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, 2000
[ ] 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 May 1, 2000
- ------------------------------ ---------------------------------
Common Stock ($.01 par value) 31,911,557 Shares
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OCG TECHNOLOGY, INC. AND SUBSIDIARIES
INDEX
PART I. - FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Information
Consolidated Condensed Balance Sheets
March 31, 2000 and June 30, 1999 1
Consolidated Condensed Statements of Loss for the
Three and Nine Months Ended March 31, 2000 and 1999 2
Consolidated Condensed Statements of Cash Flow for
the Nine Months Ended March 31, 2000 and 1999 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
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<TABLE>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
MARCH 31, 2000 JUNE 30, 1999
ASSETS (UNAUDITED) (AUDITED)
<S> <C> <C>
Current Assets:
Cash $ 36,963 $ 103,408
Receivables, trade 30,418 8,468
Receivable, Sale of business 87,805 -
Net assets held for sale - 30,421
Other current assets 104,091 193,979
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Total current assets 259,277 336,276
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Property and equipment, net of accumulated depreciation of
($526,783) ($482,020) 92,381 123,023
Other assets 1,480 3,180
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Total assets $ 353,138 $ 462,479
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 30,312 $ 53,591
Notes Payable - 21,844
Due to Shareholder (non-interest bearing) - 15,121
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Total current liabilities 30,312 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 319,115 305,815
Additional paid-in capital 24,318,338 23,951,577
Deficit (23,906,127) (23,471,969)
Subscription receivable (356,000) (361,000)
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385,326 434,423
Less treasury stock, at cost (62,500) (62,500)
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Total shareholders' equity 322,826 371,923
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Total liabilities and shareholders' equity $ 353,138 $ 462,479
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See accompanying notes to consolidated condensed financial statements
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<CAPTION>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, NINE MONTHS ENDED MARCH 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenue:
Sales $ 33,136 $ 2,625 $ 63,136 $ 13,110
---------- ---------- ---------- ----------
Costs and expenses:
Marketing, general and
administrative 119,403 86,435 425,513 386,427
Depreciation and
amortization 15,534 37,623 45,074 105,547
Product development costs 156,532 78,136 371,911 279,802
Interest - net (542) 13 (1,608) (5,209)
---------- ---------- ---------- ----------
Total Expenses 290,927 202,207 840,890 766,567
---------- ---------- ---------- ----------
Loss from continuing
operations (257,791) (199,582) (777,754) (753,457)
Profit from discontinued
operations - (2,103) 16,707 60,494
Income from sale of business (24,752) - 326,576 -
---------- ---------- ---------- ----------
Net loss $ (282,543) $ (201,685) $ (434,471) $ (692,963)
========== ========== ========== ==========
Weighted average number of
shares outstanding
during period 31,548,480 29,871,002 31,037,557 29,842,275
========== ========== ========== ==========
Loss per Common Share $(0.01) $(0.01) $(0.01) $(0.02)
========== ========== ========== ==========
See accompanying notes to consolidated condensed financial statements
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<TABLE>
<CAPTION>
OCG TECHNOLOGY, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED MARCH 31,
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(434,471) $ (242,065)
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Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 45,074 33,080
Issuance of stock and warrants for services 97,687 -
Amortization of Black Scholes valuation 153,054 22,013
Changes in assets and liabilities
(Increase) decrease in receivables (109,755) (29,427)
(Increase) decrease in demand notes 30,421 147,250
(Increase) decrease in other current assets
less Black Sholes value (63,404) 106,045
(Increase) decrease in property and equipment (13,471) (8,375)
(Increase) decrease in Proprietary Technology - (47,383)
(Increase) decrease in other assets less
Black Scholes value 1,700 (91,450)
(Decrease) in accounts payable and accrued expenses (23,279) (41,155)
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Total adjustments 118,026 90,598
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Net cash used in operating activities (316,445) (151,467)
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Cash flows from financing activities:
(Increase) decrease in subscription receivable 5,000 25,250
Proceeds from issuance of common stock 245,000 -
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Net cash changes from financing activities 250,000 25,250
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Net increase (decrease) in cash (66,445) (126,217)
Cash, beginning of period 103,408 475,323
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Cash, end of period $ 36,963 $ 349,106
========== ===========
See accompanying notes to consolidated condensed financial statements
</TABLE>
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OCG TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of OCG Technology, Inc. (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
March 31, 2000 and the results of operations for the three and nine
months ended March 31, 2000 and 1999 and the statements of cash flows for
the nine months ended March 31, 2000 and 1999. The June 30, 1999 balance
sheet has been derived from OCGT's audited financial statements.
The results of operations for the nine months ended March 31, 2000
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 current 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 nine months ended March 31, 2000, for services rendered
in accord with the terms of a consulting agreement, warrants were issued
to purchase a total of 45,000 shares of OCGT's common stock at exercise
prices ranging between $0.34 to $0.42 per share with exercise dates of
said warrants expiring between July 1, to March 31, 2003. OCGT reflected
a total expense of $6,000 for the three month period ending March 31,
2000.
During the nine months ended March 31, 2000, 980,000 shares of
OCGT's common stock were sold for $245,000 ($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 OCGT's 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.
During the three months ended March 31, 2000, OCGT's Board of
Directors approved the issuance of warrants to acquire 25,000 shares of
OCGT's common stock at an exercise price of $0.40 which expire February
15, 2003. These warrants were issued to a consultant 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:
During April and May 2000, 240,000 shares of OCGT's common stock were
sold for $60,000 ($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 $30,511 and $50,026 for the three and nine
months ended March 31, 2000, as compared to the same period for 1999,
primarily as a result of Internet revenues. The sales of OCGT and PSI
were $100 and $63,036 respectively, for the nine months ended March
31, 2000.
Marketing, general and administrative expenses increased $32,968 and
$39,086 for the three and nine months ended March 31, 2000, as
compared to the same period for 1999; depreciation and amortization
decreased $22,089 and 60,473for the three and nine months ended March
31, 2000, as compared to the same period for 1999; and product
development costs increased $78,396 and $92,109 for these same periods
due to a change both in presentation and in the accounting procedures.
In prior years, expenditures for Product Development were capitalized
and 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 and depreciation and
amortization are also shown as a separate item.
Liquidity and Capital Resources
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At March 31, 2000, OCGT had a current ratio of 8.6 to 1 compared to
1.1 to 1 as of March 31,1999. The net loss from continuing operations
for the nine months ended March 31, 2000, was $777,754, of which
$236,120 or 30% were non-cash charges. 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 $155,186 at March 31, 2000.
OCGT also has $356,000 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 nine months ended March 31, 2000, 980,000 shares of OCGT's
common stock were sold for $245,000 ($0.25 per share). Since March 31,
2000 OCGT has raised $60,000 through the sale of 240,000 shares of
common stock 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 was
estimated to be $96,262 and finally agreed to be $71,510. The sale has
been completed. The unpaid portion of the sales price as of March
31,2000, was $87,805 is reflected as a receivable. During the month of
May, OCGT received a payment of $47,526 and the balance in the amount
of $40,281 is due and payable on July 28, 2000.
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 PrimeCare(TM) Patient
Management System (the "PrimeCare(TM)System"), PrimeCareOnTheWeb.com,
YourOwnHealth.com, YourOwnDoctor.com and DeniseAustin.com, all of
which are protected by copyrights.
Substantially all of PSI's Web products are centered on parts of the
PrimeCare(TM) System. The PrimeCare(TM) 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 PrimeCare(TM)System, without the presence of a physician.
Thus, 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 patient's 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 PrimeCare(TM) System creates a Preliminary Report (the "Report") for
the physician to review before examining the patient. The 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 PrimeCare(TM)
System permits physicians to see more patients and to spend more
quality time with them. The PrimeCare(TM) 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 PrimeCare(TM) 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 and 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 PrimeCare(TM) System and CodeComplier(TM) 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 PrimeCare(TM) 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.
PrimeCare(TM)Web Sites and activities
- -------------------------------------
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 PrimeCareTM 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
- --------------------------
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 four Web Sites: a Site for consumers,
www.YourOwnHealth.com ; a Site accessible only by registered
physicians through use of a unique password, www.PrimeCareOnTheWeb.com;
a Web Site which is accessible by both registered physicians and
consumers, www.YourOwnDoctor.com; and a fitness Web Site
www.DeniseAustin.com. All of the Web Sites are structured to create
advertising revenues.
Consumer Web Site
- -----------------
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 (see above). Based upon the responses, the software
generates and makes available to the visitor the detailed Report (see
above). 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(TM) 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(TM) 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
- -------------------
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 Report is generated.
CodeComplierTM computes the E&M code for the medical history and it is
included with the Report. 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
- -----------------
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(TM) and PrimeCareOnTheWeb(TM). A physician's registration
for a Web Site at YourOwnDoctor.com automatically registers the
physician in PrimeCareOnTheWeb(TM)and creates a link to YourOwnHealth(TM),
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(TM)and YourOwnHealth(TM) by each of the healthcare
providers they cause to register on www.YourOwnDoctor.com.
Fitness Web Site: www.deniseaustin.com
- ---------------------------------------
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 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 intends to 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(TM) is currently
positioned at the Denise Austin Web Site with banners and sponsorship
of the monthly newsletter which directs traffic to YourOwnHealth(TM).
YourOwnHealth(TM) 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 is scheduled to
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
- ---------------------
The Financial Potential of the PrimeCare on the Web
Assumptions:
On average, a primary care physician sees between 25 and 30 patients
per day. Assuming 25 patient visits per day, a primary care
physician, practicing 20 days per month, conducts between 500 and 600
patient visits per month. Thus, assuming 500 patients visits per
month, estimated annual use of PrimeCare on the Web per physician is
6,000 patient visits.
Each page has been designed with space for seven advertisements or
impressions. Assuming advertising per page to consist of a Banner @
$.04, a Sponsor @ $.04, and a Focused ad @ $.05, for a total of $.13
per page. Assuming impressions are sold at the rate of $20 per
thousand or $0.02 per impression. Since Questionnaires average 20
pages, revenue per questionnaire would be $2.80 (14 cents x 20).
Assuming that advertising revenues per completed Questionnaire average
$2.80, it is estimated that each 1,000 medical providers that
routinely use PrimeCareOnTheWeb(TM) on 75% of their patients could result
in annual advertising revenues in excess of $10,000,000.(4,500
patients x $2.80 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 would 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 this type of
agreement, OCGT grants a license to a business (the "User") to link to
one or more OCGT'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 was made 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
YourOwnHealth.com, a consumer interactive health care Web Site, and
to PrimeCareOnTheWeb.com, a Web Site for physicians and their staffs.
VMC recently advised OCGT that their physician focus groups believed
PrimeCareOnTheWeb.com to be desirable. Modifications in the use of
PrimeCareOnTheWeb.com have been completed and VMC is adding software
to one of their products to enable the report generated by
PrimeCareOnTheWeb.com to be stored in the patient's file.
During the month of April another relationship of this type came into
existence when an agreement was entered into with Sickbay.com.
PrimeCareOnTheWeb.com is actively linked to the Doctor's Deck for use
by Sickbay.com's physician subscribers.
A third relationship of this type was entered into on April 25th with
AAPP a not for profit organization of physicians and patients that has
two Web sites - SimpleCare.com and AAPP.net. The AAPP agreement also
includes listing AAPP physician Members on YourOwnDoctor.com to enable
patient Members to locate AAPP physicians in their area.
An additional agreement has been entered into with AAPP, which
provides for OCGT to design and maintain a system on the Internet to
register new Members and annual Membership renewals. The system has
been completed and should be operational next week. OCGT is
compensated on a per member basis.
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(TM) 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 intends to 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 - 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 portal. YourOwnHealth(TM) 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(TM) 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(TM) technology search tool.
Under the agreement, C4 will create targeted campaigns that will link
YourOwnHealth(TM)'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(TM). C4 has grown to
register over 15,000,000 page impressions per month and is growing
rapidly.
During the month of April 2000, another such agreement was entered
into with HealthMax.net which provides for links to YourOwnHealth.com.
During the month of March 2000 an agreement was entered into with USA
Today which provides for banner and text impressions on USATODAY.com
that link to YourOwnHealth.com.to advertise and increase traffic to
YourOwnHealth.com.
DeniseAustin.com has entered into an agreement with GoToWorld.com
which positions DeniseAustin.com as a major fitness content provider
for GoToWorld.com and links GoToWorld.com to four areas of
DeniseAustin.com.
DeniseAustin.com has entered into an agreement with FitnessLink.com
which provides for FitnessLink.com to be an advertiser on
DeniseAustin.com as well as to co-brand and link to DeniseAustin.com.
An agreement was entered into with MyFitnessClub.com a membership
based site which features interactive fitness and health content site
which provides for links to DeniseAustin.com's Shopping Cart.
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.
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.
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.
OCGT believes that it could provide sufficient working capital from
operations through marketing the Window 95/NT version of the
PrimeCare(TM) System, CodeComplier(TM), and its Internet products.
Currently, OCGT has no lines of credit and has no material commitments
for capital expenditures outstanding.
<PAGE>
PART II - OTHER INFORMATION
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: May 19, 2000
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 36,963
<SECURITIES> 0
<RECEIVABLES> 30,418
<ALLOWANCES> 0
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<CURRENT-ASSETS> 259,277
<PP&E> 619,164
<DEPRECIATION> 526,783
<TOTAL-ASSETS> 353,138
<CURRENT-LIABILITIES> 30,312
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<COMMON> 319,115
<OTHER-SE> (6,289)
<TOTAL-LIABILITY-AND-EQUITY> 353,138
<SALES> 63,136
<TOTAL-REVENUES> 63,136
<CGS> 0
<TOTAL-COSTS> 840,890
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,608)
<INCOME-PRETAX> (434,471)
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