UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 0-25530
LIFERATE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-1682994
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. BOX 390353
MINNEAPOLIS, MINNESOTA 55439-0353
(Address of principal executive offices, including zip code.)
(612) 837-2975
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of November 1, 2000, there were 14,575,043 shares of Common Stock
outstanding.
Transitional Small Business Disclosure Format (check one): Yes_____ No__X__
<PAGE>
LIFERATE SYSTEMS, INC.
INDEX
PART I
PAGE
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ITEM 1. FINANCIAL STATEMENTS
Statements of Net Assets in Liquidation as of September 30, 3
2000 and December 31, 1999
Statement of Changes in Net Assets in Liquidation for the three 4
months and nine months ended September 30, 2000 and 1999
Statements of Cash Flows for the nine months ended September 30, 5
2000 and 1999
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS 7
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 8
<PAGE>
LIFERATE SYSTEMS, INC.
Statements of Net Assets in Liquidation
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
2000 1999
---- ----
ASSETS (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 22,400 $ 100,800
Accounts receivable 27,000 5,800
Prepaid expenses and other current assets 4,500 2,300
Computer equipment, net 1,700 4,300
------------ ------------
Total assets 55,600 113,200
------------ ------------
LIABILITIES
Accounts payable and other accrued liabilities 4,100 1,300
Other current liabilities -- 4,600
Reserve for estimated costs during period of liquidation 30,000 72,000
------------ ------------
Total liabilities 34,100 77,900
------------ ------------
Net assets $ 21,500 $ 35,300
============ ============
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
LIFERATE SYSTEMS, INC.
Statements of Changes in Net Assets in Liquidation
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED SEPTEMBER 30,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
Net assets in liquidation as of June 30, 1999 $ 91,700
Net assets in liquidation as of June 30, 2000 $ 21,200
Change in net liabilities 300 (43,600)
------------ ------------
Net assets in liquidation as of September 30, 1999 $ 48,100
============
Net assets in liquidation as of September 30, 2000 $ 21,500
============
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
Net liabilities in liquidation as of December 31, 1998 $ (2,988,900)
Net assets in liquidation as of December 31, 1999 $ 35,300
Change in net liabilities (13,800) 3,037,000
------------ ------------
Net assets in liquidation as of September 30, 1999 $ 48,100
============
Net assets in liquidation as of September 30, 2000 $ 21,500
============
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
LIFERATE SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Decrease in net (assets) liabilities $ (13,800) $ 3,037,000
Adjustments to reconcile decrease in net (assets) liabilities to net cash
used in operating activities:
Depreciation 2,600 5,700
Notes payable converted to common stock -- (3,075,000)
Gain on sale of equipment -- (2,800)
Changes in operating assets and liabilities:
Accounts receivable (21,200) 40,600
Prepaid and other current assets (2,200) 47,500
Accounts payable and other accrued liabilities 2,800 (74,500)
Other current liabilities (4,600) (214,500)
Decrease in estimated liquidation expenses (42,000) (149,000)
Deferred revenue -- (153,400)
------------ ------------
Net cash used in operating activities (78,400) (538,400)
INVESTING ACTIVITIES
Proceeds from equipment sales -- 3,900
------------ ------------
Net cash provided by investing activities -- 3,900
FINANCING ACTIVITIES
Payments on notes payable and capital lease obligations -- (62,000)
------------ ------------
Net cash used in financing activities -- (62,000)
------------ ------------
Decrease in cash and cash equivalents (78,400) (596,500)
Cash and cash equivalents at beginning of period 100,800 704,900
------------ ------------
Cash and cash equivalents at end of period $ 22,400 $ 108,400
============ ============
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
LIFERATE SYSTEMS, INC.
Notes to Financial Statements
September 30, 2000
1. Organization and Description of Business
LifeRate Systems, Inc. was engaged in marketing a proprietary software
operating system to healthcare providers and payors throughout the
United States to produce information to measure and quantify the
quality and cost of health care. In August 1998, the Company closed its
business operations due to continuing losses from operations. The
Company does not have any customers. It is not marketing or selling its
products and does not expect to generate any meaningful revenue. The
Company is seeking a buyer for its technology and/or possible merger
candidates.
2. Liquidation Basis of Accounting
The Company has adopted the liquidation basis of accounting as of
October 1, 1998. This basis of accounting is considered appropriate
when the liquidation of a company appears imminent and the net
realizable value of its assets are reasonably determinable. Under this
basis of accounting, assets and liabilities are stated at their net
realizable value and estimated costs through the liquidation date are
provided to the extent reasonably determinable. The financial
information presented as of September 30, 2000 and 1999 has been
prepared from the books and records without audit. Financial
information as of December 31, 1999 is based on audited financial
statements of LifeRate Systems, Inc. but does not include all
disclosures required by generally accepted accounting principles. For
further information regarding the Company's accounting policies, refer
to the financial statements and attached notes included in the
Company's Form 10-KSB for the fiscal year ended December 31, 1999 as
filed with the Securities and Exchange Commission.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company ceased its ongoing business operations in August of 1998 due to
continuing losses from operations. The Company has terminated its relationships
with all of its customers and is not marketing or selling its products.
Accordingly, the Company does not expect to generate any revenue from new
customers in the future.
The Company has adopted the liquidation basis of accounting as of October 1,
1998. This basis of accounting is considered appropriate when the liquidation of
a company appears imminent and the net realizable value of its assets are
reasonably determinable. Under this basis of accounting, assets and liabilities
are stated at their net realizable value and estimated costs through the
liquidation date are provided to the extent reasonably determinable.
Liquidity and Capital Resources
At September 30, 2000, the Company had $22,400 in cash and cash equivalents, a
decrease of $78,400 from December 31, 1999. The decrease was due to payments of
the Company's liabilities and operating expenses.
The Company estimates that its current cash balances will not be sufficient to
fund the limited operations of the Company through the end of 2000. The Company
is presently seeking a buyer for the Company and/or its software technology.
There can be no assurance that the Company will be able to find a buyer for the
Company or its technology on satisfactory terms.
Year 2000 Issues
Computer programs have historically been written to abbreviate dates by using
two digits instead of four digits to identify a particular year. The so called
"Year 2000" problem or "millennium bug' is the inability of computer software or
hardware to recognize or properly process dates ending in "00." During 1999,
most companies focused significant attention on updating or replacing such
software and hardware in order to avoid system failures, miscalculations or
business interruptions that might otherwise result. The Company has ceased its
business operations and the Year 2000 problem has not impacted its business,
financial condition or result of operations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
ITEM NUMBER ITEM METHOD OF FILING
27.1 Financial Data Schedule Filed herewith
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
has caused this Amendment to be signed on its behalf by the
undersigned, thereunder duly authorized.
Dated: November 14, 2000
LIFERATE SYSTEMS, INC.
By: /s/Bruce Senske
---------------
Bruce Senske
Acting Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
<PAGE>
LIFERATE SYSTEMS, INC.
EXHIBIT INDEX TO QUARTERLY
REPORT ON FORM 10-QSB
for the Quarterly Period ended June 30, 2000
ITEM NUMBER ITEM METHOD OF FILING
27.1 Financial Data Schedule Filed herewith
