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| CGHC > SEC Filings for CGHC > Form 10-Q on 3-Aug-2012 | All Recent SEC Filings |
3-Aug-2012
Quarterly Report
Forward-looking Statements
Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may," "would," "could," "should," "expects," "projects," "anticipates," "believes," "estimates," "plans," "intends," "targets" or similar expressions.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, international gold prices, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Overview
We intend to offer a suite of secure, online products that provide consumers with the tools to more effectively manage their health and wellness as well as the ability to manage their personal health records, from all of their healthcare providers whether paper-based or digital. We are part of a trend where people are increasingly trusting on-line services as a way for them to store and manage critical, sensitive information such as medical records, financial records and vital documents.
Our suite of secure, web-based products all are built on an open source technology that allows users, including consumers, affinity groups, membership organizations, small businesses, physicians and health care professionals to easily store and organize information. Our consumer products are built around our trademarked "OneHealthPass" Brand. Our planned site will consist of www.OneHealthPass.com.
OneHealthPass is an easy-to-use, secure web-based Personal Health Record system, or "PHR", which allows documents, images and voice mail messages to be transmitted in and out of our system using a variety of methods, including fax, voice and file upload. OneHealthPass converts documents it receives by fax into Adobe's Portable Digital Format, or PDF, file. These files, as well as voice files and any other uploaded files are stored in the consumer's personal account,
Users can then access their files via the Internet and take advantage of an intuitive, customized filing system that allows them to categorize, annotate and file their records for easy access, organization and retrieval. Users can then print, download, e-mail or fax their records from their account, giving our customers greater control over their own personal health records and other information, which they can share with health care providers and others as they move through the continuum of care.
We plan to initially sell our OneHealthPass Telemedicine product primarily direct to consumers through a direct response advertising campaign.
We recognize the critical nature of managing an individuals' health information requires that our products and advances be implemented with the utmost care to protect the privacy and confidentiality of our customers' data. The Health Insurance Portability and Accountability Act of 1996, commonly referred to as HIPAA, requires covered entities to protect the privacy and confidentiality of protected health information, or PHI, of their patients and customers. Although we are not a covered entity (as that term is defined in HIPAA), we consider it important to take into account the Privacy and Security Standards and other requirements of HIPAA when implementing our products and services and believe that we meet and/or exceed current HIPAA standards.
The Health Information Technology for Economic and Clinical Health Act, commonly referred to as HITECH, enacted on February 17, 2009 as part of the American Recovery and Reinvestment Act, expanded HIPAA's reach beyond that of just covered entities. Now, business associates, defined as an entity that performs a function, activity, or service on behalf of a covered entity and that requires use or access to the information of the covered entities, and vendors of Personal Health Records that use or access information, must also comply with the Privacy and Security Standards of HIPAA. One of the key obligations under HITECH is the requirement to notify individuals when there has been (or there is a strong possibility of) a breach of the individual's information.
While we only rarely function as a business associate to a covered entity, we continue to meet and/or exceed the current HIPAA standards. Further, as a vendor of PHRs, we are implementing policies and procedures and reviewing our relationships with all necessary parties to ensure our compliance with HITECH and its associated regulations.
We plan to continue to take advantage of the burgeoning consumer health information market and leverage recent federal legislation, including the HITECH Act. We believe that the health care reform legislation recently passed by Congress and signed by the President into law represents a significant behavioral shift in how consumers manage their health care because of the requirement that everyone have insurance. We also believe that as medical costs and insurance costs increase, and benefits decrease, healthcare consumers will require greater control over their personal (and their family's) health information.
OneHealthPass with its dynamic PHR enable consumers to store their important medical records and data in one central and secure place where they can manage those records and control how they are accessed and shared. While every healthcare consumer in the U.S., as well as other countries that are focused on health information technology, are potential users of our OneHealthPass Platform, we believe that the product has most appeal to these particular market niches:
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The chronically ill and their families who share information among many doctors; this "co-morbid population" represents a disproportionate share of U.S. health care costs;
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Individuals with Health Savings Accounts who need to carefully manage their eligible expenses over the course of a year;
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Consumers with "senior" parents who, in their role as caregivers, want to be sure they have current medical information readily available to react quickly in case of parental illness;
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Consumers with newborns who will be able to build a complete medical file for the newborn, which can last the newborn's entire life;
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Employees who are forced to change doctors and other providers when their employer changes health insurance and who therefore need to manage the transfer of medical information to their new providers;
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Travelers and businesspeople working overseas who want to ensure that they always have access to their medical records in the event of an emergency.
Our Products
Telemedicine Services The Company intends to contract with strategic alliance partners throughout the country to provide access to our members and customers with the best and broadest market coverage for telemedicine services.
Specialist referral services typically involves a specialist assisting a general practitioner in rendering a diagnosis. This may involve a patient "seeing" a specialist over a live, remote consult or the transmission of diagnostic images and/or video along with patient data to a specialist for viewing later. Recent surveys have shown a rapid increase in the number of specialty and subspecialty areas that have successfully used telemedicine. Radiology continues to make the greatest use of telemedicine with thousands of images "read" by remote providers each year. Other major specialty areas include: dermatology, ophthalmology, mental health, cardiology and pathology. According to reports and studies, almost 50 different medical subspecialties have successfully used telemedicine.
The patient consultations use telecommunications to provide medical data, which may include audio, still or live images, between a patient and a health professional for use in rendering a
Remote patient monitoring uses devices to remotely collect and send data to a monitoring station for interpretation. Such "home telehealth" applications might include a specific vital sign, such as blood glucose or heart ECG or a variety of indicators for homebound patients. Such services can be used to supplement the use of visiting nurses.
Medical education provides continuing medical education credits for health professionals and special medical education seminars for targeted groups in remote locations.
Consumer medical and health information includes the use of the Internet for consumers to obtain specialized health information and on-line discussion groups to provide peer-to-peer support.
Benefits of Telemedicine
Telemedicine has been growing rapidly because it offers three fundamental benefits:
Improved Access For over 40 years, telemedicine has been used to bring healthcare services to patients in distant locations. Not only does telemedicine improve access to patients but it also allows physicians and health facilities to expand their reach, beyond their own offices.
Cost Efficiencies Reducing or containing the cost of healthcare is one of the most important reasons for funding and adopting telehealth technologies. Telemedicine has been shown to reduce the cost of healthcare and increase efficiency through better management of chronic diseases, shared health professional staffing, reduced travel times, and fewer or shorter hospital stays.
Patient Demand Consumers want telemedicine. The greatest impact of telemedicine is on the patient, their family and their community. Using telemedicine technologies reduces travel time and related stresses to the patient. Over the past 15, years study after study has documented patient satisfaction and support for telemedical services. Such services offer patients the access to providers that might not be available otherwise as well as medical services without the need to travel long distances.
OneHealthPass Additional Features
OneHealthPass will offer users multiple ways to enter their personal medical information, including by voice or digital file upload. We believe this capability makes OneHealthPass easier to use than other products in the marketplace and makes our product's information storage features more accessible to potential customers. In addition to the core document conversion, storage and retrieval capabilities, OneHealthPass provides a layer of useful, value-added interactive tools to help users better manage their personal and/or their families' medical records.
Ability to Attach Received Faxes to e-mail Notifications Users can elect to have records attached to the notification e-mail they receive when a new medical record is received into their account. This capability is intended to save users the extra step of logging into their account to view new records, which we believe creates a higher level of convenience and usability.
Health History Users can enter their personal health history, including information about doctors (such as a doctor's name, address and specialty), vaccinations and immunizations, hospitalizations/surgeries, allergies and medical conditions that may affect ongoing healthcare.
Appointment Calendar Feature Users are able to take advantage of a calendar feature to schedule and generate reminders about upcoming doctor and other health-related appointments. These reminders appear when a user logs into his or her OneHealthPass PHR account and also can be sent to the user's e-mail address (or e-mail enabled cell phone) and imported into Microsoft Outlook.
Prescription History and Refill Reminder Feature Users are able to enter their prescriptions, pharmacies and refill dates into their OneHealthPass accounts. The system generates reminders about refills, which are visible to users when they log into their accounts and are sent to their e-mail addresses (or e-mail enabled cell phone).
Drug Information and Interaction Database Users can check for potential interactions across multiple prescriptions and over the counter drugs with this comprehensive database, licensed from Multum. When each user adds a new drug to their MMR PHR prescription history, they can quickly determine if that medication has any kind of negative interaction with other prescriptions they take. This tool is especially vital because drug interactions kill as many as 100,000 Americans each year and consumers who see multiple providers are especially at risk.
Voice Reminders and Messaging We believe our OneHealthPass Records PHR product may create more efficient communication between doctors and patients. In addition to using a patient's personal OneHealthPass Records PHR telephone number to fax health information to a patient's secure on-line account, people can use the telephone number to leave a voice message, such as an appointment reminder, in a secure voice mailbox that is only accessible by the OneHealthPass PHR user. Users can also take advantage of this feature to leave themselves a reminder message such as for a doctor appointment or prescription refill reminder. Our OneHealthPass PHR product is designed to send a user a notification via e-mail when he or she receives a voice message. This gives users a helpful tool that they can access remotely.
Secondary Passwords on Selected File Folders Users can assign a second password to four of the file folders in their OneHealthPass PHR account. This feature creates an additional layer of security for personal vital or medical documents that a OneHealthPass PHR user does not want a doctor to have access to in the event that the user has given the doctor access to the account, or if the user does not want other family members to be able to see selected information.
Health Information Library Users have access to an interactive audio and visual encyclopedia, licensed from a third-party, of over 2,000 health information topics presented in both English and Spanish.
U.S. Healthcare Market
On March 23, 2010, President Obama signed into law a major overhaul of the United States health care and health insurance industries. As part of this overhaul, we anticipate that there will be an increased demand for the cost savings inherent in the use of electronic medical records, particularly the benefits to patients by having a personal health record. Also on February 17, 2009, President Obama signed into law the American Reinvestment and Recovery Act of 2009, or the ARRA, representing the largest government-driven investment in electronic healthcare technologies. Within ARRA, the Health Information Technology for Economic and Clinical Health Act, or HITECH, provisioned more than $19 billion in incentives to healthcare organizations that modernize their medical records systems through the widespread use of health information technology, or HIT. Throughout the process of healthcare reform, the challenge to rein in healthcare expenses will continue to be the nation's long-term fiscal challenge and this creates opportunities for HIT solutions that are shown to create greater efficiencies in care, safety and costs.
Our marketing strategy for our OneHealthPass calls for focus on four sales channels:
Direct to Consumer Marketing We intend to continue to focus on marketing our OneHealthPass directly to consumers via both on-line and off-line advertising vehicles. OneHealthPass is currently available to individuals on a monthly or annual subscription basis.
Corporate Sales and Employee Benefit Offering We are pursuing the human resources and benefits market to secure agreements or strategic arrangements providing for companies to offer our product to their employees and members. We believe the user-friendly nature of OneHealthPass makes it readily acceptable to employees and gives companies a low cost way to demonstrate their employee-friendliness.
Affinity Groups and Membership Organizations OneHealthPass can be bundled with other health or travel-related services. For example, a travel accident insurance company can include our OneHealthPass in its suite of emergency medical and repatriation services for travelers going abroad. We believe giving users the ability to access their medical records in an emergency
Private Label Branding OneHealthPass is designed to allow site pages to be customized with a corporate, affinity group or membership organization logo and content that is specific to that entity. The technology built into OneHealthPass also is designed to allow companies, groups or organization to instantly communicate with hundreds or even thousands of employees in the event of an announcement or emergency situation.
Critical Accounting Policies and Estimates
The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. We use assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. We believe there have been no significant changes in accounting policies during the period ended March 31, 2011.
Recently Issued Accounting Standards
The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements.
Results of Operations
During the three and nine months ended March 31, 2011, we incurred a net loss of $904,806 and $4,388,480, respectively, compared to net loss of $243,491 and $360,393 for the three and nine months ended March 31, 2010, respectively. The increase in our net loss over the comparable period of the prior year is primarily due to the increased cost of wages, salaries, and services as a result of the Company obtaining funding to begin strategic acquisitions and perform due diligence and hire consultants and employees to begin developing the market for the Company's products and technology. Additional consulting, legal and accounting costs were also incurred for the three and nine months ended March 31, 2011 over the same period 2010.
Liquidity and Capital Resources
Liquidity is a measure of a company's ability to meet potential cash requirements. We have historically met our capital requirements through the issuance of stock and by borrowings.
Operating expenses for the Company have been paid from the issuance of stock and convertible notes payable of the Company. At March 31, 2011 the Company had a deficit in working capital (current liabilities in excess of current assets) of $718,657. The working capital deficit at June
Since inception, we have financed our cash flow requirements through issuance of common stock and notes payable. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending generation of revenues. Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings to the extent available or to obtain additional financing to the extent necessary to augment our working capital. In the future we need to generate sufficient revenues from sales in order to eliminate or reduce the need to sell additional stock or obtain additional loans. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.
As of March 31, 2011, the current assets increased by $71,215 when compared to June 30, 2010 due to the receipt of funding in the form of convertible notes payable.
As of March 31, 2011, the current liabilities decreased by $596,153 when compared to June 30, 2010 current liabilities. The primary reason for the decrease is due to the conversion of convertible notes payable to equity.
We anticipate that we may incur operating losses during the next twelve months. The Company's lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. These factors raise substantial doubt about our ability to continue as a going concern. To address these risks, we must, among other things, increase our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.
Going Concern
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. Since we have not generated any revenue, we have negative cash flows from operations, and negative working capital, we have included a reference to the substantial doubt about our ability to continue as a going concern in connection with our condensed consolidated financial statements for the quarter ended March 31, 2011. Our total accumulated deficit at March 31, 2011 was $10,503,610.
The accompanying condensed consolidated financial statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized, and liabilities settled in the ordinary course of business. If we are unable to obtain additional financing we may cease operations and not be able to execute on
The Company had not been compliant with SEC reporting deadlines, but management
has opted to make the necessary filings to be become compliant with the
Securities and Exchange Commission (SEC) reporting guidelines to allow the
Company to raise capital in order to execute on the Company's business strategy.
Management is attempting to raise capital, secure strategic alliances, and to
operate the business strategy, however no there is no assurance that these will
be obtained.
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