UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2003
( ) 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: 0-30018
MERIDIAN HOLDINGS,INC.
----------------------
(Exact Name of Registrant as Specified in its Charter)
COLORADO 52-2133742
------------------------------- ------------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
900 WILSHIRE BOULEVARD, SUITE 500, LOS ANGELES, CALIFORNIA 90017
----------------------------------------------------------------
(Address of Principal Executive Offices)
(213) 627-8878
----------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
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 and, (2) has been subject to such filing
requirements for the past 90 days. Yes ( X ) No ( )
As of September 30, 2002, Meridian Holdings, Inc., Registrant had
9,370,649 shares of its $0.001 par value common stock outstanding.
Page 1 of 12 sequentially numbered pages
Form 10-QSB
Third Quarter 2003
MERIDIAN HOLDINGS, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-13
PART II OTHER INFORMATION
Legal Proceedings 13
Additional Information 13
Signature 13
2
MERIDIAN HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
ASSETS
As of Sept. 30,
2003 2002
========== ==========
Current assets
Cash and cash equivalents $ 8,838 $ 2,071
Restricted Cash (Note 1) 410,973 623,286
Accounts receivable, net of allowance for
doubtful accounts of ($179,812) 1,348,643 1,099,909
Other current assets 81,176 53,140
--------- ----------
Total current assets 1,849,630 1,778,406
Fixed assets, net of accumulated depreciation 45,133 380,122
Pre-paids - 4,541
Investments 3,448,564 3,915,003
--------- ----------
Total assets $ 5,343,327 $ 6,078,072
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 296,879 $ 180,388
Accrued payroll and other - 144,000
Reserve for incurred but not reported claims 216,553 366,258
Accrued interest - 45,716
Line of credit 98,002 65,063
Current portion of long-term debt - 96,375
------- -------
Total current liabilities 611,434 897,800
Long Term liabilities
Loan from majority stockholder/officer - 266,380
Long-term debt, net of current portion 173,638 297,625
--------- ---------
Total liabilities 785,072 1,461,805
========= ==========
Commitments and contingencies
Stockholders' equity
Preferred stock (20,000,000 shares authorized,
par value $0.001; no shares issued and outstanding) - -
Common stock (100,000,000 shares authorized, par value
$0.001; 9,370,649 shares issued and outstanding as
at September 30, 2003 and 9,370,649 as at
September 30, 2002 9,370 9,370
Additional paid-in capital 5,031,475 4,947,424
Accumulated deficit (482,590) (340,527)
---------- ----------
Total stockholders' equity 4,558,255 4,616,267
----------- -----------
Total liabilities and stockholders' equity $ 5,343,327 $ 6,078,072
============ ============
See accompanying notes to Condensed consolidated financial statements
3
MERIDIAN HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(UNAUDITED)
Three Months Ended Sept 30, Nine Months Ended Sept 30,
2003 2002 2003 2002
===== ==== ==== ====
Revenues
HMO Capitation Revenue $ 444,006 $ 492,033 $ 1,399,039 $ 1,323,347
Risk Pool Revenue (Note7) 185,337 264,612 572,696 565,384
Fee For Service 1,808 9,131 2,910 25,327
-------- ---------- ----------- ---------
631,151 765,776 1,974,645 1,914,058
General Operating expenses
Cost of Provider Services 197,746 156,668 698,538 441,360
General and Administrative 364,607 574,644 1,092,615 1,424,444
-------- -------- ---------- -------
Income/loss from operations 68,798 34,464 183,492 48,254
-------- -------- ---------- -------
Other income and expense
Equity interest in earnings
(loss) of investment - 99 - 111,312
Other net 4,066 8,209 68,992 (31,289)
-------- ------- ---------- --------
Net Other 4,066 8,308 68,992 80,023
-------- ------- ---------- --------
Net income/loss before
Extraordinary items. 64,732 26,156 114,500 128,277
-------- ------- --------- ----------
Net income after
Extraordinary items $ 64,732 26,156 $ 114,500 $ 128,277
=========== =========== =========== ==========
Net income/loss per share:
Basic and diluted - Net
Income(loss) $ 0.007 0.0003 $ 0.012 $ 0.014
========== ========== ========== ==========
Weighted average
shares outstanding 9,370,649 9,370,649 9,370,649 9,370,649
See accompanying notes to Condensed consolidated financial statements
4
MERIDIAN HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(UNAUDITED)
Nine Months Ended Sept 30,
2003 2002
===== ======
Cash flows from operating activities
Net income $ 114,499 $ 128,276
Adjustments to reconcile net Loss to net
cash used in operating activities:
Loss on abandonment of software - -
Gain on forgiveness of debt - -
Depreciation and amortization 11,353 26,182
Equity interest in earnings of investments - -
(Increase) decrease in:
Restricted cash (9,981) (292,054)
Accounts receivable (245,155) 385,621
Other current assets (20,390) (39,799)
Accounts payable 71,844 (22,362)
Accrued payroll and other (606,650) (139,475)
Incurred but not reported reserve (49,405) 222,233
Accrued interest (49,172) 45,716
---------- ----------
Net cash used in operating activities (781,057) 314,388
--------- ----------
Cash flow from investing activities
Acquisition of fixed assets (10,792) (368,434)
Disposition of Fixed Asset 315,002 -
Investment in Intercare 298,931 (111,312)
Investments in CGI 163,715 -
---------- ---------
Net cash used in investing activities 766,856 (479,746)
----------- ---------
Cash flow from financing activities
Borrowings from majority stockholder/officer 266,380
Borrowings on long-term debt - -
Repayment of debt - (124,905)
Borrowings on line of credit - 18,785
-------- ---------
Net cash (used in) provided by financing activities - 160,260
-------- ---------
(Decrease) increase in cash and cash equivalents (14,201) (5,148)
Cash and cash equivalents, beginning of period 23,040 7,219
---------- ----------
Cash and cash equivalents, end of period $ 8,838 $ 2,071
========== ==========
See accompanying notes to Condensed consolidated financial statements
5
MERIDIAN HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
1. General
Basis of Reporting
The interim accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles ("GAAP") for interim financial information and with the
instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal, recurring
accruals) considered necessary for a fair presentation have been included.
For further information, management suggests that the reader refer to the
audited financial statements for the year ended December 31, 2002 included in
its Annual Report on Form 10-KSB. Operating results for the nine-month
period ended Septmber 30, 2003 are not necessarily indicative of the results of
operations that may be expected for the year ending December 31, 2003.
The interim accompanying unaudited condensed consolidated financial statements
include the operations of the Company and its majority-owned subsidiary
Corsys Group Limited.
Cash And Cash Equivalents
The Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents. From time to time, the Company
maintains cash balances with financial institutions in excess of federally
insured limits.
Nature of Operations
Meridian Holdings, Inc. (the "Company") was incorporated under the laws of the
State of Colorado on October 13, 1998. The Company is located in the City of
Los Angeles, California, U.S.A. and contracts with physicians to provide health
care services primarily within the area of Los Angeles County.
The Company is an acquisition-oriented holding company focused on building,
operating, and managing a portfolio of business-to-business companies. It seeks
to acquire majority or controlling interests in companies engaged in e-commerce,
e-communication, and e-business services, which will allow the holding company
to actively participate in management, operations, and finances. The Company's
network of affiliated companies is designed to encourage maximum leverage of
information technology, operational excellence, industry expertise, and
synergistic business opportunity.
2. Investments
InterCare
On September 18, 1999, the Company acquired 51% of all the outstanding Common
Stock of InterCare in exchange for services and assumption of certain debts of
InterCare. During fiscal year 2000, additional stock issued by InterCare
combined with a dividend distribution by the Company of InterCare stock
resulted in a net decrease in the Company's ownership percentage to 32% as at
December 31, 2000. A dividend of approximately $160,800 was recorded reflecting
the relative net book value of the Company's investment in InterCare that was
distributed to Meridian Holdings, Inc., shareholders as at that time.
On April 10, 2003, the board of directors of the registrant approved the
transfer of certain assets of the registrant to Meridian Medical Group, P.C, an
affiliated entity, valued at $675,022, in exchange for forgiveness of $714,833
debt owed by the registrant. As a result of the above incident, the registrant
completely divested itself from InterCare DX, Inc.
6
CGI
On December 10, 1999, the Company agreed to acquire a 20% equity interest in CGI
for common stock. On December 20, 1999, the board of directors authorized the
issuance of 4,000,000 pre-split (adjusted to 12,000,000 post-split) shares of
common stock in consideration for the 20% of the interest in CGI. At the date
of the transaction, the Company's shares opened at a price of $3 per share.
Between September 1, 1999 and the acquisition date, the Company's stock sold
within a range of $.25 to $3.25 per share (an average of $.97 per share).
Because of the limited trading history of the Company, the six-month average was
deemed to be a fair valuation of the transaction, resulting in a total
investment balance of $3,880,000 as of December 31, 2000 and 1999. The
shareholders of CGI were also issued warrants to purchase an additional
1,000,000 pre-split (adjusted to 3,000,000 post-split) shares of common stock at
$2 pre-split share (or approximately $0.67 on a post-split basis) over a
five-year period as a hedge against any fluctuation of the share price of the
common stock in the immediate future. These warrants will expire on December
30, 2004, and none have been exercised as of September 30 , 2003.
3. Fixed Assets
Fixed assets consist of the following:
As of
Sept 30, 2003 December 31,2002
Computer equipment $ 99,934 $ 87,574
Leasehold improvements 6,500 6,500
Office furniture, fixtures and equipment 61,915 61,915
Software 25,803 25,803
Medical equipment 6,654 6,654
ICE software source code - 350,000
-------- -------
200,806 538,446
Less accumulated depreciation (155,673) (158,324)
--------- --------
$ 45,133 $ 380,122
========= ==========
4. Line of Credit
The Company has a $50,000 line of credit with a financial institution. Related
advances bear interest at 6.5%, and interest is payable monthly. The line of
credit expires March 21, 2004.
5. Long-term Debt
The Company has various loans with financial institutions and majority
shareholder, with interest rates ranging from 4% to 15% and maturity
dates ranging from 2015 to 2024.
6. Risk Pool Agreement
The Company is a party to a Risk Pool Agreement (the "Agreement") with
Tenet HealthSystem Hospitals, Inc. ("Tenet"). Pursuant to the Agreement, 50% of
the monthly capitation revenue is received directly by the Company, and the
remaining 50% is deposited into an escrow account from which Cap-Management
Systems, Inc., a subsidiary of Tenet pays all facility related claims
expenses, reinsurance expenses, make allowance for IBNR reserve, and
retains a management fee, the Company is responsible for 50% of Profit
(loss) after all institutional claims reinsurance and management fees are paid,
and Incurred But Not Reported ("IBNR") reserve have been accounted for.
These revenues and expenses have been reflected in the accompanying
7
consolidated statements of operations for the for the quarters ended
September 30, 2003 and 2002.
The Company has also reflected the monies in the escrow account as of September
30, 2003 and September 30, 2002 as restricted cash in the accompanying
consolidated balance sheets. Additionally, Cap-Management Systems, Inc.,
provides the Company with an estimate as to the incurred but not reported
reserve, which has been recorded as such in the accompanying consolidated
balance sheets.
Other Events
On Septemebr 19, 2003, the company announced that it has negotiated on behalf
of Capnet IPA physician network a capitated risk contract with one of the
federally qualified HMO located in Los Angeles County, operating within
Southern California. This contract will be effective September 1, 2003. The
registrant believes that this new contract will increase it's revenue
significantly.
Subsequent Events
On October 10, 2003, the registrant was informed that the Tenet HealthSystems
Hospitals contract with the County of Los Angeles Community Health Plan, was
renewed for another successive contract period.
8
MERIDIAN HOLDINGS, INC.
THE COMPANY
Meridian Holdings, Inc. (the "Company") was incorporated under the laws of the
State of Colorado on October 13, 1998. The Company is located in the City of
Los Angeles, California, U.S.A. and contracts with physicians to provide health
care services primarily within the area of Los Angeles County.
The Company is an acquisition-oriented holding company focused on building,
operating, and managing a portfolio of business-to-business companies. It seeks
to acquire majority or controlling interests in companies engaged in e-commerce,
e-communication, and e-business services, which will allow the holding company
to actively participate in management, operations, and finances. The Company's
network of affiliated companies is designed to encourage maximum leverage of
information technology, operational excellence, industry expertise, and
synergistic business opportunity.
The Company also provides medical services management to its' Capnet IPA health
care provider network. We provide the following services:
- disease management -- a method to manage the costs and care of high risk
patients and produce better patient care
- quality management -- a review of overall patient care measured against
best medical practice patterns
- utilization management -- a daily review of statistical data created by
encounters, referrals, hospital, admissions and nursing home information
- claims adjudication and payment
Under our model, the primary care physicians maintain their independence
but are aligned with a professional staff to assist in providing cost effective
medicine. Each primary care physician provides direct patient services as a
primary care doctor including referrals to specialists, hospital admissions
and referrals to diagnostic services. These physicians are compensated on a per
member per month capitation basis.
We believe our expertise allows us to provide a service and manage the risk
that health insurance companies cannot provide on an efficient and economic
level. Health insurance companies are typically structured as marketing entities
to sell their products on a broad scale. Due to mounting pressures from the
industry, managed care organizations have altered their strategy, returning to
the traditional model of selling insurance and transferring the risk to a
provider service network such as us. Under such arrangements, managed care
organizations receive premiums from the Healthcare Financing Administration
(HCFA), state Medicaid programs and other commercial groups and pass a
significant percentage of the premium on to a third party such as us, to
provide covered benefits to patients, including sometimes pharmacy and other
enhanced services. After all medical expenses are paid, any surplus or deficit
remains with the provider service network. When managed properly, accepting
this risk can create significant surpluses.
SELECTED FINANCIAL DATA
The Company had net working capital of $ 1,238,296 as at September 30, 2003
compared to $ 880,606 at September 30, 2002. This represents an increase
in working capital of 41%. This increase in working capital is due to
decrease in current liabilities during the reporting period.
The selected financial data set forth above should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and notes thereto.
9
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 develop new products and 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.
We believe that we will be able to fund our capital commitments, operating cash
requirements and satisfy our obligations as they become due from a combination
of cash on hand, restricted cash as they become available, and expected
operating cash flow improvements through HMO premium increases as well as
royalities from software licensing.
However, there can be no assurances that these sources of funds will be
sufficient to fund our operations and satisfy our obligations as they become
due.
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.
If we need additional capital to fund our operations, there can be
no assurance that such additional capital can be obtained or, if obtained, that
it will be on terms acceptable to us. The incurring or assumption of additional
indebtedness could result in the issuance of additional equity and/or debt which
could have a dilutive effect on current shareholders and a significant effect on
our operations.
RESULTS OF OPERATIONS
THE FINANCIAL RESULTS DISCUSSED BELOW RELATE TO THE OPERATION OF MERIDIAN
HOLDINGS FOR THE THREE MONTHS ENDED AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AS
COMPARED TO THE THREE MONTHS ENDED AND NINE MONTHS ENDED SEPTEMBER 30, 2002.
REVENUE
Medical services (Capitation) revenues decreased by 10% from $492,033 for
the three months ended September 30, 2002 to $ 444,006 for the three months
ended September 30, 2003, and increased by 6% from $1,323,347 for the nine
months ended September 30, 2002 to $1,399,039 for the nine months ended
September 30, 2003. The decrease in revenue for the three months ended September
2003 is due to decreased membership enrolment in the Capnet IPA physician
network. The increase during the nine months ended September 2003 is due to
increased overall membership enrollment in the Capnet IPA physician network.
Risk pool revenue for the three months ended September 30, 2003 was
$185,337, a decrease of 30% compared to $264,612 for the same period in 2002.
For the nine months ended September 30, 2003, risk pool revenue was $572,696,
an increase of 1 % compared to $ 565,384 for the nine month ended September
30, 2002. The decrease in risk pool revenue for the three months ended September
2003 was due to decrease in membership enrolment, with concomitant increase in
claims expense.
We provided managed care services for approximately 75,000 and 55,000 member
months (members per month multiplied by the months for which services
were available) during the nine months ended September 30, 2003 and 2002,
10
respectively.
Revenue generated by our managed care entities under our contracts with
HMOs as a percentage of medical services revenue was approximately 100%
during the nine months ended September 30, 2003 and 2002 respectively. Revenue
generated by the Los Angeles County Community Health Plan ("CHP") contracts was
99% of medical services revenue for the nine months ended September 30, 2003
and 2002, respectively. Revenue generated by LACARE Health Plan ("LACARE")
contract was approximately 1% of medical services revenue for the three and
nine months ended September 30, 2003 and 2002, respectively.
EXPENSES
Of the $364,607 General Operating expenses for the three months ended
September 30, 2003, $197,746 was paid for the cost of provider services, which
consist of capitation payments to our contracted primary care providers
or 45% of medical services revenue after giving account to IBNR reserves,
compared to $156,668 or 32% of medical services revenue for the three month
period ended September 30, 2002.
General and administrative expenses were $ 364,607 or 58 % of total revenues
and $574,644 or 75% of total revenues, for the three months ended September
30, 2003 and September 30, 2002 respectively and $1,092,615 or 55% of total
revenues compared to $1,424,444 or 74% of total revenues for the nine months
ended September 30, 2003 and 2002 respectively. Medical claims expenses,
for the nine month period ended September 30, 2003 were $482,314 or 24% of
medical services revenue, compared to $488,582 or 25.5% of medical services
revenue for the nine month period ended September 30, 2002.
Medical claims represent the costs of medical services provided by other
healthcare providers other than our contracted primary care providers,
but which are to be paid by us for individuals covered by our capitated risk
contracts with HMOs. Our Medical claim loss ratio for nine months ended
September 30, 2003 is 89% of total revenue as compared to 66% for comparable
period in 2002. Our Medical Claim Loss Ratio varies from quarter to quarter
due to fluctuations in utilization, the timing of claims paid by the HMOs
on our behalf, as well as increases in medical costs without counter
balancing increases in capitation revenues.
For the three months ended September 30, 2003, payroll and employee benefits
for administrative personnel was $147,131 or 23% of total revenues, compared to
$111,913 or 15% of revenue for comparable period in 2002, respectively.
Payroll and employee benefits for administrative personnel was $375,320 for
the nine months ended September 30, 2003, or 19% of total revenues, compared to
$349,995 or 18% of revenue for comparable period in 2002. The increase in
employee payroll expenses was due to hiring additional support staff
INCOME/LOSS FROM OPERATIONS
The registrant recorded a profit from operations for the three months ended
September 30, 2003 of $68,798, or 11% of total revenues, compared to a
profit of $34,464, or 4.5% of total revenues, for the three months ended
September 30, 2002.
During the nine months ended September 30, 2003, the registrant recorded a
profit from operations of $183,492, or 9% of total revenues compared to
a profit from operations of $48,254 or 2.5% of total revenues for the nine
months ended September 30, 2002. The increase in net profit from operations are
due to the decrease in operating expenses, decrease in cost of medical claims
paid and outside consultants fees.
CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS
This Form 10-QSB contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
11
Securities Exchange Act of 1934. When used in this Form 10-Q, the words
"believe," "anticipate," "think," "intend," "plan," "will be," and similar
expressions, identify such forward-looking statements. Such statements regarding
future events and/or the future financial performance of our Company are subject
to certain risks and uncertainties, which could cause actual events or our
actual future results to differ materially from any forward-looking statement.
Certain factors that might cause such a difference are set forth in our Form
10-K for the period ended December 31, 2002, including the following: our
success or failure in implementing our current business and operational
strategies; the availability, terms and access to capital and customary trade
credit; general economic and business conditions; competition; changes in our
business strategy; availability, location and terms of new business development;
availability and terms of necessary or desirable financing or refinancing; labor
relations; the outcome of pending or yet-to-be instituted legal proceedings;
and labor and employee benefit costs.
Medical claims payable include estimates of medical claims expenses incurred
by our members but not yet reported to us. These estimates are based on a number
of factors, including our prior claims experience and pre-authorizations
of treatment. Adjustments, if necessary, are made to medical claims expenses in
the period the actual claims costs are ultimately determined. We cannot assure
that actual medical claims costs in future periods will not exceed our
estimates. If these costs exceed our estimates, our profitability in future
periods will be adversely affected.
Pursuant to the Medicaid program, the federal government supplements
funds provided by the various states for medical assistance to the medically
indigent. Payment for such medical and health services is made to providers in
an amount determined in accordance with procedures and standards established by
state law under federal guidelines. Significant changes have been and may
continue to be made in the Medicaid program which could have an adverse effect
on our financial condition, results of operations and cash flows.
During certain fiscal years, the amounts appropriated by state legislatures
for payment of Medicaid claims have not been sufficient to reimburse providers
for services rendered to Medicaid patients. Failure of a state to pay Medicaid
claims on a timely basis may have an adverse effect on our cash flow, results
of operations and financial condition.
PLAN OF OPERATIONS
On September 16, 2002, the Company announced the release of version 3.0 of
its' flagship software application known as ICE(tm), a scalable healthcare
software solution that integrates every aspect of the healthcare enterprise,
designed for information tracking, error reduction, patient safety.
ICE 's extensive, scalable system flexibility allows its adaptation to clinical
workflow, operating independently in centralized and decentralized facilities.
The program features intuitive order entry, "tapering" orders, a clinical
knowledge base, digital video enhanced patient education module, real-time
electro-physiological data capture and display, voice command, voice
recognition, digital dictation module and numerous other capabilities to
complement and document the diagnostic and treatment processes, including
unlimited free-text notes.
ICE provides practical business solutions unique to current health care
environments, where error reduction, medical necessity checking, HIPAA
compliance and revenue loss reduction are essential. The software meets HL-7
standards, operating as a stand-alone system or integrated with other Legacy or
third-party healthcare applications.
Microsoft OCX, GRID, SQL Server and PUSH technologies are provided on ICE , and
the system provides real-time information to physicians and other healthcare
providers on a need-to-know basis. Maximized information displays increase
workflow efficiency by minimizing mouse clicks and screen changes.
12
ICE is available for both inpatient and outpatient clinical documentations,
thus enabling healthcare providers to create a life-time longitudinal multimedia
patient clinical record.
InterCare.com-Dx Inc. an affiliate of the Company has now embarked on aggressive
marketing and sales efforts in other to introduce the application into the
highly competitive healthcare market. As of this writing, no sales prospects
have been closed, however, this event represents a significant milestone in the
Company's overall business plan. The Company anticipates a significant revenue
increase in future from software licensing royalties.
RECENT EVENTS
On September 19, 2003, the company announced that it has negotiated on behalf
of Capnet IPA physician network a capitated risk contract with one of the
federally qualified HMO located in Los Angeles County, operating within
Southern California. This contract will be effective September 1, 2003. The
registrant believes that this new contract will increase it's revenue
significantly.
On October 10, 2003, the registrant was informed that the Tenet HealthSystems
Hospitals contract with the County of Los Angeles Community Health Plan, was
renewed for another successive contract period.
On November 5, 2003, the board of directors approved the appointment of
Mr. Michael S. Muldavin, as a new member of the Board of Directors of the
registrant, following the acceptance of the resignation of Mr. Scott Wellman,
Esq., as a member of the board of directors.
PART II - OTHER INFORMATION
LEGAL PROCEEDINGS
As of this writing the Company is involved in various litigations stemming from
its' purchase of the assets of Sirius Computerized Technologies of Israel and
these litigations are in various stages of the legal process. (Please see form
10qsb of Second Quarter of 2003 filed with SEC at www.sec.gov)
From time to time, we may be engaged in litigation in the ordinary course of
our business or in respect of which we are insured or the cumulative effect of
which litigation our management does not believe may reasonably be expected to
be materially adverse. With respect to existing claims or litigation, our
management does not believe that they will have a material adverse effect on
our consolidated financial condition, results of operations, or future
cash flows.
ADDITIONAL INFORMATION
Item 6. Exhibits and Reports on Form 8-K
31.1 Certification pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
of Anthony C. Dike
31.2 Certification pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
of Foday Sorsor Conteh
32.1 Certification pursuant to Section 906 of The Sarbanes-Oxley Act of 2002
of Anthony C. Dike and Foday Sorsor Conteh
SIGNATURE
Pursuant to the requirements of Section 12 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.
Date: November 13, 2003 By: /s/ Anthony C. Dike
____________________________________
Anthony C. Dike
Chief Executive officer
13
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Anthony C. Dike, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Meridian Holdings,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such evaluation; and
c) disclosed in this quarterly report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control over financial reporting.
Date: Novemebr 13, 2003
By:_/s/ Anthony C. Dike
Anthony C. Dike
Chairman and CEO (Principal Executive Officer)
14
EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Foday Sorsor Conteh, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Meridian Holdings,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such evaluation; and
c) disclosed in this quarterly report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control over financial reporting.
Date: Novemebr 13, 2003
By:_/s/ Foday Sorsor Conteh
Foday Sorsor Conteh
Vice President Finance
15
Exhibit 32.1
CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Meridian Holdings, Inc. (the
"Company") on Form 10-QSB for the period ending June 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof
(the "Report"), we, Anthony C. Dike, the Chief Executive Officer, and Mr.
Foday Sorsor Conteh, Vice President Finance, of the Company, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906,
or other document authenticating, acknowledging, or otherwise adopting the
signature that appears in typed form within the electronic version of this
written statement required by Section 906, has been provided to Meridian
Holdings, Inc., and will be retained by Meridian Holdings, Inc., and
furnished to the Securities and Exchange Commission or its staff upon request.
DATE: November 13, 2003 By: /s/ Anthony C. Dike
-------------------
Anthony C. Dike
Chairman and CEO
By: /s/ Foday Sorsor Conteh
-------------------
Foday Sorsor Conteh
Vice President Finance
16