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FORM 10-Q
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period ended September 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission File Number: 0-22162
CARECENTRIC, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3209241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2625 Cumberland Parkway, Suite 310 30339
Atlanta, Georgia (zip code)
(Address of principal
executive offices)
(Registrant's telephone number, including area code) (678) 264-4400
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 [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
Outstanding at
Class 10/31/2001
----- ----------
Common Stock, $.001 par value 4,371,350 shares
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CARECENTRIC, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets - September 30, 2001
(unaudited) and December 31, 2000 (audited).
Consolidated Statements of Operations - Three Months
Ended September 30, 2001 (unaudited) and 2000
(unaudited).
Consolidated Statements of Shareholders' Equity -
Nine Months Ended September 30, 2001 (unaudited) and
2000 (unaudited).
Consolidated Statements of Cash Flows - Three Months
and Nine Months Ended September 30, 2001 (unaudited)
and 2000 (unaudited).
Notes to Consolidated Financial Statements -
September 30, 2001 (unaudited).
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
by CareCentric, Inc. ("CareCentric" or the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of the
Company, all adjustments (consisting only of normal recurring entries) necessary
for the fair presentation of the Company's results of operations, financial
position and cash flows for the periods presented have been included.
3
CARECENTRIC, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
----------------- -------------------
2001 2000
----------------- -------------------
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 31,000 $ 362,000
Accounts receivable, net of allowance for
doubtful accounts of $378,000 and $551,000
respectively 5,741,000 8,484,000
Prepaid expenses, inventory and other current
assets 1,602,000 701,000
----------------- -------------------
Total current assets 7,374,000 9,547,000
Purchased software, furniture and equipment, net 1,697,000 1,957,000
Intangible assets, net 18,030,000 23,405,000
Other assets 468,000 211,000
----------------- -------------------
Total assets $ 27,569,000 $ 35,120,000
================= ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable 647,000 600,000
Line of Credit 5,013,000 5,996,000
Current portion capital lease obligation 10,000 -
Accounts payable 1,847,000 1,156,000
Accrued compensation expense 931,000 616,000
Accrued liabilities 6,339,000 7,447,000
Customer deposits 1,760,000 2,496,000
Unearned revenues 4,142,000 5,001,000
----------------- -------------------
Total current liabilities 20,689,000 17,316,000
Accrued liabilities, less current portion 1,910,000 128,000
Notes payable long-term 4,100,000 600,000
----------------- -------------------
Total liabilities 26,699,000 24,040,000
Shareholders' equity:
Preferred stock; 10,000,000 shares authorized
Series B Preferred, $.001 par value; 5,600,000 issued and
outstanding 6,000 6,000
Series C Preferred, $.001 par value; 850,000 issued and
outstanding 1,000 1,000
Series D Preferred, $.001 par value; 398,000 issued and
outstanding - -
Common stock, $.001 par value; 20,000,000 shares authorized,
4,371,350 shares issued and outstanding at September 30, 2001
and
3,849,816 shares issued and outstanding at December 31, 2000; 4,000 4,000
Additional paid-in capital 21,070,000 21,070,000
Stock warrants 1,000,000 1,000,000
Accumulated deficit (21,211,000) (11,001,000)
----------------- -------------------
Total shareholders' equity 870,000 11,080,000
----------------- -------------------
Total liabilities and shareholders' equity $ 27,569,000 $ 35,120,000
================= ===================
See notes to consolidated financial statements.
The above financial statements reflect the fact that for accounting purposes
MCS, Inc. is deemed to have acquired CareCentric, Inc. on March 7, 2000, the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.
4
CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------------ ------------------------------------
2001 2000 2001 2000
---------------- ---------------- ---------------- -----------------
Net revenues: $ 4,769,000 $ 7,177,000 $ 15,748,000 $ 15,933,000
Costs and expenses:
Cost of revenues 1,646,000 2,621,000 6,188,000 7,670,000
Selling, general and
administrative 2,550,000 3,253,000 7,551,000 7,457,000
Research and development 1,413,000 1,897,000 4,789,000 4,388,000
Depreciation and amortization 1,011,000 1,027,000 2,905,000 2,457,000
Restructuring charge - - 675,000 -
---------------- ---------------- ---------------- -----------------
Total costs and expenses 6,620,000 8,798,000 22,108,000 21,972,000
---------------- ---------------- ---------------- -----------------
Loss from operations (1,851,000) (1,621,000) (6,360,000) (6,039,000)
Other (expense) income:
Interest expense (219,000) (265,000) (958,000) (531,000)
Interest and other income 29,000 68,000 223,000 220,000
---------------- ---------------- ---------------- -----------------
Net loss before taxes $ (2,041,000) $ (1,818,000) $ (7,095,000) $ (6,350,000)
---------------- ---------------- ---------------- -----------------
Income tax benefit - (6,000) - 151,000
---------------- ---------------- ---------------- -----------------
Net loss from continuing operations (2,041,000) (1,824,000) (7,095,000) (6,199,000)
Discontinued operation:
Loss on disposal of
discontinued operations (2,632,000) - (2,632,000) -
Loss from discontinued
operations (226,000) (21,000) (483,000) (324,000)
---------------- ---------------- ---------------- -----------------
Net loss from operations of
discontinued segment (2,858,000) (21,000) (3,115,000) (324,000)
---------------- ---------------- ---------------- -----------------
Net loss $ (4,899,000) $ (1,845,000) $ (10,210,000) $ (6,523,000)
================ ================ ================ =================
Loss per share - basic and diluted
From continuing operations $ (0.47) $ (0.47) $ (1.67) $ (1.89)
From discontinued operations $ (0.65) $ (0.01) $ (0.73) $ (0.10)
---------------- ---------------- ---------------- -----------------
Net loss per share $ (1.12) $ (0.48) $ (2.40) $ (1.99)
================ ================ ================ =================
Weighted average common shares -
basic and diluted 4,371,000 3,850,000 4,243,000 3,273,000
================ ================ ================ =================
See notes to consolidated financial statements.
The above financial statements reflect the fact that for accounting purposes
MCS, Inc. is deemed to have acquired CareCentric, Inc. on March 7, 2000, the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.
5
CARECENTRIC, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For the nine months ended September 30, 2001
Total
Common Preferred Paid-in Accumulated Shareholders'
Shares Stock Shares Stock Capital Warrants Deficit Equity
----------- ----------- ----------- ----------- -------------- ------------ -------------- --------------
Balance at
December 31, 2000 3,850,000 $ 4,000 6,848,000 $ 7,000 $ 21,070,000 $1,000,000 $(11,001,000) $ 11,080,000
Issuance of
$.001 par value
common stock (1) 593,000 - - - - - - -
Cancellation of
$.001 par value
common stock (1) (72,000) - - - - - - -
Net loss - - - - - - (10,210,000) (10,210,000)
------------ ----------- ----------- ----------- ------------- ------------ -------------- --------------
Balance at
September 30, 2001 4,371,000 $ 4,000 6,848,000 $ 7,000 $ 21,070,000 $1,000,000 $(21,211,000) $ 870,910
============ =========== =========== =========== ============= ============ ============== ==============
(1) See Note 9 to the consolidated financial statements.
See notes to consolidated financial statements.
The above financial statements reflect the fact that for accounting purposes
MCS, Inc. is deemed to have acquired CareCentric, Inc. on March 7, 2000, the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.
6
CARECENTRIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
Three Months ended Nine Months ended
September 30, September 30,
-------------------------- -----------------------------
2001 2000 2001 2000
------------- ------------ ------------- -------------
Cash flows from operating activities:
Net loss $ (4,899,000) $(1,845,000) $(10,210,000) $(6,523,000)
Adjustments to reconcile net loss
to net cash used in operating activities:
Provision for doubtful accounts 133,000 - 252,000 376,000
Amortization and depreciation 1,094,000 1,171,000 3,277,000 2,780,000
Loss on disposal of assets 2,632,000 - 2,632,000 -
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable 565,000 (11,000) 1,026,000 (905,000)
Prepaid expenses and other current assets (117,000) 200,000 (359,000) 215,000
Other assets (660,000) 20,000 (799,000) (117,000)
Accounts payable (866,000) (308,000) 691,000 (1,182,000)
Accrued compensation expense 114,000 (110,000) 315,000 (192,000)
Accrued liabilities 803,000 (544,000) 699,000 (1,225,000)
Customer deposits (446,000) 36,000 (736,000) 856,000
Unearned revenues 533,000 (796,000) (859,000) 817,000
------------- ------------ ------------- -------------
Net cash used in operating activities (1,114,000) (2,187,000) (4,071,000) (5,100,000)
------------- ------------ ------------- -------------
Cash flows from investing activities:
Assets and liabilities disposed of 1,715,000 - 1,715,000
Purchase of software, furniture and equipment (122,000) (136,000) (467,000) (408,000)
------------- ------------ ------------- -------------
Net cash used in investing activities 1,593,000 (136,000) 1,248,000 (408,000)
------------- ------------ ------------- -------------
Cash flows from financing activities:
Cash received in connection with MCS merger - - 3,547,000
Proceeds from issuance of preferred stock - - 1,000,000
Proceeds from issuance / (repayments) of notes
payable (493,000) 1,985,000 2,492,000 2,575,000
------------- ------------ ------------- -------------
Net cash provided by financing activities (493,000) 1,985,000 2,492,000 7,122,000
------------- ------------ ------------- -------------
Net increase/(decrease) in cash and cash
equivalents (14,000) (338,000) (331,000) 1,614,000
Cash and cash equivalents, beginning of period 45,000 1,999,000 362,000 47,000
------------- ------------ ------------- -------------
Cash and cash equivalents, end of period $ 31,000 $ 1,661,000 $ 31,000 $ 1,661,000
============= ============ ============= =============
See notes to consolidated financial statements.
The above financial statements reflect the fact that for accounting purposes
MCS, Inc. is deemed to have acquired CareCentric, Inc. on March 7, 2000, the
date of the merger, as more fully explained in Notes 1 and 2 to the Consolidated
Financial Statements.
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MCS as Deemed Acquirer of CareCentric, Inc.
On March 7, 2000, CareCentric, Inc. (formerly known as Simione Central Holdings
Inc.) ("CareCentric" or the "Company") and MCS, Inc. ("MCS") merged in a
transaction accounted for as a reverse acquisition for financial reporting
purposes. In connection with the acquisition, CareCentric issued 1,489,853
shares of its common stock in exchange for all the outstanding common stock of
MCS, and thereby, the former shareholders of MCS acquired control of
CareCentric. As a result, for financial reporting purposes MCS is considered the
acquiring company; hence, the historical financial statements of MCS became the
historical financial statements of CareCentric and include the results of
operations of CareCentric only from the effective acquisition date.
The weighted average common shares for the nine months ended September 30, 2000
are recast in the accompanying Consolidated Statements of Operations to give
effect to the 1,489,853 shares of CareCentric common stock that were issued to
the MCS shareholders in connection with the CareCentric/MCS merger on March 7,
2000 as though such shares had been outstanding for the entire period. For the
period from January 1, 2000 through March 6, 2000, therefore, 1,489,853 shares
of issued and outstanding CareCentric common stock are deemed to be owned by the
MCS shareholders. For the period from March 7, 2000 through December 31, 2000,
there were 3,849,816 total shares of issued and outstanding Company common stock
(after giving effect to the CareCentric/MCS merger). The weighted average shares
for the year ended December 31, 2000 are also recast to give effect to the
1,489,853 shares of CareCentric common stock that were issued to the MCS
shareholders pursuant to the CareCentric/MCS merger as though such shares had
been outstanding for the entire period.
Basis of Presentation
The condensed consolidated financial statements have been prepared by the
Company (which as used herein refers to CareCentric, after giving effect to the
merger with MCS and, as the context requires, MCS, prior to the CareCentric/MCS
merger), include the results of operations of the parent company and its wholly
owned subsidiaries and are unaudited (except for the December 31, 2000 balance
sheet). In the opinion of management, all adjustments, which consist of normal
recurring adjustments, considered necessary for a fair presentation have been
included. Interim results are not necessarily indicative of the results that may
be expected for the year ending December 31, 2001.
Certain financial information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
as of December 31, 2000 appearing in the Company's Report on Form 10-K for the
year ended December 31, 2000.
Description of Business
The Company is a leading provider of information technology systems and related
services designed to help home health care providers more effectively operate
their businesses in today's environment. The Company's focus is to help home
health care providers streamline their operations and better serve their
patients. The Company offers several comprehensive software solutions. Each of
these solutions provides a basic set of software applications and specialized
modules that can be added based upon customer needs. These software solutions
are designed to enable customers to generate and utilize comprehensive
financial, operational and clinical information.
Intangible Assets and Long-lived Assets
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of"
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the asset's
carrying amount. Continuing losses and changes in the home health information
technology market, as well as future requirements under SFAS 142, have added a
level of complexity for the Company in its review for impairment of intangible
assets. As a result, the Company concludes that a realistic internal
determination of impaired assets cannot be fairly determined at this time.
Accordingly, the Company, in the fourth quarter of 2001, plans to consider any
additional resources to assist it in determining what, if any, impairments have
occurred. Should this process result in an impairment adjustment, the Company
will fully comply with the requirements of SFAS 121.
8
The intangible assets arising from the CareCentric/MCS merger are amortized
using the straight-line method over the estimated useful lives of the related
assets as more fully disclosed in Note 6. The Company reviews its long-lived and
intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. The measurement of
possible impairment is based upon determining whether projected undiscounted
future cash flow from the use of the asset is less than the carrying amount of
the asset.
Income Taxes
The Company accounts for income taxes using the asset/liability method which
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of temporary differences between the financial statement
carrying amount and the tax bases of assets and liabilities.
Net (Loss) Earnings Per Share
The Company has adopted SFAS No. 128, "Earnings Per Share." SFAS No. 128
replaced the calculation of primary and fully diluted earnings per share with
basic and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share exclude any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share for the quarters ended
September 30, 2000 and 2001 exclude the effects of options, warrants and
conversion rights as they would be antidilutive, and as a result, basic and
diluted earnings are the same for the quarters ended September 30, 2000 and
2001. Per share amounts for all periods have been presented in conformity with
SFAS No. 128 requirements.
Reclassification
Reclassifications are made periodically to previously issued financial
statements to conform with the current year presentation.
Stock Based Compensation
Stock options are accounted for under Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees," and the provisions of Statement
of Financial Accounting Standards No. 123, Accounting for Stock Based
Compensation (SFAS No. 123 and related interpretations).
Comprehensive Income
For the periods ended September 30, 2001 and 2000, respectively, there were no
components of other comprehensive income.
Recently Adopted Accounting Standards
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) 141, Business Combinations and SFAS
142, Goodwill and Intangible Assets. SFAS 141 is effective for all business
combinations completed after June 30, 2001. SFAS 142 is effective for fiscal
years beginning after December 15, 2001; however, certain provisions of this
Statement apply to goodwill and other intangible assets acquired between July 1,
2001 and the effective date of SFAS 142. Major provisions of these Statements
and their effective dates for the Company are as follows: (i) all business
combinations initiated after June 30, 2001 must use the purchase method of
accounting and the pooling of interest method of accounting is prohibited except
for transactions initiated before July 1, 2001; (ii) intangible assets acquired
in a business combination must be recorded separately from goodwill if they
arise from contractual or other legal rights or are separable from the acquired
entity and can be sold, transferred, licensed, rented or exchanged, either
individually or as part of a related contract, asset or liability; (iii)
goodwill and intangible assets with indefinite lives acquired after June 30,
2001 will not be amortized and effective January 1, 2002, all previously
recognized goodwill and intangible assets with indefinite lives will no longer
be subject to amortization; (iv) effective January 1, 2002, goodwill and
intangible assets with indefinite lives will be tested for impairment annually
and whenever there is an impairment indicator, and (v) all acquired goodwill
must be assigned to reporting units for purposes of impairment testing and
segment reporting. The Company is currently evaluating the impact that SFAS 141
and 142 will have on its financial reporting requirements.
NOTE 2 - CARECENTRIC/MCS MERGER
On March 7, 2000, MCS completed the merger with CareCentric. CareCentric issued
1,489,853 shares of common stock to MCS stockholders in exchange for all of the
outstanding shares of MCS common stock. This number of shares has been adjusted
to reflect a one-for-five reverse stock split that was completed by CareCentric
immediately prior to the merger. In connection with the closing of the merger,
Mestek invested $6.0 million in CareCentric in exchange for 5.6 million shares
9
of Series B preferred stock and warrants to purchase 400,000 shares (on a split
adjusted basis) of CareCentric common stock. Additional information on the
merger is included in the Company's Registration Statement on Form S-4
(Registration No. 333-96529).
As required by generally accepted accounting principles (GAAP), the effects of
the merger on the Company's assets and liabilities have been excluded from the
operating section of the cash flow statement for reporting purposes.
Pro-forma unaudited results assuming the merger and the disposal of the
discontinued segment more fully described in Note 3 took place as of January 1,
2000 are as follows:
For Nine Months Ended September 30,
------------------------------------------
2001 2000
-------------------- ---------------------
Net revenues $ 15,748,000 $ 18,100,000
Net (loss) $ (7,095,000) $ (8,800,000)
Net (loss) per share - basic and diluted $ (1.67) $ (2.24)
NOTE 3 - DISCONTINUED OPERATIONS
On September 28, 2001, CareCentric discontinued its Consulting business segment
by closing the sale of certain of the assets of its wholly-owned subsidiary,
Simione Consulting, Inc., to Simione Consultants, L.L.C. ("Simione"), which is
owned and controlled by William Simione, Jr., a director of the Company. The
total sales price was approximately $2.0 million plus the assumption of certain
liabilities by Simione. The Company's net pre-tax loss on the disposal was
approximately $2.6 million. The Company has accounted for the transaction as a
loss on disposal of discontinued operations in accordance with APB 30.
NOTE 4 - RESTRUCTURING AND OTHER CHARGES
In April 2001, CareCentric approved a plan to close one remote support office
and to downsize the workforce at its remaining facilities. As a result of these
actions the Company recorded a total charge of $675,000 in the quarter ended
June 30, 2001.
The restructuring charge includes $598,000 of employee severance costs and
$77,000 in other exit costs (principally lease termination costs and functional
relocation expenses). The plan entails the elimination of 33 positions, the
layoff of six additional employees and the closing of one non-essential training
and support facility. The Company expects to pay $585,000 in cash related to the
restructuring plan. During the quarter ended September 30, 2001 the Company paid
$175,000 in employee costs and $7,000 in other exit costs. As of October 31,
2001, $469,000 in employee costs and $25,000 in other exit costs have been paid
under the plan and 39 employees have been separated.
NOTE 5 - PURCHASED SOFTWARE, FURNITURE AND EQUIPMENT
Purchased software, furniture and equipment consisted of the following:
September 30, December 31, Estimated
2001 2000 Useful lives
---------------- ----------------- ---------------
Software $ 1,725,000 $ 1,635,000 3 years
Furniture and fixtures 1,409,000 1,551,000 10 years
Computer equipment 4,512,000 4,415,000 5 years
---------------- -----------------
7,646,000 7,601,000
Accumulated depreciation (5,949,000) (5,644,000)
---------------- -----------------
Net purchased software, furniture and equipment $ 1,697,000 $ 1,957,000
================ =================
10
NOTE 6 - INTANGIBLE ASSETS
Intangible assets at September 30, 2001 consisted of the following:
Assets Accumulated Net Book Amortization
Original Cost Disposed (1) Amortization Value Period
--------------- ----------------- ---------------- -------------- -----------------
Developed technology $ 10,650,000 $ 0 $ (2,108,000) $ 8,542,000 8 Years
Assembled workforce 2,300,000 (422,000) (595,000) 1,283,000 5 years
Customer base 1,700,000 (510,000) (209,000) 981,000 9 Years
Goodwill 11,851,000 (2,484,000) (2,143,000) 7,224,000 7 Years
--------------- ----------------- ---------------- --------------
$ 26,501,000 $ (3,416,000) $ (5,055,000) $ 18,030,000
=============== ================= ================ ==============
(1) See Note 3 to the Financial Statements.
NOTE 7 - NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
September 30, 2001 December 31, 2000
------------------ -----------------
Short Term:
----------
Note Payable - Mestek $ 647,000 $ 600,000
Line of Credit $ 5,013,000 $ 5,996,000
------------------ -----------------
$ 5,660,000 $ 6,596,000
================== =================
Long Term:
---------
Convertible Note Payable - B. C. O'Donnell $ 600,000 $ 600,000
Convertible Note Payable - J.E Reed $ 3,500,000 $ -
------------------ -----------------
$ 4,100,000 $ 600,000
================== =================
Line of Credit:
On July 12, 2001, the Company renewed a $6.0 million Loan and Security Agreement
facility (the Wainwright Facility) with Wainwright Bank and Trust Company, a
commercial bank, under which the Company granted a first priority position on
substantially all of its assets as security. The Wainwright Facility was
initially used to pay off the line of credit with Silicon Valley Bank, certain
short-term loans from Mestek, Inc., and a loan from David O. Ellis, and then to
fund the Company's operations. Borrowings under the Wainwright Facility accrue
interest, at the bank's prime rate per annum, require monthly payments of
interest and mature on July 12, 2002. The Company's obligations under the
Wainwright Facility are guaranteed by Mestek in consideration of which the
Company has issued a warrant to Mestek to purchase 104,712 shares of the
Company's common stock.
Convertible Note Payable - Barrett C. O'Donnell:
On November 11, 1999, Simione Central Holdings, Inc. borrowed $500,000 from
Barrett C. O'Donnell on an unsecured basis and executed a promissory note in
connection therewith. Mr. O'Donnell is a director of the Company. When the
CareCentric/MCS merger was completed on March 7, 2000, the Company succeeded to
this obligation. The note payable to Mr. O'Donnell included interest at 9% per
annum, was scheduled to mature on May 11, 2002, and required quarterly payments
of accrued interest. On August 8, 2000, the $500,000 note payable to Mr.
O'Donnell, together with $100,000 of deferred salary, was cancelled in exchange
for a $600,000 subordinated note, convertible into CareCentric common stock at a
strike price of $2.51 per share, with interest at 9% per annum and a five-year
maturity.
Note Payable - Mestek:
The Company is obligated under an unsecured promissory note in the principal
amount of $647,000 payable to Mestek Inc. which bears interest at prime plus one
with interest payable semiannually and which matures on July 30, 2002. This note
covers funds advanced by Mestek to CareCentric to cover payroll and accounts
payable obligations incurred by the Company during the period of its transition
of senior lenders from Silicon Valley Bank to Wainwright Bank and Trust Company
plus the accrued interest thereon for the twelve months ended June 30, 2001.
11
J.E. Reed Facility:
On June 22, 2000, the Company entered into a new financing facility (the J. E.
Reed Facility) provided by John E. Reed, Chairman of CareCentric and the
Chairman and Chief Executive Officer of Mestek, Inc. The J. E. Reed Facility
consists of a $6.0 million subordinated revolving line of credit, convertible
into common stock of the Company at a strike price of $2.51 per share, with
interest at 9% per annum and a five-year maturity. The J. E. Reed Facility can
be drawn down by the Company as needed in $500,000 increments and is secured by
a second position on substantially all of the Company's assets. Borrowings
totaling $3.5 million were outstanding under the J. E. Reed Facility as of
October 31, 2001. The unused capacity under the J.E. Reed line as of October 31,
2001 was $2.5 million. As of September 30, 2001, interest expense totaling
approximately $146,000 had been recorded but not paid on the borrowing under the
J.E. Reed line of credit, which constitutes a default thereunder. Lender has
executed a waiver of default for such non-payment of interest.
The Company is obligated under a number of capital lease obligations originally
entered into by CareCentric related to computer equipment formerly used in
CareCentric's business.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company is engaged in various legal and regulatory proceedings arising in
the normal course of business which management believes will not have a material
adverse effect on its financial position or results of operations.
NOTE 9 - SHAREHOLDERS' EQUITY
Common Shares - Pursuant to the terms of the July 12, 1999 Merger Agreement by
which the Company acquired the stock of CareCentric Solutions, Inc., the Company
was required to issue up to an additional 606,904 shares of common stock to the
former preferred shareholders and noteholders of CareCentric Solutions if the
average closing price of the Company's stock for the period October 1, 2000
through December 31, 2000 did not equal $15.00 per share. Since the Company's
average closing stock price for the fourth quarter of 2000 was less than $15.00
per share, on March 20, 2001, the Company issued 593,688 shares of its common
stock to the former preferred shareholders and noteholders of CareCentric
Solutions. The Company asserted that it was not required to issue 13,216
additional shares of its common stock as well as 150,740 shares of common stock
that were being held by it in escrow under the terms of the CareCentric
Solutions Merger Agreement based upon various indemnification and expense
overages claims it believed it had against the former CareCentric Solutions
preferred shareholders and noteholders. On May 16, 2001, the Company finalized a
settlement of these claims with the representative of the former CareCentric
Solutions parties pursuant to which 88,586 shares of common stock were released
from escrow and distributed to the former CareCentric Solutions preferred
shareholders and noteholders, the remaining 62,154 escrow shares were cancelled,
no additional shares of common stock will be issued, and the parties executed a
comprehensive settlement agreement.
On June 28, 2001, the Company settled a dispute with Star Sterling Corporation
("Star") in connection with the March 26, 1999 asset acquisition of Tropical
Software Services wherein the Company asserted certain claims against Star under
the terms of the original agreement. Under the terms of the settlement, 10,000
shares of the Company's common stock originally issued to Star were returned to
the Company and have been cancelled.
Stock Options - The Company has granted options to purchase an aggregate of
550,797 shares (on a split adjusted basis) of common stock as of September 30,
2001. Of the options granted, none were exercised prior to September 30, 2001
and 22,803 have been cancelled. Of the remaining 527,994 options, 254,244 are
vested and exercisable as of September 30, 2001. The exercise prices range from
$2.51 to $73.55 per share, both on a split adjusted basis.
NOTE 10 - SUBSEQUENT EVENTS
On November 1, 2001, the Company appointed John R. Festa as its President and
Chief Executive Officer, and Mr. Festa assumed full-time responsibilities in
such roles on November 12, 2001. Bruce Dewey, the Company's former President and
Chief Executive Officer, recently accepted appointment as President and Chief
Operating Officer of Mestek, Inc. Mr. Dewey is continuing to serve on the
Company's Board of Directors as Vice Chairman with a focus on strategy related
to product development and business alliances. Mr. Festa's initial salary will
be $200,000 annually, and he will be entitled to an annual bonus based on the
Company's achievement of certain financial, cash flow and performance milestone
goals that are currently being negotiated between Mr. Festa and the Compensation
Committee of the Company's Board of Directors.
12
In connection with Mr. Festa's appointment, the Company has granted to Mr. Festa
210,000 shares of the Company's Series E Preferred Stock. The Series E shares
include the following terms:
o Half of the shares vest over a three (3) year period and the other half are
forfeitable pro rata over a three (3) year period if the Company's
financial, cash flow and performance milestone goals referred to above are
not achieved;
o All of the shares will be vested and not subject to forfeiture immediately
upon a change of control of the Company;
o The shares are convertible into the Company's Common Stock on a one-for-one
basis once the vesting and forfeiture conditions as to those shares have
lapsed;
o The shares shall accrue non-cumulative dividends at the coupon rate of
3-1/2% per year;
o Upon a change of control of the Company, the Series E Preferred Stock will
have an equal priority with the Company's Series B, Series C and Series D
Preferred Stock; and
o Upon a liquidation or winding up of the Company, the Series E Preferred
Stock will be junior in priority to the Series B, Series C and Series D
Preferred Stock.
Mr. Festa, as holder of the Series E Preferred Stock, will also have the right
to receive additional Series E shares through January 31, 2003 (other than
pursuant to a change of control transaction) so as to enable him to maintain his
percentage ownership of the Company's outstanding capital stock if the Company
raises up to an additional $6 million in equity capital. For all such equity
offerings of the Company that result in aggregate consideration in excess of $6
million, Mr. Festa will have the right to purchase securities in such offering
on the same terms and conditions thereof so as to maintain a minimum ownership
percentage of three percent (3%) of the Company's outstanding capital stock on a
fully diluted basis.
In connection with his employment by the Company, Mr. Festa was granted the
right to a sale of business success fee based on the net proceeds to be received
by the Company or its shareholders for the completion of a sale of the Company
during the term Mr. Festa serves as the Company's President and Chief Executive
Officer and for nine (9) months thereafter. Mr. Festa is also entitled to
severance payments equal to 12 months of annual base salary in the event that
Mr. Festa's employment is terminated without cause or within 18 months after a
change of control transaction (defined as the ownership interests in the Company
collectively owned by Mestek, Inc. and John E. Reed falling below 25% of the
aggregate ownership of the Company's outstanding capital stock on a fully
diluted basis).
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Certain statements set forth in Management's Discussion and Analysis of
Financial Condition and Results of Operations constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, and are
subject to the safe harbor created by such sections. When used in this report,
the words "believe", "anticipate", "estimate", "expect", and similar expressions
are intended to identify forward-looking statements. The Company's future
financial performance could differ significantly from that set forth herein, and
from the expectations of management. Important factors that could cause the
Company's financial performance to differ materially from past results and from
those expressed in any forward looking statements include, without limitation,
the inability to close the transactions required to obtain the additional
capital resources described herein, variability in quarterly operating results,
customer concentration, product acceptance, long sales cycles, long and varying
delivery cycles, the Company's dependence on business partners, emerging
technological standards ,the effects of changes in regulations affecting health
care providers, uncertainties regarding the restructuring described herein,
risks associated with acquisitions and the risk factors detailed in the
Company's Registration Statement on Form S-4 (File No. 333-96529) and in the
Company's periodic reports filed with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. This Management's Discussion and
Analysis of Financial Condition and Results of Operations should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto.
Liquidity and Capital Resources
The Company secured $13.0 million in new debt and equity capital during 2000 as
follows:
Source Funding Form Date Closed
------------------------------------ ------------------ ------------------------ ----------------------
John E. Reed $ 1,000,000 Series D Preferred Stock June 22, 2000
John E. Reed 6,000,000 Line of Credit June 22, 2000
Wainwright Bank and Trust Company 6,000,000 Line of Credit July 12, 2000
------------------
$ 13,000,000
==================
Details on these three transactions are described in greater detail in Note 7 to
the accompanying Financial Statements.
The Wainwright Bank and Trust Company Line of Credit was initially used to pay
off the Silicon Valley Bank Line of Credit, certain short term loans from Mestek
Inc., and the note payable to David O. Ellis, and then to fund the Company's
operations. As of September 30, 2001, the unused capacity under the John E. Reed
and Wainwright Bank and Trust Company lines are $2.5 million and $1.0 million,
respectively.
The Company's net borrowings from all sources, representing in effect the
Company's cash utilization rate, were significantly reduced during the three
months ended September 30, 2001, to $0.5 million, as compared with the three
months ended December 31, 2000, March 31, 2001, and June 30, 2001, during which
the Company borrowed $2.7 million, $1.7 million, and $1.28 million,
respectively. The Company repaid approximately $1.0 million to Wainwright Bank
with the proceeds from the asset sale discussed in Note 3 to the financial
statements and, based on internally generated cash forecasts, the Company
expects to borrow no more than $0.5 million through the quarter ending December
31, 2001. As disclosed in the financial statements, the Company has a working
capital deficit of $13.9 million at September 30, 2001.
The Company implemented a restructuring plan in April 2001, as more fully
described herein, in addition to the various other ongoing cost reduction
initiatives undertaken subsequent to the MCS/CareCentric merger on March 7,
2000. The Company believes in light of its ongoing cost reduction efforts that
its funding sources, as described above, will be sufficient to meet its working
capital needs in 2001. The Company remains dependent, however, on its majority
shareholder, J. E. Reed, for its working capital financing needs.
Background
CareCentric, Inc. (formerly known as Simione Central Holdings, Inc.)
("CareCentric" or the "Company") is a leading provider of information technology
systems and related software support services and consulting services designed
to help home health care providers more effectively operate their businesses in
today's environment. The Company's focus is to help home health care providers
14
streamline their operations and better serve their patients. CareCentric offers
several comprehensive software solutions. Each of these solutions provides a
basic set of software applications and specialized modules, which can be added
based on customer needs. These software solutions are designed to enable
customers to generate and utilize comprehensive financial, operational and
clinical information.
The Company sells its software pursuant to non-exclusive license agreements,
which provide for the payment of a one-time license fee. In accordance with SOP
97-2, these revenues are recognized when products are delivered and the
collectibility of fees is probable, provided that no significant obligations
remain under the contract. The Company generally requires payment of a deposit
upon the signing of a customer order as well as certain additional payments
prior to delivery. As a result, the Company's balance sheet reflects significant
customer deposits.
Third party software and computer hardware revenues are recognized when the
related products are shipped. Software support agreements are generally
renewable for one-year periods, and revenue derived from such agreements is
recognized ratably over the period of the agreements. The Company has
historically maintained high renewal rates with respect to its software support
agreements. The Company charges for software implementation, training and
technical consulting services as well as management consulting services on an
hourly or daily basis. The price of such services varies depending on the level
and expertise of the related professionals. These revenues are recognized as the
related services are performed.
The Company believes that continued enhancement of its software systems is
critical to its future success, and anticipates that investment in existing and
new products will continue as needed to support the Company's product
strategies. Costs incurred to establish the technological feasibility of
computer software products are expensed as incurred. The Company's policy is to
capitalize costs incurred between the point of establishing technological
feasibility and general release only when such costs are material. For the three
months ended September 30, 2001 and 2000, the Company did not capitalize any
computer software development costs.
Backlog
The Company had backlog associated with its software operations of approximately
$3.2 million and $4.1 million on September 30, 2001 and December 31, 2000,
respectively. Backlog consists of the unrecognized portion of contractually
committed software license fees, hardware, estimated installation fees and
professional services. The length of time required to complete an implementation
depends on many factors outside the control of the Company, including the state
of the customer's existing information systems and the customer's ability to
commit the personnel and other resources necessary to complete the
implementation process. As a result, the Company may be unable to predict
accurately the amount of revenue it will recognize in any period and therefore
can make no assurances that the amounts in backlog will be recognized in the
next twelve months.
Results of Operations for Three Months ended September 30, 2001
Net Revenues. Total net revenues for the three months ended September 30, 2001
decreased by $2.4 million, or 33.4%, to $4.8 million in 2001 from $7.2 million
in 2000. This decrease is attributable principally to reduced revenue across all
products and services as a result of reduced bookings of software and equipment
sales in the final quarter of 2000 and the first half of 2001 due to
uncertainties in the marketplace over the effect of the implementation of the
Prospective Payment System of reimbursement by Medicare.
Cost of Revenues. Cost of revenues as a percentage of total revenues for the
three months ended September 30, 2001 decreased to 34.5% from 36.5% for the
three months ended September 30, 2000. The improvement in gross margin
percentage resulted from efficiencies achieved from the combination of support
operations and other cost management activities.
Selling, General and Administrative Expenses. Total selling, general and
administrative expenses decreased $0.7 million to $2.6 million for the three
months ended September 30, 2001 from $3.3 million for the three months ended
September 30, 2000. This decrease is principally attributable to synergies
derived from centralization of administrative functions and elimination of
non-essential facilities and excess capacity, and the reduction in force
described in Note 4 to the financial statements.
Research and Development Expenses. Research and development expenses decreased
$0.5 million, or 25.5%, to $1.4 million for the three months ended September 30,
2001 from $1.9 million for the three months ended September 30, 2000. This
15
dollar decrease was attributable primarily to the reduction in force described
in Note 4 to the financial statements. As a percentage of total net revenues,
these expenses increased to 29.6% for the three months ended September 30, 2001
from 26.4% for the three months ended September 30, 2000.
Other Income (Expense). Interest expense for the three months ended September
30, 2001 relates primarily to borrowings under the Company's line of credit
agreement and capital lease obligations and has decreased by approximately
$46,000 from the interest expense incurred during the three months ended
September 30, 2000 as a result of the decrease in the prime interest rate
subsequent to September 30, 2000.
Income Taxes. The Company has not incurred or paid taxes since its inception.
Results of Operations for the Nine Months Ended September 30, 2001
Results of operation for the nine months ended September 30, 2000 included the
operations of the former MCS for six months and the operations of CareCentric
(formerly Simione Central Holdings, Inc.) for only the period subsequent to
March 7, 2000. As a result, a comparison of the 2001 and 2000 Statements of
Operations is not meaningful to an understanding of the Company's relative
performance. Therefore, for purposes of comparability, the following discussion
reflects the assumption that the operations of CareCentric and MCS were combined
on a pro-forma basis for the nine months ended September 30, 2000, as
illustrated in Table 1 below.
Table 1. CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS
(unaudited)
Nine Months Ended September 30,
-------------------------------------------
2001 2000
------------------- -------------------
Net revenues: $ 15,748,000 $ 18,100,000
Costs and expenses:
Cost of revenues 6,188,000 9,343,000
Selling, general and administrative 7,551,000 9,032,000
Research and development 4,789,000 5,166,000
Depreciation and amortization 2,905,000 3,033,000
Restructuring and other charges 675,000 -
------------------- -------------------
Total costs and expenses 22,108,000 26,574,000
------------------- -------------------
Loss from operations (6,360,000) (8,474,000)
Other (expense) income:
Interest expense (958,000) (494,000)
Interest and other income 223,000 14,000
------------------- -------------------
Net loss before taxes (7,095,000) (8,954,000)
------------------- -------------------
Income tax benefit - (154,000)
------------------- -------------------
Net loss $ (7,095,000) $ (8,800,000)
=================== ===================
Net loss per share - basic and diluted $ (1.67) $ (2.24)
=================== ===================
Weighted average common shares -
basic and diluted 4,243,000 3,926,000
=================== ===================
Net Revenues. Total net revenues for the nine months ended September 30, 2001
decreased by $2.4 million, or 13.0%, to $15.7 million in 2001 from $18.1 million
in 2000. These reduced revenues are attributable principally to reduce bookings
of software and equipment sales in the final quarter of 2000 and the first half
of 2001 due to uncertainties in the marketplace over the effect of the
implementation of the Prospective Payment System of reimbursement by Medicare.
Cost of Revenues. Cost of revenues as a percentage of total revenues decreased
to 39.3% for the nine months ended September 30, 2001 from 51.7% for the nine
months ended September 30, 2000. The improvement in gross margin percentage
16
resulted from efficiencies achieved from the combination of support operations
and other cost management activities as well as a reduction in hardware revenues
as a percentage of total revenues.
Selling, General, and Administrative Expenses. Total selling, general and
administrative expenses decreased $1.5 million to $7.6 million for the nine
months ended September 30, 2001 from $9.1 million for the nine months ended
September 30, 2000. This decrease is principally attributable to synergies
derived from centralization of administrative functions and elimination of
non-essential facilities and excess capacity. As a percentage of total net
revenues, selling, general and administrative expenses were 47.9% for the nine
months ended September 30, 2001 compared with 49.9% for the nine months ended
September 30, 2000.
Research and Development Expenses. Research and development expenses decreased
$0.4 million, or 7.7%, to $4.8 million for the nine months ended September 30,
2001 from $5.2 million for the nine months ended September 30, 2000. As a
percentage of total net revenues, these expenses increased to 30.4% for the nine
months ended September 30, 2001 from 28.5% for the nine months ended September
30, 2000.
Restructuring and Other Charges. In April 2001, CareCentric approved a plan to
close one remote support office and to downsize the workforce at its remaining
facilities. As a result of these actions the Company recorded a total charge of
$675,000.
The restructuring charge includes $598,000 of employee severance costs and
$77,000 in other exit costs (principally lease termination costs and functional
relocation expenses). The plan entails the elimination of 33 positions (10% of
salaried employees), the layoff of six additional employees and the closing of
one non-essential training and support facility in Houston, Texas. Employees at
impacted locations have been informed of the restructuring initiatives and
benefits available to them under applicable benefit plans or related contractual
provisions have been communicated. Affected employees will leave CareCentric
using a mixture of voluntary and involuntary separation programs and layoffs.
The Company expects to pay $585,000 in cash related to the restructuring plan.
During the quarter ended September 30, 2001 the Company paid $294,000 in
employee costs and $18,000 in other exit costs. As of October 31, 2001, 39
employees had been separated under the plan. The Company expects to fully
realize savings related to these headcount reductions during the second half of
2001 with estimated ongoing annual net savings $3.2 million. The Company expects
these savings will be realized as reductions in cost of sales and selling,
general and administrative expense, and research and development expense.
Other Income (Expense). Interest expense for the nine months ended September 30,
2001 relates primarily to borrowings under the Company's line of credit
agreement and capital lease obligations and has increased by approximately $0.4
million from the interest expense incurred during the nine months ended
September 30, 2000 as a result of increased borrowing subsequent to September
30, 2000.
Impact of New Accounting Standards
In 1998, the Financial and Accounting Standards Board issued SFAS No. 133 ("SFAS
No. 133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 133 is effective for the Company's fiscal year ending December 31, 2001. The
adoption of SFAS No. 133 did not have a material impact on the Company's
financial position or results of operations.
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) 141, Business Combinations and SFAS
142, Goodwill and Intangible Assets. SFAS 141 is effective for all business
combinations completed after June 30, 2001. SFAS 142 is effective for fiscal
years beginning after December 15, 2001; however, certain provisions of this
Statement apply to goodwill and other intangible assets acquired between July 1,
2001 and the effective date of SFAS 142. Major provisions of these Statements
and their effective dates for the Company are as follows: (i) all business
combinations initiated after June 30, 2001 must use the purchase method of
accounting and the pooling of interest method of accounting is prohibited except
for transactions initiated before July 1, 2001; (ii) intangible assets acquired
in a business combination must be recorded separately from goodwill if they
arise from contractual or other legal rights or are separable from the acquired
entity and can be sold, transferred, licensed, rented or exchanged, either
individually or as part of a related contract, asset or liability; (iii)
goodwill and intangible assets with indefinite lives acquired after June 30,
2001 will not be amortized and effective January 1, 2002, all previously
recognized goodwill and intangible assets with indefinite lives will no longer
17
be subject to amortization; (iv) effective January 1, 2002, goodwill and
intangible assets with indefinite lives will be tested for impairment annually
and whenever there is an impairment indicator; and (v) all acquired goodwill
must be assigned to reporting units for purposes of impairment testing and
segment reporting. The Company is currently evaluating the impact that SFAS 141
and 142 will have on its financial reporting requirements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
As of September 30, 2001, the Company's obligations include variable rate notes
payable and a line of credit bank note with aggregate principal balances of
approximately $9.7 million, which mature at various dates through 2005. The
Company is exposed to the market risk of significant increases in future
interest rates. Each incremental point change in the prime interest rate would
correspondingly increase or decrease the Company's interest expense by
approximately $56,000 per year.
At September 30, 2001, the Company had accounts receivable of approximately $5.7
million net of an allowance for doubtful accounts of $378,000. The Company is
subject to a concentration of credit risk because most of the accounts
receivable are due from companies in the home health industry.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Neither CareCentric nor any of its subsidiaries is currently a party to any
legal proceedings which would be material to the business or financial condition
of the Company on a consolidated basis.
Item 2. Change in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
On July 31, 2001, the Annual Meeting of Stockholders of CareCentric, Inc. was
held. Stockholders present in person or by proxy holding 5,290,639 votes, based
upon ownership of CareCentric common stock and preferred stock, were represented
at the meeting.
Seven Directors of the Company were duly elected to hold office until the next
Annual Meeting of Stockholders or until successors have been duly elected. The
elected Directors and the affirmative votes were as follows:
Votes Against or
Name Affirmative Votes Withheld
---- ----------------- ----------------
John E. Reed 5,286,785 3,854
R. Bruce Dewey 5,290,620 19
Barrett C. O'Donnell 5,286,462 4,177
Winston R. Hindle, Jr. 5,290,620 19
Dr. David O. Ellis 5,286,787 3,852
William Simione, Jr. 5,290,488 151
Edward K. Wissing 5,290,620 19
The number of shares of CareCentric common stock reserved for issuance under the
1997 Omnibus Equity-based Incentive Stock Option Plan was increased from 450,000
shares to 900,000 shares. The affirmative votes for this matter were as follows:
18
Affirmative Votes Votes Against Votes Abstained
----------------- ------------- ---------------
5,092,030 111,126 87,483
Grant Thornton LLP was appointed as the Company's auditors for December 31,
2001. The affirmative votes for this matter were as follows:
Affirmative Votes Votes Against Votes Abstained
----------------- ------------- ---------------
5,277,881 1,542 11,216
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit No. Description
----------- -----------
2.1+ Purchase and Sale Agreement dated September 28, 2001, by and
between the Registrant, Simione Central Consulting, Inc. and
Simione Consultants, L.L.C. (incorporated herein by reference to
Exhibit 2.1 filed with Registrant's Current Report on Form 8-K
filed October 12, 2001.)
-----------------------------
+ In accordance with Item 601(b)(2) of the Registration S-K, the schedules have
been omitted. There is a list of schedules at the end of the Exhibit, briefly
describing them. The Registrant will furnish supplementally a copy of any
omitted schedule to the Commission upon request.
(b) Reports on Form 8-K:
None.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARECENTRIC, INC.
Dated: November 14, 2001 By:/s/ Dennis A. Brauckman
----------------------------------------
DENNIS A. BRAUCKMAN
Vice President - Finance and
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1+ Purchase and Sale Agreement dated September 28, 2001, by and
between the Registrant, Simione Central Consulting, Inc. and
Simione Consultants, L.L.C. (incorporated herein by reference to
Exhibit 2.1 filed with Registrant's Current Report on Form 8-K
filed October 12, 2001.)
-----------------------------
+ In accordance with Item 601(b)(2) of the Registration S-K, the schedules have
been omitted. There is a list of schedules at the end of the Exhibit, briefly
describing them. The Registrant will furnish supplementally a copy of any
omitted schedule to the Commission upon request.
1411321