six months ended December 31, 1999 are
not necessarily indicative of the results to be expected for the full year.
While OCGT 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 OCGT'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, OCGT'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 OCGT 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. Other assets decreased due primarily to the amortization of the value
previously assigned under a Black Scholes calculation to warrants issued for
marketing and corporate services to be rendered and rent and other services.
This value continues to be amortized over the life of the services rendered .
4. Capital Changes:
During the six months ended December 31, 1999, for services rendered in
accord with the terms of a consulting agreement, warrants were issued to
purchase a total of 30,000 shares of OCGT's common stock at exercise prices
ranging between $0.40 to $0.42 per share with exercise dates of said warrants
expiring between July 1 to September 1, 2002. OCGT reflected a total expense
of $12,000 for the three month period ending December 31, 1999.
During the six months ended December 31, 1999, 380,000 shares of OCGT's
common stock were sold for $95,000 ($0.25 per share).
During the three months ended December 31, 1999, 100,000 shares of
OCGT's common stock were issued as compensation for services to be performed
pursuant to an Internet services agreement during the course of calendar year
2000. OCGT recorded a prepaid asset for $42,187 (based on the market price at
date of issue) which will be amortized over the term of the estimated service
benefit.
During the three months ended December 31, 1999, 100,000 shares of
OCGT's common stock were issued as compensation for services to be performed
during the course of calendar year 2000 pursuant to a financial services
agreement. OCGT recorded a prepaid asset for $37,500 (based on the market
price at date of issue) which will be amortized over the term of the estimated
service benefit.
During the three months ended December 31, 1999, 150,000 shares of
OCGT's common stock were issued to retire debt in the amount of $37,374. The
creditor is the son of OCGTs President.
During the three months ended December 31, 1999 OCGT's Board of
Directors approved the issuance of warrants to acquire 50,000 shares of
OCGT's common stock at an exercise price of $0.40 which expire December 31,
2002. These warrants were issued to an employee of OCGT. On the date of issue
the quoted market price of OCGT's common stock was less than the per share
exercise price of the warrants.
5. Material Subsequent Event
On January 25, 2000, 160,000 shares of OCGT's common stock were sold
for $40,000 ($0.25 per share).
<PAGE>
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:
General
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The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere herein.
The following discussion contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and OCGT intends that such forward-looking
statements be subject to the safe harbors created thereby. These forward-looking
statements include predictions, estimates and other statements that involve a
number of risks and uncertainties While this outlook represents OCGT's current
judgment on the future direction of the business, such risks and uncertainties
could cause actual results to differ materially from any future performance
suggested herein.
OCGT has experienced recurring losses from operations and has relied on the sale
of equity interests in OCGT to fund its operations. If necessary, OCGT intends
to provide additional working capital through the sale of equity interests in
OCGT. Although, in the past, OCGT has been able to provide working capital
through the sale of equity interests in OCGT, there can be no assurances that
OCGT will succeed in its efforts, which creates a doubt about its ability to
continue as a going concern. The results of operations for prior periods is
based on OCGT's continuing operations.
Results of Operations
- ---------------------
Total revenues increased $18,015and $19,515for the three and six months ended
December 31, 1999 as compared to the same period for 1998 primarily as a result
of Internet revenues The sales of OCGT and PSI were $100 and $29,900
respectively, for the six months ended December 31, 1999.
Marketing, general and administrative expenses decreased $66,671 and $162,173
for the three and six months ended December 31, 1999 as compared to the same
period for 1998 due to a reduction in marketing expenses resulting from a shift
in marketing emphasis to Internet products and a change both in presentation
and in the accounting procedures. In prior years expenditures for Product
Development were accounted for as an asset and amortized over its estimated
useful life. As of June 30 1999, the policy was changed and thereafter, the
cost of Product Development was charged as an expense and appears as a separate
item on the statements of Operations.
Liquidity and Capital Resources
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At December 31, 1999 OCGT had a current ratio of 9 to 1 compared to 8.7 to 1 as
of December 31,1998. The net loss from operations for the six months ended
December 31, 1999 was $583,358 of which loss non-cash charges of $92,557
accounted for 16% of the total loss from operations. OCGT 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 OCGT, and the exercise of warrants and loans from
shareholders to fund its operations. OCGT's auditors have included an
explanatory paragraph regarding the ability of OCGT to continue as a "going
concern".
Cash on hand and accounts receivable were $202,775 at December 31, 1999. OCGT
also has $361,000 of collateralized demand notes receivable related to the
purchase of OCGT's common stock through the exercise of warrants. In the past,
OCGT's principal means of overcoming its cash shortfalls from operations was
from the sale of OCGT's common stock. During the six months ended December
31, 1999, 380,000 shares of the OCGT's common stock were sold for $95,000
($0.25 per share). Although, in the past, OCGT has been able to provide working
capital through the sale of equity interests in OCGT and through the exercise
of warrants, there can be no assurances that OCGT will succeed in its efforts.
Disposition of Assets. On August 2, 1999, pursuant to the terms of an Asset
Purchase Agreement, Mooney-Edwards Enterprises, Inc.("MIS"), a wholly owned
subsidiary of OCGT, sold substantially all of the assets, as of July 28, 1999,
to Medical Manager Southeast, Inc.("MM") and MM assumed substantially all of the
liabilities related to operations as of July 28, 1999 for a purchase price equal
to Three Hundred Fifty Thousand Dollars and 00/100 ($350,000) plus an amount
equal to the value of the net assets as of July 28, 1999 which is approximately
$96,262. The sale has been completed. The unpaid portion of the sales price,
$112,557 is reflected as a receivable.
Product and Marketing Overview. OCGT's revenues are primarily derived from
marketing the products, of its wholly owned subsidiary, PrimeCare Systems, Inc.
("PSI"), a Delaware corporation. (Hereafter "OCGT" shall mean OCGT and/or PSI as
the context requires). OCGT, through PSI, has developed, markets, updates and
expands the PrimeCareTM Patient Management System (the "PrimeCareTM System"),
PrimeCareOnTheWeb.com, YourOwnHealth.com, YourOwnDoctor.com and
DeniseAustin.com, all of which are protected by copyrights.
All of PSI's products are centered on all or parts of the PrimeCareTM System.
The PrimeCareTM System, an in-office PC based system, is a patient-centered,
interactive, computer program that brings efficiencies to the patient/physician
encounter while improving the standard of care and reducing costs. Patients
interact directly with the PrimeCareTM System, during what is usually waiting
time. A detailed patient history is obtained without taking any of the
physician's time. The designated staff member selects the appropriate
Questionnaire based upon the patient's chief complaint and/or symptom and enters
the patients vital signs. The patient is then seated at a computer and answers
complaint-specific questions by using just the number keys to indicate answers
that apply to them; no typing or computer skills are required. The software also
has bilingual capabilities, allowing Spanish-speaking patients to interact in
their preferred language. When the patient has completed the Questionnaire, the
PrimeCareTM System creates a Preliminary Report for the physician to review
before examining the patient. The Preliminary Report contains the patient's
current problems, medications and allergies, all positive and significant
negative subjective responses, vital signs and an alphabetical list of the
diagnostic possibilities with the patient's responses that triggered each
diagnostic possibility. By freeing up the time physicians would normally have to
spend asking patient history questions and recording responses, the PrimeCareTM
System permits physicians to see more patients and to spend more quality time
with them. The PrimeCareTM System is also easy for physicians to understand and
use . The same simple key stroke process lets the physician document the:
physical findings (normal and abnormal), assessment, treatment plan, prescribed
medications and patient education materials distributed. At the conclusion of
the encounter a final report of the visit, patient educational materials, and
prescriptions are printed for the patient.
The PrimeCareTM System: standardizes the patient record; assures consistency in
patient care; creates a patient database for clinical and outcomes research;
offers, both local and remote, means for utilization review and quality
assurance audits; improves the quality of care; increases efficiency and
productivity of the physician's practice; automatically generates a problem
list; incorporates patient care algorithms and clinical practice guidelines;
permits, both local and remote, on-line electronic retrieval of patient record
and hard copy print out with appropriate security controls; enables rapid
access to important patient data for clinical care; contains and provides
patient education, complaint oriented and medication specific; provides
physician reference materials.
The PrimeCare(TM) System uses the Windows 95/98/NT platforms. PSI's interfaces
enable the PrimeCare(TM) System to communicate with other practice management
systems used in medical facilities. This provides a method for these systems to
transfer information to the PrimeCare(TM) System, such as patient demographics
and appointment scheduling, and the PrimeCare(TM) System to transfer information
(such as billing information including E&M codes, ICD9 codes and CPT codes) to
these other systems.
The PrimeCare(TM) System has other enhancements and features which include:
(1) voice command recognition capability to enable physicians to use voice
commands instead of keystrokes or mouse clicks to document normal & abnormal
physical findings, the assessment, select tests, treatment plan, prescriptions,
drug interaction checks, patient education materials to be dispensed and
schedule follow-up visits. (2) a touch screen may be used by the patient
and physician instead of the key board, mouse or voice command recognition. All
keystrokes, mouse clicks or voice commands are duplicated by the touch screen
hardware and software. (3) The PrimeCareTM System uses either Microsoft's SQL
Server or Interbase, as a database. This expands the flexibility of the
PrimeCareTM System since it enables medical facilities that are using MS SQL
Server database for practice management systems and other software to add
PrimeCareTM without purchasing an additional database. Both databases support
distributed processing in local and wide area networks.
The principal markets for the PrimeCare(TM) System are ambulatory/outpatient
medical facilities, such as, primary care physicians, medical clinics and staff
health maintenance organizations.
The PrimeCare(TM) System is marketed through value added resellers
("VARs"), authorized dealers and direct sales. In addition, the PrimeCareTM
System and CodeComplierTM have been exhibited at selected health care industry
conventions as a component of the marketing and sales program. However, no
assurances can be given that the marketing plan will succeed.
The PrimeCareTM System is marketed as a service, on a pay for use basis, with
a maximum charge of $2.00 per patient visit. 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. Physician
users have stated that the financial benefits derived by the physician from use
of the PrimeCareTM System exceeds the cost per patient visit. According to the
American Medical Association, there are over 650,000 physicians in the U.S.
creating a very large potential market for the System. OCGT estimates that as
many as 250,000 of these physicians could use the PrimeCareTM System routinely.
OCGT has not identified any competitive patient management system which embodies
all the features of the PrimeCare(TM) System. However, other companies market
systems which may have some of the features of the PrimeCare(TM) System and some
companies market medical office products which perform different functions than
those performed by the PrimeCare(TM) System. To date, market penetration by both
PSI and its competitors has been very small.
OCGT has also developed software which computes the E&M code. Designed to be
used in conjunction with the PrimeCareTM System, CodeComplierTM takes the guess
work out of E&M compliance. As each item of information is entered into and
collected by the PrimeCareTM System during the patient encounter, the
CodeComplierTM organizes the data in the proper classification and using the
1997 HCFA guidelines, automatically calculates the applicable E&M code. It
totally eliminates the time and effort which would otherwise be required by
physician office personnel to complete this task. However, no assurances can
be given that OCGT's marketing plan will succeed.
PrimeCareTM Web Sites and Activities
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In response to the opportunities created by the development and growing consumer
acceptance of secure Internet communications, PSI now makes enhanced and
targeted components of its PrimeCare System available to physicians and health-
conscious consumers via the Web (e.g. www.PrimeCareOnTheWeb.com and
www.YourOwnHealth.com). OCGT has also expanded into Web Site design and hosting
(e.g. www.DeniseAustin.com ; www.YourOwnDoctor.com) and business-to-business
Internet licensing agreements which permit other sites to use selected portions
of the PrimeCare System via PSI's new dynamically generated Interactive Medical
Interview System. A description of these products, their financial potential
and cross promotional opportunities follows.
Internet Products Overview
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A very significant number of visitors to the Internet are consumers seeking
information concerning their health and fitness. As a result OCGT, through PSI,
now enables consumers to communicate with their physicians through its creation
of Internet products based on its PrimeCare System. The Internet products are
designed for both patient/consumer use and medical practice use.
OCGT maintains and operates a consumer Web Sites www.YourOwnHealth.com; a Site
accessible only by registered physicians through use of a unique passwords,
www.PrimeCareOnTheWeb.com; www.YourOwnDoctor.com which is accessible by both
registered physicians and consumers; and a fitness Site www.DeniseAustin.com.
All of the Web Site are structured to create advertising revenues.
Consumer Web Site
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www.YourOwnHealth.com is a unique, free online health and wellness Site.
YourOwnHealth.com enables visitors to become more informed about their medical
conditions and better prepared for their next visit to the doctor.
YourOwnHealth.com offers:
Medical Interview- The Site enables visitors to securely and anonymously select
and complete detailed medical history Questionnaires that relate to that
visitor's specific medical problems. Based upon the responses, the software
generates and makes available to the visitor a detailed Report. The Report lists
in alphabetical order the possible diagnoses and under each diagnosis the
positive and pertinent negative responses that support that diagnostic
consideration. At the consumer's option, the Questionnaires appear in either
English or Spanish and range from a general patient history to problem-specific
Questionnaires covering hundreds of medical conditions. All medical data are
encrypted for storage and Internet communications are protected by secure
digital certificates from VeriSign to protect the confidentiality rights of
every user. YourOwnHealth Notebook - A secure depository for storage of
personal and family medical data that can be accessed only through registered
IDs and passwords.
"YourOwnHealth Notebook" provides a convenient way to keep track of personal
health issues for Registered Members. Members can create and edit lists for
health conditions, allergies, immunizations, medications and more. Members can
also elect to save the interviews completed on YourOwnHealth.com and add
personal notes and reminders to the record.
YourOwnHealth Reference- The site also provides extensive Patient Education
Materials which are articles relating to diseases, disease management, medical
procedures and common medications including drug interactions.
Physician Web Sites
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www.PrimeCareOnTheWeb.com enables physicians to select problem specific medical
history Questionnaires for their patients to complete, via the Internet. When
patients call their doctor's office with a medical complaint, they are assigned
a unique set of pass-codes to access a special web site and answer the
Questionnaire(s). The Questionnaires are selected by their physician or a staff
member. When the patient has completed the Questionnaire, the information is
processed and saved by PrimeCareOnTheWeb . The processing produces a Report
containing the patient's medical history and lists the diagnostic possibilities
and also computes the E&M code for the medical history. The Report is sent by
encrypted electronic mail to the physician's office. The physician can also
print or review the Report directly from www.PrimeCareOnTheWeb.com.
The patient can be told to seek immediate medical help or be scheduled for an
office appointment. In case of emergency, the history can be forwarded to
the appropriate Hospital Emergency Room. When the patient arrives for an
appointment, the detailed medical history and Report are already completed,
without taking any physician time.
YourOwnDoctor.com
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Although, in general, physicians compete for the healthcare consumer, most
physicians in private practice do not yet have web sites to promote their
services. OCGT has created and maintains www.YourOwnDoctor.com , a Web Community
that hosts a web site, at no charge, for any physician that registers. The site
enables registered physicians to: display credentials, including photos of each
physician in the office; list specialties; provide office information: hours of
operation, directions, photos, maps; list contact information (phone numbers, e-
mail addresses); list accepted insurance plans; provide useful medical links. It
helps consumers to locate a physician in their neighborhood. Consumers can
select
from National Map and sort by name, practice name, specialty or city. It
provides a direct tie-in to YourOwnHealth and PrimeCareOnTheWeb .
A physician's registration for a web site at YourOwnDoctor.com automatically
registers the physician in PrimeCareOnTheWebTM and creates a link to
YourOwnHealth , thus promoting usage of these sites.
OCGT will offer Medical Societies, Hospitals, Healthcare Systems and
distributors of medical software products, who register physicians for a
Web Site, a share of OCGT's advertising revenues derived from the use of
PrimeCareOnTheWeb and YourOwnHealth by each of the healthcare
providers they cause to register on www.YourOwnDoctor.com.
Fitness Web Site www.deniseAustin.com
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Denise Austin's Daily Workout is the number one fitness show on television with
over one million viewers each weekday morning. Her top-selling videos have sold
over 4 million copies, capturing 28% of the fitness video market. She currently
has six videos in the top ten and has authored three best selling books on
fitness. Under the terms of an Agreement, OCGT is responsible to design, create,
host, operate, manage and maintain www.DeniseAustin.com, Denise Austin's web
site. DeniseAustin.com currently sends out a bi-monthly newsletter with
sponsorship to an opt-in list from the site. Visitors to the site are able to
shop for their favorite Denise Austin videos, exercise equipment and gear.
Visitors also have access to Denise's favorite healthy recipes, targeted
exercises and motivational content. In developing www.DeniseAustin.com, OCGT
will
continue to expand the comprehensive shopping area which offers a broad range of
products within the fitness industry. OCGT will share income from two sources -
advertising revenues and e-commerce. YourOwnHealth is currently positioned at
the Denise Austin web site with banners and sponsorship of the monthly
newsletter
which directs traffic to YourOwnHealth . YourOwnHealth will take full advantage
of the opportunity to position its interactive tools directly from
www.DeniseAustin.com to facilitate a greater increase of traffic over the
existing flow.
Ms. Austin has begun actively promoting the site and will appear in two magazine
articles in early 2000. She has already participated in a chat at Yahoo to help
brand and position the DeniseAustin.com site. She is both enthusiastic and
driven
to build up her online presence and positioning throughout the Internet.
Revenue Opportunities
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The Financial Potential of the PrimeCare on the Web
Assumptions:
On average a primary care physician sees between 25 and 30 patients per day.
Assume 25 patient visits per day.Therefore, practicing 20 days per month, a
primary care physician conducts between 500 and 600 patient visits per month.
Assume 500 per month. Estimated annual use of the PrimeCare on the Web per
physician is 6,000.
Although each page has been designed with space for seven advertisements, we
have
conservatively projected only 3 ads per page. Assume advertising per page to
consist of a Banner @ $.04, a Sponsor @ $.04, and a Focused ad @ $.05, for a
total of $.13 per page. Questionnaires average 20 pages. Total revenue per
questionnaire would be $2.60 ($.13 x 20).
Assuming that advertising revenues per completed Questionnaire average $2.60, it
is estimated that each 1,000 medical providers that routinely use
PrimeCareOnTheWeb on 75% of their patients could result in annual advertising
revenues in excess of $10,000,000.(4,500 patients x $2.60 x 1,000). However
there
are no assurances as to the level of usage that can be attained.
OCGT projects that the annual advertising revenues derived from use of
www.YourOwnHealth.com for each 50,000 completed patient Questionnaires per month
will exceed $1,500,000. However there are no assurances as to the level of usage
that can be attained.
In an effort to stimulate usage of OCGT's Web Sites the following programs have
been initiated. OCGT has entered into agreements with other businesses that
desire to use OCGT's content on their web sites. There are several different
types of arrangements that OCGT has entered into.
Business to Business Internet Services Agreements under which OCGT grants a
license to a business (the "User") to link to one or more OCCT's Web Sites. The
User markets OCGT's web sites to its visitors and shares in advertising revenues
earned by OCGT from use of the sites by the User's visitors.
The first of this type of Agreement is with VantageMed Corporation ("VMC") whose
corporate web site is www.vantagemed.net. On its master web site,
www.vantagemed.com, VMC is creating and hosting individual customer web sites
for
each of its more than 10,000 health care customer installations. These health
care installations collectively represent nearly 50,000 health care providers.
VMC selects and provides the content for the individual customer sites and will
educate their customers in the use of these new tools. The Internet Services
Agreement provides that each VMC customer web site will be seamlessly linked
directly to both www.YourOwnHealth.com, a consumer interactive health care web
site, and to www.PrimeCareOnTheWeb.com, a web site for physicians and their
staffs.
Business to Business License Agreements - PSI has developed a dynamically
generated Interactive Medical Interview System ("IMIS"). The new IMIS technology
allows OCGT to license access to the core interview engine of PSI's PrimeCare
System in a tailored, customized environment that shares the look and feel of
the
Licensee's web application. . This licensed product is configured to enable the
Licensee to include any or all of PrimeCare's unique medical Questionnaires and
Reports, as content on their web site without any of OCGT's third party
advertisements. This gives the Licensee access to the core interview engine of
PrimeCare's unique interactive medical interviews for use within their own
system. OCGT retains complete control of the content and the responsibility of
maintaining the interview delivery system on a server located at OCGT's
facility.
The Licensee pays OCGT a setup fee plus an annual license fee.
Medical Selfcare, Inc., an e-commerce company whose web site is
www.selfcare.com,
is the first Licensee to use PSI's unique content on their site. OCGT will use
this model to develop additional content Licensee arrangements. The integration
is complete and OCGT's software appears on www.selfcare.com.
Advertising Revenue Sharing Agreements which create strategic alliances have
been
created to increase the "unique visits" to YourOwnHealth.com to generate
increased advertising revenues. Under these arrangements a portal or search
engine links to YourOwnHealth.com to provide their visitors with PrimeCare's
interactive medical Questionnaires.
One such strategic alliance is with www.GoToWorld.com ("GTW"). GTW is a global
communication super portals YourOwnHealth will be integrated into the health
center at GTW titled "Personal Health", which links directly back to a
co-branded
page between GTW and YourOwnHealth.com. Each day visitors at GTW will see a
different medical Questionnaire being highlighted such as, "Are you suffering
from the Flu?" The agreement with GTW also provides for www.GoToWorld.uk and
www.GoToWorld.au to be linked to YourOwnHealth in the same way.
A similar agreement has been entered into with Cyber Networks, Inc., the owner
of
www.C4.com. C4 is a TotalSearch technology search tool. Under the agreement, C4
will create targeted campaigns that will link YourOwnHealth 's interactive
medical history Questionnaires to specific banners or buttons on their site
which
will drive traffic from C4's heavily visited site to YourOwnHealth . C4 has
grown
to register over 15,000,000 page impressions per month and is growing rapidly.
Regional Sponsorships
- ---------------------
A regional sponsor is generally a hospital that links to YourOwnHealth.com. When
a visitor logs on to YourOwnHealth.com from a zip code allocated to a Sponsor
Hospital, each page displays the logo and name of the Hospital as the Sponsor.
To
date, the following Hospitals are Sponsors in their geographical areas:
http://www.riverside-online.com.
http://www.chwbay.com. (A group of seven hospitals that form Catholic
Hospital West Bay).
http://www.btmh.com Burdett Tomlin Memorial Hospital.
http://www.dunnmemorial.org.
This type of arrangement affords two possible revenue sources. The link from the
Sponsor's web site generates visitors to YourOwnHealth.com. Additionally,
revenues can be generated through Sponsor fees.
In addition to the Consumer Web Sites and Business to Business Agreements, OCGT
continues to market the PrimeCare Patient Management System and the CodeComplier
as turnkey systems within a physician's office. (see www.pcare.com for more
details).
OCGT is currently in discussions with portals, search engines and healthcare web
site to arrange linking and cross linking agreements all of which should
increase
visits to the OCGT Sites and generate advertising revenues.
OCGT has entered into an agreement with Denise Austin to create, host and manage
www.DeniseAustin.com , as url owned by Denise Austin.
OCGT believes that it could provide sufficient working capital from operations
through marketing the Window 95/NT version of the PrimeCareTM System,
CodeComplierTM, and its Internet products.
Currently, OCGT has no lines of credit and has no material commitments for
capital expenditures outstanding.[end of insert]
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Stockholders, of record on October 29, 1999,
of OCG Technology, Inc. (the "Stockholders", was held on December 14, 1999,
for the following purposes:
1. Election of Directors. The following three Directors, consisting
of all of the Directors of the Company, were elected to serve until the next
Annual Meeting of the Stockholders and thereafter, until their successors
are elected and qualified:
Name Votes "FOR" Votes "WITHHELD"
- ----------------- ---------- ----------------
Edward C. Levine 25,261,437 508,759
Jeffrey P. Nelson 25,262,437 507,759
Jarema S. Rakoczy 25,262,437 507,759
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
(PRINCIPAL FINANCIAL OFFICER)
DATED: February 18, 2000
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<PERIOD-END> DEC-31-1999
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