SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
Commission File Number 0-32601
AMERICASDOCTOR, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
33-0597050 | |
| (State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
1325 Tri-State Parkway, Suite 300
Gurnee, Illinois 60031
(Address of Principal Executive Offices, Including Zip Code)
(847) 855-7500
(Registrants Telephone Number, Including Area Code)
(Former Name or former address, if changed since last report)
Securities registered pursuant to Section 12(b):
None
Securities to be registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.001
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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨ No x
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
There is no public market for the common stock of AmericasDoctor, Inc. At March 1, 2003, there were 3,430,043 shares of Class A common stock, par value $.001 per share, and 685,324 shares of Class B common stock, par value $.001 per share, of AmericasDoctor, Inc. outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates by reference certain information from the Schedule 14C to be filed in connection with the 2003 annual meeting of stockholders of AmericasDoctor, Inc.
FORWARD-LOOKING STATEMENTS
We make statements in this annual report on Form 10-K that are not historical facts. These forward-looking statements can be identified by the use of terminology such as believe, hope, may, anticipate, should, intend, plan, will, expect, estimate, project, positioned, strategy and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. These risks and uncertainties include unanticipated trends in the clinical research industry, changes in healthcare regulations and economic, competitive, legal, governmental, and technological factors affecting operations, markets, products, services and prices. The forward-looking statements included in this annual report on Form 10-K are not guarantees of future performances, and actual results could differ from those contemplated by these forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this annual report on Form 10-K will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
PART I
ITEM 1. BUSINESS
Unless otherwise noted, references to AmericasDoctor, we, our or us mean AmericasDoctor, Inc., a Delaware corporation, and its subsidiary, AmericasDoctor.com Coordinator Services, Inc., a Delaware corporation. Our principal executive offices are located at 1325 Tri-State Parkway, Suite 300, Gurnee, Illinois 60031, and our telephone number is (847) 855-7500.
Company Overview
We are a pharmaceutical services company that combines and integrates physician researchers in conducting clinical research trials to assist the pharmaceutical industry in developing, positioning and promoting its products. As of March 1, 2003, we offered clinical research services through approximately 175 independently owned investigative sites encompassing approximately 500 principal investigators, with over 1,400 total physicians, operating in 32 states in the United States.
We were originally incorporated in the State of California on November 23, 1993 and reincorporated on September 19, 1996 in the State of Delaware. On January 6, 2000, our wholly owned subsidiary merged with AmericasDoctor.com, Inc., an interactive Internet healthcare information site for consumers based in Maryland. In this annual report, the merger is sometimes referred to as the Merger and the Maryland-based AmericasDoctor.com, Inc. is sometimes referred to as Old AmDoc. Following the Merger, Old AmDoc became our wholly-owned subsidiary and changed its name to AmericasDoctor Internet Operations, Inc. and we changed our corporate name to AmericasDoctor.com, Inc. In November 2001, we changed our corporate name to AmericasDoctor, Inc. In December 2002, Old AmDoc was merged into us.
In late 2001, we discontinued the provision of on-line services to hospitals. Since that time we have focused on our core business, research services.
Research Services
General
We have built a network of approximately 175 independently owned investigative sites to facilitate and coordinate independent clinical research trials on drugs for pharmaceutical and biotechnology companies and contract research organizations, or CROs, located throughout the world; these entities are commonly referred to as sponsors. Each of the sites in our network is a party to an exclusive clinical research services agreement with us. Pursuant to the agreement, we perform various services for the site through our central office or management services company, including patient recruitment, source documentation, regulatory services, quality assurance and other consultation services. Although we provide various services to facilitate clinical research, the actual clinical trials are performed by the investigative sites. Through our network of investigative sites, we provide sponsors of clinical research with study management services, including access to experienced investigators and study
2
coordinators and large numbers of patients and centralized management of clinical research studies. These capabilities are designed to facilitate study start-up and quality and accuracy of study data. Our network of investigative sites provides sponsors with the ability to complete clinical research trials quickly and efficiently. In 2002, we provided site selection and management services to approximately 160 sponsors. Our business is currently focused on the U.S. markets.
As of March 1, 2003, our network included investigative sites that performed clinical research trials in a wide range of therapeutic areas, including:
| cardiology |
endocrinology |
gastroenterology |
neuroscience | |||
| pulmonology |
rheumatology |
urology |
womens health |
Our services allow investigative sites in our network to build and sustain successful clinical research businesses without the cost of maintaining their own infrastructure and personnel locally. By facilitating study start-up activities and providing management support and patient recruitment, we assist the investigative sites in growing their research practices.
Our board of directors includes two practicing physicians who are associated with investigative sites in our network. We believe this allows us to quickly and efficiently obtain the input and guidance of physicians that are actively participating in our business. We believe that we are able to quickly respond to the concerns of physicians in our network and meet their needs.
The Pharmaceutical Industry
Before a new pharmaceutical or biotechnology product can be marketed in the U.S., it must undergo extensive testing and regulatory review to determine its relative safety and effectiveness. Companies seeking approval of these products are responsible for performing and analyzing the results of preclinical and multi-phase clinical trials. Preclinical testing typically lasts for up to three years and involves animal testing and laboratory analysis to determine the basic biological activity and safety of the product. Upon successful completion of the preclinical phase, the product undergoes a series of clinical tests in humans, including healthy volunteers as well as patients with the targeted disease. The clinical trial phase, which typically lasts five to seven years, is generally longer than preclinical testing. In the United States, preclinical and clinical testing must comply with the requirements of Good Clinical Practices and other standards promulgated by the Food and Drug Administration, or the FDA, and other federal and state governmental authorities.
The clinical research process generally has been inefficient and costly for sponsors, requiring the expenditure of considerable resources and efforts associated with initiating study start-up, meeting enrollment quotas and collecting complete and consistent data. Historically, sponsors have had to identify and negotiate contracts and study budgets with numerous geographically dispersed clinical research investigators, a process which impedes quick study start-up. These clinical trials are reviewed and approved by a separate institutional review board for each research site participating in a study.
The need of pharmaceutical and biotechnology companies to both produce new drugs at low costs and comply with governmental regulations drives the clinical research industry. Competition and the increasing pressure to control costs are forcing pharmaceutical and biotechnology companies to more efficiently develop new drugs. Furthermore, pharmaceutical and biotechnology companies are actively seeking ways to save time in the clinical development process in order to bring products to market faster. By getting their products to the market faster, these companies can more quickly recover their research and development costs and achieve higher prices on their patented products before they lose their patent protection and generics enter the market. In an effort to save time and cut costs, sponsors often outsource certain aspects of the clinical research process to third parties, including research networks.
Recent publications report that investigator-prescribers, physicians who conduct clinical trials, play a major role in decreasing the time it takes to bring products to market. In addition, trade articles have cited the dramatic effect on the market success of a new pharmaceutical in the first three years in the market that is attributable to the investigator-prescriber. Clinical investigators prescribe the new drug at nearly double the rate of comparable
3
physicians who were not involved in the clinical research phase of the drugs development. Published articles have noted that physicians who are clinical investigators learn a lot about a specific drug, how to use the drug, and what its strengths and weaknesses are compared to other medicines before the drug is approved for use. This familiarity with the medicine may accelerate the clinical investigators use of the medicine when it is marketed. Because of this connection, pharmaceutical sponsors are pursuing more private practice physicians to be involved in the clinical research of new drugs both to speed the clinical development, and to assist the success of the market launch of the product.
Investigative Sites
The investigative site industry includes all of the clinical investigators who enroll patients in clinical trials and collect information at the patient level for pharmaceutical and biotechnology companies and CROs. The investigative site industry is facing significant cost reduction pressures as a result of the pressures on pharmaceutical and biotechnology companies to reduce costs and the amount of time required to bring a drug to market. Recognizing these increased pressures and the beneficial effects of utilizing physician investigators, sponsors of clinical research have reduced their use of academic medical centers for clinical studies and have increased their use of private practice research sites. In many instances, private practice physician sites can provide greater access to patients and the ability to conduct trials more rapidly and efficiently than academia. In addition, participation in clinical trials by private physicians has increased as healthcare providers discover that they are able to offer patients access to more advanced therapies and the opportunity to receive free or reduced-cost medical care.
Although a few of the investigative sites in our network conduct only clinical research trials, the majority of the investigative sites in our network are owned by private practice physicians. The size of the private physician practices in our network range from one physician to approximately twenty physicians. Typically, the investigative sites in our network consist of two to four physician partners in a private practice medical office. We require the investigative sites to enter into a clinical research services agreement with us. These agreements govern the terms and conditions upon which the investigative site performs studies and outlines the scope of services we provide to the sites. Pursuant to the terms of the clinical research services agreement, all clinical research services performed by the site are required to be conducted exclusively through AmericasDoctor, except for studies in which we elect not to participate. In addition, these agreements contain non-competition and non-solicitation covenants that limit or prohibit these sites from competing with us or hiring our personnel for a period of time after the termination of the agreement. The clinical research services agreement provides that a percentage of the contract amount paid to us by study sponsors will be paid to the sites as investigator fees. The percentage of fees paid to investigative sites varies by contract depending upon the level of services provided to these sites. The term of the clinical research services agreement is typically two years and may be extended for additional terms of two years each. The agreements generally are terminable by either party at any time with 120 days prior written notice. The agreements may also be terminated immediately if the investigative site loses its license, fails to comply with Good Clinical Practices or maintain standards of quality and scientific integrity, or is debarred from clinical research participation by local, state or federal authorities.
Services to Sponsors
We assist the investigative sites in our network with planning and coordinating of independent clinical trials on drugs for pharmaceutical and biotechnology companies and CROs located throughout the world. Through our network of investigative sites, we provide sponsors with access to experienced investigators and study coordinators, we facilitate quick study start-up and we ensure efficient production of quality study data. We provide patient recruitment to sponsors through investigative sites in our network and investigative sites outside of our network. We provide services designed to enable sponsors of clinical trials to complete the clinical research process efficiently, cost effectively and in a high quality manner. We provide sponsors with access to experienced researchers with large patient databases, experienced study coordinators and a central management team that performs various services designed to ensure that sponsors needs are satisfied.
The investigative sites in our network perform the clinical trials, focusing on Phases II through IV of the drug development process. The clinical research portion of the drug development process involves selection of investigative sites to conduct the trials, the actual conduct of the trials and the gathering and completion of the data generated during the trials. We facilitate the clinical trial process by working with study sponsors to identify the appropriate investigative sites within our network to conduct the trials and by assisting the sites in conducting the
4
trials by offering various services, including patient recruitment, Good Clinical Practices training, source documentation, quality assurance and coordinator services.
Access to Experienced Investigators. We maintain an extensive database of information regarding the investigative sites in our network. The database includes information on the background, education and experience of the investigative sites, patient demographics by disease states and current studies under enrollment at the sites. When contacting potential or existing sponsors regarding new studies they wish to conduct, we provide them with specific information derived from our database that illustrates our expertise and available patient pool in the study area. After investigative sites are selected by the study sponsor and an institutional review board, or IRB, has approved the study and protocol and patients are enrolled, the investigative sites coordinate the study. In conducting studies, the investigative sites administer medical evaluations, healthcare procedures and study medications to patients in accordance with the protocol under the direction of a qualified principal investigator.
Access to Large Patient Populations. AmericasDoctor provides sponsors with immediate access to a large pool of patients for prospective studies. We provide this patient identification and recruitment to investigator sites involved in multi-center studies, including sites that are not part of the AmericasDoctors network. Through our central patient recruitment services, we develop and implement patient recruitment and retention programs to speed completion of these studies. These services include the development and implementation of advertising programs, public service announcements and a variety of tools to assist sites in finding and enrolling suitable patients into studies.
Centralized Management. Our central management team serves as the main contact point for sponsors and investigative sites, handling all aspects of arranging and monitoring the clinical research process and serving as the liaison between the sites and the sponsor. Management tracks the progress of clinical study contracts and handles all billing and collection matters. The central management team also performs quality assurance, administrative and planning tasks designed to enhance the quality and integrity of the research data produced by the investigative sites, such as assisting in the development of case report forms and designing source documentation. In addition, we conduct numerous training sessions for the investigative sites in our network that enhance the efficiency and utility of sites in our network.
Protocol Consultation. The investigative sites in our network and our management team have extensive experience in the design and conduct of clinical research programs. With these sites, we consult with sponsors regarding the design and improvement of the procedures and requirements of the clinical trial or protocol. By assisting sponsors in developing study protocols, we help to ensure that clinical trials will be conducted efficiently and timely.
Protocol Approval. FDA regulations require that an IRB review and approve each clinical trial prior to initiation and then monitor the conduct of each trial. An IRB is charged with protecting the rights and welfare of patients enrolled in clinical trials. Clinical trials have historically been significantly delayed because each investigative site involved in a study must submit information to a separate IRB. We are able to significantly reduce this inefficiency by consolidating all submissions through a single IRB per trial on behalf of all investigative sites participating in the study. Our coordination of the IRB approval process can generate substantial time and cost savings for our sponsors.
Accelerated Product Acceptance. Because the physicians at the investigative sites have experience with a particular new drug as a result of their clinical research, pharmaceutical companies have discovered that these private practice physicians can aid the marketing of their new products. When physicians have positive experiences with a new drug in the clinical trial process, they can be helpful in positioning the new drug upon market launch based upon their direct experience with the product.
Services to Investigative Sites
Our success is dependent upon our ability to attract and retain high quality investigative sites. We provide the following services to these independently owned sites:
Sales and Marketing. We market the clinical research capabilities of the investigative sites in our network to enable the investigative sites to devote a greater percentage of their time to their practices. By working closely
5
with study sponsors on an ongoing basis, we are able to increase study volume for the investigative sites. We employ full-time sales professionals who visit the pharmaceutical and biotechnology companies and CROs and market the capabilities of the investigative sites utilizing a variety of marketing methods. In addition, our employees attend trade shows and conventions to market our services and keep abreast of new opportunities.
Contract/Budget Negotiation. We employ full-time contract administrators who centrally manage the negotiation of all study contracts and budgets for the investigative sites in our network. These directors and administrators have significant experience in the pharmaceutical industry and clinical research.
Training and Education. We provide regular training courses in Good Clinical Practices, patient recruitment techniques and methods for clinical study execution for study coordinators and investigators. We conduct training sessions at our offices, the offices of individual sites and at regional and national meetings of the investigative sites in our network.
Administrative and Regulatory Services. We coordinate IRB filings centrally by obtaining and maintaining the necessary documentation and providing it to the study sponsors.
Source Documentation. Each clinical trial requires the gathering of patient information using source documentation. These source documents contain the information necessary to show that each patient meets the study protocol, support and verify the data contained in the case report forms and document each patients exposure to the study drug.
Funds Management. Our central financial staff reviews all study contracts and manages the receipt and disbursement of funds.
Patient Recruitment. We provide a series of patient recruitment tools to the investigative sites and obtain IRB approval on behalf of the sites for the patient recruitment materials.
Coordinator Services. We provide some of the investigative sites in our network with one or more on-site, experienced study coordinators responsible for managing the conduct of clinical research trials for the site. The study coordinators are trained to perform management and administrative tasks such as FDA reporting, patient enrollment and study oversight. The study coordinators actively participate in each study from the inception to the conclusion and work one-on-one with the physicians, their staff and the patients, performing a myriad of clinical research and administrative services, which include:
| | patient scheduling and screening; |
| | assistance in preparation of case report forms; |
| | monitoring drug accountability and assistance in study audits; and |
| | site training and development of research personnel. |
The provision of these services enables investigative sites that lack an experienced study coordinator or a sufficient number of study coordinators on staff to participate in clinical research trials. As of March 1, 2003, we employed approximately 80 experienced study coordinators, most of whom are RNs, LPNs, medical technicians or medical assistants with experience in the conduct and oversight of clinical research trials.
Patient Recruitment
The recruitment of patients for clinical studies has been a major obstacle to the timely completion of clinical trials for over forty years. The pharmaceutical industrys member organization, Pharmaceutical Research Manufacturers of America, estimates that over 85% of clinical studies fail to meet their patient recruitment timelines, costing the industry billions of dollars a year in lost revenue, shortened patent life, and increased research and development expense. The delays to recruiting patients are often caused by stringent protocol requirements and other restrictions. In addition, many patient recruitment business models do not effectively deal with delays because they only identify potential patients; they do not actually enroll patients into clinical study treatments. Since 1998, we have conducted patient recruitment for clinical studies being conducted by the investigative sites in our network
6
and for sites that are not in our network, but that are part of a multi-center trial. Our success in enrolling patients into studies has resulted in a substantial annual increase in patient recruitment projects contracted to us directly from sponsors. We intend to further focus our efforts to expand opportunities in patient recruitment.
Backlog
Our backlog consists of anticipated revenue from our existing contracts for work that has not yet been performed. Because our study contracts generally can be terminated by our sponsors at any time with little or no notice or penalty, we do not believe that backlog is a meaningful indicator of future results.
Competition
The clinical research industry is highly fragmented. We primarily compete with private practice research sites. The majority of these private practice research sites are single sites dispersed throughout the country. We also compete with hospitals, academic medical centers and site management organizations, or SMOs. No single competitor or group of competitors has a substantial presence in the clinical research industry. Some of our competitors have greater financial resources and name recognition, greater experience in specific diseases and conditions and larger non-exclusive medical specialist networks than we do. Research sites generally compete on the basis of previous experience, medical and scientific expertise in specific therapeutic areas, quality of clinical research, ability to manage clinical studies involving multiple sites, ability to provide administrative and regulatory services, ability to respond rapidly to requests for proposals, ability to rapidly recruit patients and geographic location. While we believe that we compete favorably in most of these areas, there can be no assurance that we will be able to respond to these pressures or changes.
With respect to patient recruitment, we compete with major global communications firms, niche patient recruitment firms, and a few CROs, some of which may be our sponsors. Although these companies primarily focus on Phase IV trials, to a growing extent, they also perform Phase II and Phase III trials.
Regulatory Matters
We are subject to substantial governmental regulation. The clinical investigation of new drugs is highly regulated by the FDA. The purpose of these regulations is to ensure that only those products that have been proven to be safe and effective are made available to the public. Sponsors are obligated to comply with FDA regulations governing such activities as:
| | IRB oversight; |
| | qualifications of investigators; |
| | obtaining patient informed consents; |
| | reporting patients adverse reactions to drugs; and |
| | maintaining thorough and accurate records. |
FDA regulations require the principal investigator to maintain adequate and accurate records of each patient in a clinical trial, including source documents such as medical records, eligibility screening logs, patient consent forms and drug dispensing records. Sponsors are required to maintain source documents for each study for specified periods and to make such documents available for review by the study sponsor and the FDA during audits.
Study sponsors monitor their research activities and compliance with study protocols by performing periodic audits at each investigative site. In addition, the FDA has the authority to investigate clinical research facilities and audit drug testing studies both during the course of the study and after completion. If repeated or deliberate failure to comply with regulations or submission of false information is discovered, the individual investigator may be disqualified by the FDA from participating in current or future clinical trials. The FDA may also disqualify data from previous trials conducted by the investigator.
7
Some other federal agencies, such as the Department of Health and Human Services, and some state and local governments may have additional regulations regarding the use of human subjects in clinical trials. In addition, regulatory initiatives, such as the Health Insurance Portability and Accountability Act, relating to the use and retention of patient medical information may have an impact on our storage and use of patient information in our databases. The information we currently use in connection with our operations is randomized, and accordingly, we do not expect these initiatives to have a significant impact on our operations. Depending on the scope of any new regulations restricting the use and retention of patient records, however, we may be obligated to incur additional costs to implement additional systems to comply with these laws. Although we do not expect these laws to have a material impact on our operations, there can be no assurance that this will be the case.
As part of our clinical research trial management responsibilities, our study coordinators engage from time to time in patient-screening activities that include physical contact with patients, such as taking blood. Accordingly, these study coordinators are subject to the requirements of the Occupational Heath and Safety Act and similar state regulations. The Occupational Health and Safety Act and similar state laws require that our study coordinators satisfy annual training and certification requirements, which may vary significantly from state to state. The failure of our study coordinators to satisfy these requirements may result in their disqualification from participating in clinical research studies or the imposition of fines and penalties upon us.
Several regulations have been passed that may restrict the ability of principal investigators to perform clinical research services for sponsors with whom they have certain defined financial relationships or require additional administrative disclosure and paperwork regarding the existence of these relationships. Compliance with the financial relationship disclosure regulations has had little economic effect on our business.
The delivery of healthcare services and products is heavily regulated under federal and state law. For example, federal and state agencies regulate the practice of medicine and establish licensing and reimbursement requirements. In addition, through fraud and abuse laws, federal and some state agencies prohibit payments for the referral of patients to a person participating in, or for the order, purchase or recommendation of items or services that are subject to reimbursement by, Medicare, Medicaid and other federal or state healthcare programs or third-party payors. While we have attempted to structure our business activities in a manner that will not constitute the practice of medicine or involve prohibited referrals, federal and/or state healthcare regulatory authorities may determine that, in a particular case or generally, we are engaged in the practice of medicine through the activities of our doctors or other healthcare professionals. We do not research the laws of each of the states in which we operate or obtain opinions or rulings from federal and state agencies with authority to enforce these laws. A finding that our business activities violate any of these laws or statutes may have a material adverse effect on our business, financial condition and results of operations.
Intellectual Property
We rely primarily on a combination of copyrights, trademarks, trade secret laws, our user policy and restrictions on disclosure to protect our intellectual property and our content, trademarks, trade names and trade secrets. We have filed several trademark applications and registrations for AmericasDoctor and other related trademarks. We license information and technology from third parties.
Employees
As of March 1, 2003, we had approximately 220 full-time employees. None of our employees is represented by a labor union. We believe that relations with our employees are good.
ITEM 2. PROPERTIES
We lease approximately 31,153 square feet of space in Gurnee, Illinois where our headquarters are located. Our lease expires in December 2009, and may be extended at our option, for two additional five-year terms. We also lease approximately 6,000 square feet in Tacoma, Washington for a coordinator site. Of this space, we have subleased an aggregate of 3,500 square feet to a third party. The lease expires in October 2004. We believe that our properties are generally suited for the purposes for which they are presently being used.
8
ITEM 3. LEGAL PROCEEDINGS
We are not aware of any material litigation against us. In the ordinary course of our business, from time to time, we are a party to routine litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for our Class A common stock. As of March 1, 2003, there were approximately 594 holders of record of our Class A common stock and one holder of record of our Class B common stock.
We have never paid a dividend on shares of our equity securities. We do not intend to pay any dividends on our Class A common stock during the foreseeable future. It is anticipated that earnings, if any, from operations will be used to finance growth. Any future dividends on our Class A common stock will depend upon our results of operations, financial condition, working capital requirements and other factors deemed relevant by our board of directors. In addition, our ability to declare and pay dividends on shares of our Class A common stock is restricted by the preferential rights of the holders of our Series A preferred stock to receive specified dividends.
On February 6, 2002, we issued options to purchase an aggregate of 12,000 shares of Class A common stock to Galen Advisors LLC and options to purchase an aggregate of 10,000 shares of Class A common stock to LHC Corporation. These options were issued in consideration for services rendered by our directors, Zubeen Shroff and Francis Ziegler, respectively, in 2001. The aggregate amount of consideration for these options was $44,000. This transaction was made in reliance upon an exemption from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder for transactions not involving a public offering. No underwriters were engaged in connection with the sales of securities, and these sales were made without general solicitation or advertising.
Equity Compensation Plan Information
The following table provides information as of December 31, 2002 with respect to compensation plans under which our Class A common stock is authorized for issuance under compensation plans previously approved and not previously approved by stockholders of AmericasDoctor.
| Plan category |
Number of securities to be issued upon exercise of options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||
| (a) |
|
(b) |
(c) | ||||
| Equity compensation plans approved by security holders |
1,191,659 |
$ |
10.93 |
1,796,736 | |||
| Equity compensation plans not approved by security holders |
|
|
|
| |||
| Total |
1,191,659 |
$ |
10.93 |
1,796,736 | |||
9
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected historical consolidated financial information of AmericasDoctor as of and for each of the five years ended December 31, 2002, 2001, 2000, 1999 and 1998. The financial information for 2000 reflects the combined results of operations of AmericasDoctor and Old AmDoc since January 6, 2000, the date of the Merger. Pro forma financial statements to reflect the acquisition of Old AmDoc have not been presented as the financial statements as of and for the year ended December 31, 2000 reflect the Merger for the entire period (the results of operations of Old AmDoc for the period from January 1 to January 5, 2000 were not significant). The financial information for 1999 reflects the combined results of operations of AmericasDoctor and AmericasDoctor.com Coordinator Services, Inc. (formerly known as Pacific Coast Clinical Coordinators, Inc.), one of our subsidiaries which we acquired in April 1998. AmericasDoctor.com Coordinator Services, Inc. is sometimes referred to as AmericasDoctor Coordinator Services. The financial information for 1998 reflects the combined results of operations of AmericasDoctor and AmericasDoctor Coordinator Services since April 22, 1998, the date of the acquisition. The selected consolidated financial data as of and for the year ended December 31, 2002 has been derived from our consolidated financial statements, which were audited by Grant Thornton LLP, our independent public accountants. The selected consolidated financial data as of and for each of the four years ended December 31, 2001 has been derived from our consolidated financial statements, which were audited by Arthur Andersen LLP. You should read the information in this table in conjunction with our consolidated financial statements and the notes to those statements and Managements Discussion and Analysis of Financial Condition and Results of Operations, included in Item 7 below.
| For the Year Ended December 31, |
||||||||||||||||||||
| 2002 |
2001 |
2000 |
1999 |
1998 |
||||||||||||||||
| (in thousands, except per share data) |
||||||||||||||||||||
| STATEMENT OF OPERATIONS DATA: |
||||||||||||||||||||
| Revenue |
$ |
49,381 |
|
$ |
48,510 |
|
$ |
54,291 |
|
$ |
54,840 |
|
$ |
42,219 |
| |||||
| Expenses |
||||||||||||||||||||
| Direct study costs |
|
31,298 |
|
|
31,280 |
|
|
35,071 |
|
|
37,156 |
|
|
29,996 |
| |||||
| Selling, general and administrative |
|
18,590 |
|
|
22,415 |
|
|
41,164 |
|
|
16,697 |
|
|
16,961 |
| |||||
| Class B common stock (depreciation) appreciation |
|
|
|
|
(1,919 |
) |
|
(1,028 |
) |
|
2,810 |
|
|
(240 |
) | |||||
| Depreciation and amortization |
|
1,006 |
|
|
1,560 |
|
|
12,990 |
|
|
1,251 |
|
|
1,018 |
| |||||
| Impairment of goodwill |
|
|
|
|
7,208 |
|
|
22,964 |
|
|
|
|
|
|
| |||||
| Total expenses |
|
50,894 |
|
|
60,544 |
|
|
111,161 |
|
|
57,914 |
|
|
47,735 |
| |||||
| Operating loss |
|
(1,513 |
) |
|
(12,034 |
) |
|
(56,870 |
) |
|
(3,074 |
) |
|
(5,516 |
) | |||||
| Other income (expense), net |
|
95 |
|
|
305 |
|
|
304 |
|
|
(580 |
) |
|
(48 |
) | |||||
| Net loss |
$ |
(1,418 |
) |
$ |
(11,729 |
) |
$ |
(56,566 |
) |
$ |
(3,654 |
) |
$ |
(5,564 |
) | |||||
| Basic and diluted net loss per common share |
||||||||||||||||||||
| Class A |
$ |
(1.68 |
) |
$ |
(4.11 |
) |
$ |
(15.62 |
) |
$ |
(2.21 |
) |
$ |
(3.24 |
) | |||||
| Class B |
|
(1.68 |
) |
|
(4.11 |
) |
|
(15.62 |
) |
|
(2.21 |
) |
|
(3.24 |
) | |||||
10
| As of December 31, |
||||||||||||||||||||
| 2002 |
2001 |
2000 |
1999 |
1998 | ||||||||||||||||