MEHO news:
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May 11, 2000
MERIDIAN HOLDINGS INC (MEHO.OB)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS:
The following section contains forward-looking statements that involve risks and uncertainties, including those referring to the period of time the Company's existing capital resources will meet the Company's future capital needs, the Company's future operating results, the market acceptance of the services of the Company, the Company's efforts to establish and the development of new services, and the Company's planned investment in the marketing of its current services and research and development with regard to future endeavors. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a result of certain factors, including: domestic and global economic patterns and trends.
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY.
On June 29, 1999, Dr. Anthony C. Dike joined the Company as Chairman and Chief Executive Officer. Under his employment agreement, the Company was to pay Dr. Dike a base salary of
$12,000 per month. As of January 1, 2000 and up to March 31, 2000, the Company has not paid Dr. Dike any portion of his base salary that was calculated to $36,000. Dr. Dike has agreed to apply the entire amount owed to him by the company towards purchase of more shares of common stock of the company as per the 1999 qualified stock option plan.
Long-term cash requirements, other than normal operating expenses, are anticipated for the continued development of the Company's business plans. The Company will need to raise additional funds from investors in order to complete these business plans. There is no assurance that such funds
will be available, and even when available, the terms may be very prohibitive.
RESULTS OF OPERATIONS
The Company generated revenues from operations of $337,185 during the first quarter ended March 31, 2000, compared to the revenues from operations of $416,385 during fourth quarter ended December 31, 1999. This represents a decrease in revenues of 19.3%. This decrease in revenue is
attributed to decrease in enrolment of membership into Capnet IPA Network, termination of benefits to assigned members, as well as termination of unprofitable contracts with one of the contracted health plans. The Company recorded a net loss from operations of $(72,533) during the three-month period ended March 31, 2000. Apart from pre-opening expenditures of $6,089, there were no revenues and expenses recorded during the period ended March 31, 1999.
The increase in net loss is attributed to the hiring of additional support-staff, acquisition of additional
office equipment, marketing and outside consultants fees.
Management anticipates that general operating expenses will increase, as it pursues, vigorously, its acquisition of new business opportunities and the integration of the existing ones.
PLAN OF OPERATIONS
On January 7, 2000, the Company held its first annual shareholder meeting at the Ramada Inn, in Culver City, California. The new board of directors for the year 2000, was elected, with the addition of four new members to the board of directors. Also, during this meeting, the shareholders approved the company's 1999 stock option plan.
On January 13, 2000, the company also announced that distribution of a dividend in the form of common stock (five shares of InterCare.com, Inc., for each share of free-trading stock of Meridian Holdings, Inc. owned) will take place on January 15, 2000 to shareholders of record as of December 30, 1999. Corporate Stock Transfer (Denver), the company's stock transfer agent, processed the dividend issuance.
On January 18, 2000, the company announced the appointment of Mr. Philip Falese as the Chief Financial Officer. Mr. Falese has over 18 years of professional accounting and legal experience, including three years with the law firm of Foster & Ripley (Los Angeles). As a Program Auditor for
the Los Angeles County Department of Health Services, he created and developed audit programs and conducted on-site reviews of fiscal viability of nearly three dozen contractors engaged in the Department's Tobacco Control Program. He was formerly a staff accountant with Carter, Turner & Co., (CPAs), (Los Angeles) and served as a business consultant to various clients in the areas of strategic business development, asset valuation and financial and tax planning under the umbrella of his consulting firm - Market Street Advisors, LLC. Falese received an MBA from the University of Alabama, a Juris Doctorate from Northrop University School of Law, and an LLM (with a specialty
in tax) from Golden Gate University School of Law. He brings an exceptional depth of knowledge and versatility to the position of chief financial officer and considered a valuable addition to the organization.
Also, on the same day, the company announced that on behalf of its subsidiary InterCare.com, Inc., the company has filed a Registration Statement on Form SB-2 with the Securities and Exchange Commission in anticipation of an initial public offering of InterCare.com, Inc. common stock.
On January 31, the Company announced the acquisition of a 51% ownership interest in Meridian Health Systems, Inc. (Inglewood), a Delaware corporation. As provided by the stock purchase agreement, Meridian Health Systems, Inc. became a subsidiary of Meridian Holdings, Inc. and the
core managed health care unit of the Meridian group of companies. Dennis Youkstetter, who has been active in managed health care business in Southern California for nearly 20 years, will remain as President and CEO of Meridian Health Systems, Inc. Throughout his distinguished career, Youkstetter has organized and managed a variety of health plans, participating in the organization of
Care America, Blue Shield and Viva Health plans in the early 1980s. He was also instrumental in the licensing of Loma Linda University Health Plan, the first tertiary medical school/hospital-sponsored plan in California., which was later sold to Inland Health Plan; Bay Shores Health Plan, the first medical group-sponsored health plan in California.; and Care 1st Health Plan, one of the health plans that provide managed care services in Los Angeles to those eligible for Medi-Cal. He served as the latter organization's first president and CEO.
On February 14, 2000, the Company announced the institution of a ``Frequently Asked Questions'' (FAQs) at the company's web site at www.meho.com with a discussion of the Meridian's Subscription Program and dividend policy for shareholders of the company's common stock. Under the company's Subscription Program, shareholders who own at least 100 shares of stock of the holding company in a single account on a given record date will be given the opportunity to participate in a portion of the initial public offering of a Meridian Holdings, Inc. majority-owned or subsidiary company. In addition to setting forth eligibility requirements, the FAQs provide a discussion of procedures for notification and subscription and typical time frames associated with the program. Parameters for dividend distribution are also provided, along with an explanation of how record dates are determined for such purpose.
On February 18, 2000, the Company announced the timely filing of Form 10KSB for the year ended December 31, 1999, during which the Company indicated that it generated an annual revenue of approximately $1.4 million.
On Febraury 22, 2000, the Company executed a term sheet with Heller Healthcare Finance, a division of Heller Financial, Inc. (Heller) (NYSE: HF - news), for the establishment of a line of credit up to $10 million for up to 80% of
Meridian's net collectable accounts receivable. The revolving line of credit will be available to Meridian for use by the Meridian group of companies to provide ongoing working capital requirements for two years. As of this writing, the Company has not borrowed money from this vendor, nor any loan been granted.
On March 17, 2000, the Company announced that it has engaged the services of NC Capital Markets (one of The National Capital Companies; Irvine), an investment banker specializing in capital formation small cap companies, to assist the company with financing and execution of its
acquisitions and business plans. Founded in 1992 to provide full-service investment banking, brokerage, trading, and financing services primarily focusing on new and rapidly growing companies, NC Capital has a national presence and operates from multiple coast-to-coast locations. Under the
terms of this agreement, the Company will issue 250,000 restricted shares at 0.001 par value for the services to be rendered as per the Financial consulting services agreement dated March 1, 2000.
On March 20, 2000, the Company announced the appointment of Mr. Dale W. Church, Esq., to serve a one-year renewable term on the board of directors of its subsidiary, InterCare.com, Inc. Mr. Dale Church, who will also serve as an advisor to the Meridian group of companies, is currently Chairman and CEO of Ventures & Solutions, LLC, a firm specializing in counseling and consulting to high technology companies. He was formerly a partner in the law firm of McDermott, Will & Emery's (Washington, D.C.). His practice focused on international and United States government contracting,
developing companies, mergers and acquisitions and joint ventures. Mr. Dale Church also served as deputy undersecretary of defense for research and engineering in the Department of Defense from 1977 to 1980, served as counsel to the President's Blue Ribbon Commission on Defense
Management (the Packard Commission), and served as a member of the 1988 Defense Science Board Study Program on commercial products and contracting. He has served on the board of advisors of the American University Business School, the board of advisors of the National Contract
Management Association (NCMA), the board of editors of the NCMA Journal, and the Defense Science Board Task Force on industry-to- industry cooperation. He has written extensively on contract policy and has lectured extensively before major defense, aerospace and electronics industry
associations. Mr. Church serves on the board of directors of a number of private and public corporations.
Admitted to the bar in the District of Columbia and California, Church is a member of the American Bar Association and the Federal Bar Association. He received a BS in business administration from Oregon State University, and he graduated from George Washington School of Law.
On March 22, 2000, the Company entered into a joint venture with Osprey Data Systems Corp. (San Clemente). Pursuant to the agreement, Meridian and Osprey will participate in a global enterprise to cooperatively develop and market e-commerce, e-communications, and e-business solutions worldwide. Under the joint venture, each company will contribute equally to the resources and will benefit equally from the proceeds of venture projects.
To address issues associated with use of the Internet for business and electronic information management, Osprey Data Systems has created hardware and software modules and an information management system that provides enhanced performance, ease-of-use, scalability and multilevel
security, at lower prices than equivalent systems implemented with standard components. Osprey's Net-Gain 2000, for 5-100 users, is designed to improve real-time system performance and to minimize problems associated with entry-level usage, as well as a larger number of networked users in operating system environments such as NT, LINUX, or higher performance systems such as Sun's Solaris. Projects contemplated by the joint venture include the development of hardware and a compatible software suite of products that will enhance automated communication, information processing, filing and group distribution in a highly secure vital private network environment. This technology will provide utility in areas of health care, transaction management, telemedicine and distant learning.
On March 27, 2000, the Company announced the execution of a letter of intent in anticipation of a formal agreement, whereby Meridian will acquire 55% of Osprey Data Systems Corp (San Clemente), a developer of IT hardware and firmware. According to the terms of the contemplated
agreement, Meridian will provide funding to be used for product development and the market launch of Osprey intelligent information management systems. Also, under the terms of the agreement, Osprey Data Systems will become a subsidiary of Meridian Holdings, Inc. A definitive agreement will be executed within 60 days, subject to due diligence review and approval by the board of directors of both companies.
PART II - OTHER INFORMATION
ADDITIONAL INFORMATION
On April 11, 2000, the Board of Directors approved the amendment of the article of incorporation of the registrant, whereby the total number of authorized shares was increased to 100,000,000 Common Stock, and 20,000,000 Preferred Stock all at $.001 par value. Details of this
announcement is contained in the Form 8-K filed on April 11, 2000 and incorporated herein by reference.
On May 8, 2000, the Registrant announced a 3 for 1 forward stock split with a record date of June 15, 2000 and distribution date of June 30, 2000. This is pursuant to consent resolution by the Board of Directors for the best interest of the corporation and shareholders. Details of this announcement is contained in the Form 8-K filed on May 8, 2000 and incorporated herein by reference. |
