Biocardia, Inc. annual report, Q2 FY2008

Business Context and Reporting Period

Company: clickNsettle.com, Inc. (Ticker: CKST), a Delaware corporation. Note: The input metadata references "Biocardia, Inc.", but the filing text identifies the registrant as clickNsettle.com, Inc.

Reporting Period: Fiscal year ended June 30, 2008.

Business Status: At the time of filing, the Company was a shell company with no operating business or employees. It had ceased its historical Alternative Dispute Resolution (ADR) operations in January 2005. The Company was actively seeking a merger or acquisition.

Subsequent Event: On August 29, 2008 (post-fiscal year), the Company completed a reverse acquisition of Cardo Medical, LLC, an early-stage orthopedic medical device company. The Company intends to change its name to "Cardo Medical, Inc." and account for the transaction as a reverse acquisition.

Key Financial Metrics

Metric Fiscal Year 2008 Fiscal Year 2007
Revenue $0 $0
Net Loss $(261,107) $(75,444)
Operating Expenses $306,527 $79,802
Cash and Cash Equivalents (End of Period) $2,651,572 $82,097
Total Assets $2,661,139 $87,110
Total Liabilities $14,676 $25,829
Stockholders' Equity $2,646,463 $61,281
Weighted Average Shares Outstanding 6,065,160 992,921

Liquidity: The Company held significant cash reserves ($2.65 million) at year-end, primarily generated from private stock offerings in September 2007 and March 2008. There were no contractual obligations or off-balance sheet arrangements.

Material Changes vs. Prior Period

  • Capital Structure: The Company raised approximately $2.9 million in net proceeds from the sale of common stock during the fiscal year, significantly increasing cash balances from $82,097 to $2,651,572.
  • Expenses: Operating expenses increased by approximately 284% (from $79,802 to $306,527). This increase was driven by professional fees related to stock sales, changes in control, and the costs associated with the merger with Cardo Medical.
  • Net Loss: Net loss increased from $75,444 to $261,107 due to higher operating expenses, partially offset by increased interest income ($45,420 vs. $4,358) resulting from higher cash balances.
  • Share Count: Shares issued and outstanding increased from approximately 1 million to 11.3 million due to private placements and a reverse stock split.

Outlook, Risks, and Management Commentary

  • Reverse Acquisition: The primary strategic development is the August 29, 2008 merger with Cardo Medical, LLC. Cardo focuses on reconstructive joint devices and spinal surgical devices. The transaction resulted in a change of control, with former Cardo members controlling the combined entity.
  • Going Concern: The 2007 audit report expressed substantial doubt about the Company's ability to continue as a going concern due to the lack of operations. The 2008 audit did not include a going concern qualification, likely due to the cash infusion and the subsequent merger.
  • Risks:
    • Shell Company Status: Prior to the merger, the Company had no revenue and relied on cash reserves.
    • Stock Price Volatility: The stock traded on the OTC Bulletin Board with significant price fluctuations (High: $2.30, Low: $0.07 during the year).
    • Future Financing: The Company may need to issue additional equity to finance future growth, which could dilute existing shareholders.
  • Accounting Changes: The Company changed its fiscal year-end to December 31, 2008, effective August 29, 2008.

Investor Verification Checklist

  • Merger Details: Verify the terms of the August 29, 2008 merger with Cardo Medical, LLC, including the exchange ratio and the resulting ownership structure (Cardo members hold ~93.3% of the combined company).
  • Financial Recapitalization: Confirm how the historical financial statements of Cardo Medical will be presented in future filings following the reverse acquisition accounting treatment.
  • Regulatory Approvals: Verify the status of FDA Section 510(k) approvals for Cardo's medical devices (knee, hip, and spine systems) mentioned in the business description.
  • Stock Ownership: Review the concentration of ownership, noting that Frost Gamma Investments Trust held 40.9% of the outstanding shares as of June 30, 2008.
  • Going Concern Status: Assess the Company's ability to fund Cardo's R&D and commercialization efforts using the existing cash balance of $2.65 million.