As filed with the Securities and Exchange Commission on May 16, 2001.
Registration No. 333-56310
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
Registration Statement
Under
THE SECURITIES ACT OF 1933
Medcom USA, Incorporated
--------------------------------
(Exact name of registrant as specified in charter)
Delaware
--------------------
(State or other jurisdiction of incorporation)
18001 Cowan, Suite C & D
Irvine, CA 92614
65-0287558 (949) 261-6665
-------------- --------------------------------------
(IRS Employer I.D. (Address, including zip code, and telephone
Number) number of principal executive offices)
Mark Bennett
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
------------------------------------
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date
of this Registration Statement
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
------------------------------------------------------------------------------
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Unit (1) Price Fee (4)
---------- ---------- ---------- ---------- ------------
Common Stock (2) 3,876,302 $1.01 $3,915,065 $1,034
Common Stock (3) 4,021,874 $1.01 $4,062,093 $1,073
--------- ------
Total 7,898,176 $2,107
(1) Offering price computed in accordance with Rule 457(c).
(2) Shares of common stock owned by existing shareholders
(3) Shares of common stock issuable upon the exercise of warrants. These shares
of common stock may be resold by means of this registration statement.
Includes additional shares which may be issued due to adjustments to
warrants.
(4) A fee of $998 was paid when this Registration Statement was originally filed
and an additional $3,200 was paid on April 27, 2001.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the conversion of the Preferred Stock or upon the exercise of the warrants
as a result of any adjustment in the number of securities issuable by reason of
the anti-dilution provisions of the Preferred Stock or the warrants.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
SELLING SHAREHOLDER OFFERING PROSPECTUS
MEDCOM USA, INCORPORATED.
7,898,176 Shares of Common Stock
This prospectus relates to the sale of common stock by certain persons who
either own or have the right to acquire shares of Medcom's common stock. These
persons are sometimes referred to in this prospectus as the selling
shareholders. See the section of this prospectus entitled "Selling Shareholders"
for more information concerning the selling shareholders. Medcom will not
receive any proceeds from the sale of the shares by the selling shareholders.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities offered by this
prospectus or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The securities offered by this prospectus are speculative and involve a
high degree of risk. For a description of certain important factors that should
be considered by prospective investors, see "Risk Factors" beginning on page
seven of this prospectus.
On May 15, 2001 the closing price of Medcom's common stock on the NASDAQ
SmallCap Market was $0.99 per share. Medcom's NASDAQ symbol is EMED.
The date of this prospectus is May 16, 2001
PROSPECTUS SUMMARY
Medcom USA, Incorporated was incorporated in August 1991 under the name
Sims Communications, Inc. The corporate name was changed to Medcom USA,
Incorporated in October 1999.
Medcom's executive offices are located at 18001 Cowan, Suite C & D, Irvine
California 92614. Medcom's telephone number is (949) 261-6665.
As of March 31, 2001 Medcom had the following business segments:
o Medcard System - Medical Transaction Processing
o DCB Actuaries and Consultants - Healthcare Management Software Development
o Movie Division - Intelligent Vending Machines
The Company effected a one for five reverse stock split on May 9, 2001.
All common share and warrant amounts included in this prospectus have been
adjusted to reflect this change.
MedCard System
In November 1998 Medcom acquired an exclusive world wide license to
software programs and related technology known as the MedCard system. The
MedCard system is an electronic processing system which consolidates insurance
eligibility verification and processes medical claims and approvals of credit
card and debit card payments in under 30 seconds through a small terminal or a
personal computer. Using the MedCard system, health care providers are relieved
from the problems associated with eligibility confirmation and billings,
healthcare providers' reimbursements are accelerated and account receivables are
reduced. The average time it takes the healthcare providers to collect payments
from insurance carriers and plans decreases from three months to three weeks.
Medcom obtains revenues from the sale of its processing terminals and from fees
received from every transaction processed by the terminals.
The MedCard System also allows a patient's primary care physician to
request approval from the patient's insurance carrier or managed care plan for a
referral to a secondary physician or specialist. The secondary physician or
specialist can use the MedCard system to verify the referral has been approved
by the patient's insurance carrier, thereby eliminating numerous telephone calls
that are normally required with referrals. The MedCard system's referral
capabilities reduce paperwork and administrative costs, increase productivity
and provide greater patient information for the specialist, as well as a written
record of the referral authorization.
The MedCard System can record and track encounters between patients and
health care providers for performance evaluation and maintenance of records.
After examining a patient a physician is able to enter the patient's name,
procedure code and diagnostic code at a nearby terminal. This information can
then be downloaded to MedCom's computer network, processed and transmitted back
to the provider in a variety of both summary and detail reports.
As of December 31, 2000 the MedCard system was able to retrieve on-line
eligibility and authorization information from 125 medical insurance companies
and plans and electronically process and submit billings for its healthcare
providers to over 1650 companies. These insurance providers include CIGNA,
Prudential, Oxford Health Plan, United Health Plans, Blue Cross, Medicaid,
Aetna, Blue Cross/Blue Shield and Metrahealth.
The license was acquired from Dream Technologies, LLC and MedCard
Management Systems, Inc. in consideration for $450,000 in cash, 20,000 shares of
Medcom's common stock and an option, which was subsequently exercised, to
purchase an additional 70,000 shares of common stock at a price of $6.70 at any
time prior to November 10, 2001.
Medcom also agreed to pay Dream a royalty, not to exceed $250,000 per
month, equal to 25% of the net revenues derived by Medcom from the MedCard
system. Once royalties in any month reach $250,000, Medcom is obligated to pay
Dream 10% of the net revenues derived from the MedCard system during that
particular month. The term net revenues means the gross revenues received from
the use of the MedCard Systems less:
o Cost of terminal,
o Commissions payable to agents which place terminals with end users; and
o Network costs which include (i) claim fees payable to data vendors, (ii)
charges for verification of insurance coverage and (iii) similar
telecommunications charges related to obtaining claims processing and/or
benefits verification information.
In May 2000 the license agreement with Dream was amended such that Medcom
acquired all rights to the MedCard system including all software programs,
intellectual property, trade names and existing contracts. The amendment
effectively terminated the original License Agreement, except that the royalty
provisions of the original license agreement will remain in effect until
November 2013. In consideration for this amendment, Dream received 20,000 shares
of the Medcom's restricted common stock and a warrant to purchase 80,000 shares
of the Medcom's common stock at $17.85 per share at any time prior to May 11,
2003.
DCB Actuaries & Consultants
In April 2000, Medcom acquired 100% of the stock of DCB Actuaries &
Consultants s.r.o. (DCB), a Czech Republic based company and certain technology
and intellectual property from DSM, LLC, a Florida limited liability company.
DCB develops and markets software programs which are used in providing
information to health care providers, hospitals, insurance companies and
insurance plans. DCB is headquartered in Brno, Czech Republic.
DCB's software systems have the following features:
o Risk Management - Actuarial analysis and projected monthly costs on a per
member basis. These features are useful for insurance companies, managed
care plans and hospitals.
o Clinical Services - Electronic patient record system, patient care pathways
and on-line medical documents. The care pathways provide a computer
generated standard treatment program based upon the patient's particular
background and symptoms, which can be compared to the actual treatment
program being used. On-line documents include x-rays, diagnostic results,
lab reports, EKGs and physician notes. This component allows a healthcare
provider to review these documents on-line, from the home or office. More
than one physician in multiple locations can review the records
simultaneously, thereby improving the consultation process.
o Administrative and Management Functions - Quality assurance, claims
analysis, plan performance and market/sales analysis. The system enables
healthcare providers or managers to review their performance against
international standards and budgets or the results of other similarly sized
or located organizations. The reports can be tailored to meet the
information needs of any user.
o Patient Services - Patients will also benefit from DCB's Health Information
Gateway which will allow patients to monitor personal health profiles in
addition to their own medical treatment histories. Early warning and
reminder alerts will also be available on line.
Medcom acquired DCB and the technology from DSM for $1,900,000 in cash and
2,850 shares of Medcom's Series D Preferred Stock. In connection with these
acquisitions, Medcom incurred costs of approximately $140,000 and paid
commissions of $100,000 in cash and 7,426 shares of its common stock which
shares were valued at $150,000. Medcom also paid $250,000 to the existing
employees of DCB.
Movie Vision
In January 1998 Medcom acquired a business known as Movie Vision from
Moviebar USA, Incorporated and Vectorvision, Incorporated. Movie Vision rents
video cassettes, primarily containing motion pictures, through automated
dispensing units in hotels. Movie Vision currently has video cassette dispensing
machines in approximately 110 hotels and time share facilities in the United
States. As of March 31, 2001 MedCom was not actively marketing Movie Vision to
the hotel industry.
The Offering
This prospectus relates to the sale of shares of Medcom's common stock:
o held by certain persons who either purchased the shares from Medcom in
private offerings, received the shares for services provided to Medcom, or
received the shares in settlement of amounts owed to these persons by
Medcom.
o issuable upon the exercise of warrants and options which were previously
issued by Medcom, and
The owners of the shares of common stock described above and the holders
of the warrants and options, to the extent they exercise the warrants or
options, are referred to in this prospectus as the selling shareholders. If all
warrants and options held by the selling shareholders are exercised, Medcom will
receive approximately $28,000,000, which will be used to fund Medcom's
operations. However, almost all of the options held by the selling shareholders
are at exercise prices in excess of the current market price. Medcom will not
receive any proceeds from the sale of the shares by the selling shareholders.
As of May 14, 2001 Medcom had 10,636,308 outstanding shares of common
stock. Assuming all warrants and options held by the selling shareholders are
exercised, there will be 14,660,182 shares of common stock issued and
outstanding. The number of outstanding shares before and after this offering
does not give effect to shares which may be issued upon the exercise and/or
conversion of other options, warrants or convertible securities previously
issued by Medcom. See "Comparative Share Data".
Statement of Operations Data:
----------------------------
Year Ended Nine months ended
June 30, 2000 March 31, 2001
---------------- --------------
Revenues:
Sales $848,434 $253,189
Rental 680,331 513,826
Service 1,158,137 246,410
Software Development 566,587 726,069
---------- -----------
Total Revenues 3,253,489 1,739,494
Cost of Sales and Services 1,559,548 1,377,449
Operating and Other Expenses 9,126,016 7,694,185
Loss from Discontinued
Operations (879,128) --
------------- ----------------
Net Loss applicable to common
shareholders $(8,311,203) $(7,332,140)
============ ============
Balance Sheet Data:
------------------ June 30, 2000 March 31, 2001
Current Assets $4,170,290 $2,411,434
Total Assets 15,149,273 13,738,558
Current Liabilities 1,775,029 3,007,180
Total Liabilities 3,999,077 5,555,269
Working Capital 2,395,261 (595,746)
Shareholders' Equity 11,150,196 8,183,289
No common stock dividends have been declared by Medcom since its inception.
RISK FACTORS
Prospective investors should be aware that ownership of Medcom's common
stock involves risks which could adversely affect the value of their holdings of
common stock. Medcom does not make, nor has it authorized any other person to
make, any representations about the future market value of Medcom's common
stock.
The securities offered should be purchased only by persons who can afford
to lose their entire investment. Prospective investors should read this entire
prospectus and carefully consider, among others, the following risk factors in
addition to the other information in this prospectus prior to making an
investment.
There can be no assurance that Medcom will be able to generate sufficient
revenues and become profitable.
Medcom has incurred losses since it was formed in 1991. From the date of
its formation through March 31, 2001, Medcom incurred net losses of
approximately $(44,000,000). During the nine months ended March 31, 2001 Medcom
had a loss of (7,332,140). Medcom expects to continue to incur losses until such
time, if ever, as it earns net income.
Medcom needs additional capital to continue in business.
This offering is being made on behalf of certain selling shareholders.
Medcom will not receive any proceeds from the sale of the shares offered by the
selling shareholders. Medcom projects that it will need approximately
$10,000,000 in additional funding before Medcom's revenues equals its expenses,
although there is no assurance that Medcom's projections in this regard will be
accurate. There can be no assurance that Medcom will be able to obtain
additional funding, if needed, or if available on terms satisfactory to Medcom,
in which case Medcom may be unable to continue in business. As of the date of
this prospectus Medcom had failed to make the payments required on several of
its equipment leases and Medcom was not able to pay all of its liabilities as
they became due.
Medcom's need for capital may result in the issuance of additional shares of
common stock which may result in substantial dilution to Medcom's shareholders.
This offering is being made on behalf of certain selling shareholders.
Medcom will not receive any proceeds from the sale of the shares offered by the
selling shareholders. Due to Medcom's history of losses, it is likely that
Medcom's continued operations will depend upon funds received from the sale of
Medcom's common or preferred stock. The issuance of these shares and their sale,
or potential for resale, in the public market may cause the price of Medcom's
common stock to decline. There can be no assurance that Medcom will be able to
obtain additional funding, if needed, or if available on terms satisfactory to
Medcom. Between June 30, 1999 and the date of this prospectus Medcom's
outstanding shares increased from 3,345,500 shares to 10,636,308 shares of
common stock.
Options, warrants and convertible securities issued by Medcom may result in
substantial dilution to Medcom's shareholders.
As of May 14, 2001 Medcom had 10,636,308 outstanding shares of common
stock. Medcom has issued options, warrants and other convertible securities,
which allow the selling shareholders and other persons to acquire approximately
6,630,964 additional shares of Medcom's common stock. By means of this
prospectus and an earlier prospectus Medcom has registered for public sale
approximately 4,314,484 shares of common stock underlying these derivative
securities. The sale of these shares over a short period of time may cause the
price of Medcom's common stock to decline. See "Comparative Share Data" for more
information concerning the derivative securities issued by Medcom.
Shares of common stock available for public sale may cause the price of Medcom's
stock to decrease.
Medcom has filed a previous registration statement with the Securities and
Exchange Commission which permits the sale into the public market of
approximately 2,528,800 shares of common stock held by existing shareholders of
Medcom, as well as approximately 292,600 shares of common stock issuable upon
the exercise or conversion of options, warrants and other convertible securities
issued by Medcom. The sale of these shares, as well as the shares offered by
this prospectus, over a short period of time may cause the price of Medcom's
common stock to decline.
Regulatory compliance of healthcare will impact MedCom's business operations
The Health Insurance Portability and Accountability Act (HIPAA) was passed
in 1996 with a primary purpose to protect workers from losing their insurance if
they changed jobs. The law also called for rules that would standardize
administrative and financial transaction in the healthcare industry. The Federal
Government published the first set of rules pertaining to uniform electronic
data standards in August 2000, and the second set of rules pertaining to patient
privacy and security were issued in December 2000. Rules on patient privacy and
security are expected later this year. The published rules become effective two
months after publication and compliance is required within two years.
Compliance with HIPAA will be a major issue within the healthcare
industry. The Company has been studying how HIPAA will impact both its MedCard
and the Health Information Gateway operations. There can be no assurance that
the Company will be able to operate in compliance with the HIPAA regulations in
a profitable manner.
The loss of any of Medcom's executive officers may be detrimental to Medcom
Medcom's operations are dependent upon its ability to hire and retain
qualified management personnel and the continued services of its executive
officers. The loss of the services of any of Medcom's executive officers,
whether as a result of death, disability or otherwise, may have a material
adverse effect upon Medcom's business.
Medcom's operations in foreign countries involves numerous risks.
As a result of Medcom's acquisition of DCB Actuaries & Consultants Medcom,
through DCB, now operates in foreign locations. As a result, Medcom is subject
to certain business risks which arise from operating in foreign countries,
including exposure to periodically volatile foreign economic, monetary and
currency conditions, compliance with foreign law and regulations as well as
issues relating to the conduct of day-to-day business in foreign language and
foreign culture business environments. Additional international considerations
include high travel costs as well as time and distance barriers in the
management and development of the business. There can be no assurance that
Medcom will be able to operate successfully in foreign countries.
Prices for Medcom's Common Stock have been highly volatile and will be
influenced by a number of factors, including the depth and liquidity of the
market for Medcom's Common Stock, Medcom's financial results, investor
perceptions of Medcom, and general economic and other conditions.
There is No Assurance that Medcom's Common Stock Will Continue to be Listed on
NASDAQ.
Although Medcom's Common Stock is currently listed on the NASDAQ Small-Cap
Market, the National Association of Securities Dealers, Inc. requires, for
continued inclusion on the NASDAQ Small-Cap Market, that Medcom must maintain
$2,000,000 in tangible net worth and that the bid price of Medcom's Common Stock
must be at least $1.00.
If Medcom's securities were delisted from the NASDAQ Small-Cap Market,
Medcom's securities would trade in the unorganized interdealer over-the-counter
market through the OTC Bulletin Board which provides significantly less
liquidity than the NASDAQ Small-Cap Market. Securities which are not traded on
the NASDAQ Small-Cap Market may be more difficult to sell and may be subject to
more price volatility than NASDAQ listed securities. There can be no assurance
that Medcom's securities will remain listed on the NASDAQ Small-Cap Market.
If Medcom's Common Stock was delisted from NASDAQ, trades in such
securities may then be subject to Rule 15g-9 under the Securities Exchange Act
of 1934, which rule imposes certain requirements on broker/dealers who sell
securities subject to the rule to persons other than established customers and
accredited investors. For transactions covered by the rule, brokers/dealers must
make a special suitability determination for purchasers of the securities and
receive the purchaser's written agreement to the transaction prior to sale. Rule
15g-9, if applicable to sales of Medcom's securities, may affect the ability of
broker/dealers to sell Medcom's securities and may also affect the ability of
investors in this offering to sell such securities in the secondary market and
otherwise affect the trading market in Medcom's securities.
The Securities and Exchange Commission has rules that regulate
broker/dealer practices in connection with transactions in "penny stocks". Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in that security is provided by the exchange or system).
The penny stock rules require a broker/dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the Commission that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker/dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker/dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
stock that becomes subject to the penny stock rules.
On April 22, 2001 Medcom was notified by the NASD that its common stock
was subject to delisting from the NASDAQ SmallCap Market since the price of
Medcom's common stock has been below $1.00 since December 2000. Medcom has
appealed the NASD's decision and a hearing on the appeal is scheduled for May
25, 2001. On May 9, 2001 Medcom effected a one for five reverse spilt of its
common stock. Depending upon the price of Medcom's common stock, the reverse
stock split may not increase Medcom's common stock to a price above $1.00 per
share.
Medcom's recent changes in its business may not result in profits.
During the summer of 1999 Medcom began directing its efforts towards its
medical divisions. The medical divisions, which include the MedCard and DCB
divisions, are in the early stage of development and have a limited operating
history. The success of the MedCard division will be dependent on convincing
healthcare providers to use the Medcard system for insurance verification and
billing. There is no assurance that the MedCard division will gain acceptance
from healthcare providers or the general public or that the JustMed.com division
will generate any profits.
In April 2000 Medcom acquired DCB Actuaries & Consultants. The success of
Medcom's DCB division will depend upon Medcom's ability to sell or license DCB's
software systems to hospitals and insurance companies and plans. There can be no
assurance that Medcom's DCB division will be profitable.
There can be no assurance that Medcom will be able to compete with the numerous
other companies which are engaged in Medcom's lines of business.
There are many companies that will compete with Medcom at some level.
Competing health insurance processing systems include Envoy, NDC Health,
Imperial Bank, Medical Manager, Medic, Spot Check and Mediphis. Medcom
anticipates that its DCB division will compete with MedStat, Cerner,
Healtheon/Web MD and McKesson/HBOC. Many of these competitors are far better
capitalized than Medcom and control significant market share in their respective
industry segments.
Medcom may be unable to protect its technology.
None of the technology used by Medcom is covered by U.S. patents. There is
no assurance that any patents that may be issued or licensed to Medcom will
protect Medcom's technology as disputes may arise between Medcom and others as
to the scope and validity of these or other patents. Any defense of the patents
could prove costly and time consuming and there can be no assurance that Medcom
will be in a position, or will deem it advisable, to carry on such a defense.
With respect to Medcom's unpatented proprietary technology, there is no
assurance that others may not acquire or independently develop the same or
similar technology.
DOCUMENTS INCORPORATED BY REFERENCE
Medcom will provide, without charge, to each person to whom a copy of this
prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into this prospectus). Requests
should be directed to:
Medcom USA, Incorporated
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
(949) 261-0323 (fax)
The following documents filed with the Securities and Exchange Commission
by Medcom (Commission File No. 0-25474) are hereby incorporated by reference
into this Prospectus:
(1) Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000.
(2) Proxy Statement relating to December 19, 2000 Annual Meeting of
Shareholders.
(3) Quarterly reports on Form 10-QSB for the quarters ended September 30,
2000, December 31, 2000 and March 31, 2001.
(4) Description of Medcom's common stock as contained in a registration
statement on Form 8-A and filed under the Securities Exchange Act of
1934.
All documents filed with the Securities and Exchange Commission by Medcom
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 subsequent to the date of this prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference into this
prospectus and to be a part of this prospectus from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or superseded for
the purposes of this prospectus to the extent that a statement contained in this
prospectus or in any subsequently filed document which also is or is deemed to
be incorporated by reference modifies or supersedes such statement. Such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
ADDITIONAL INFORMATION
Medcom has filed with the Securities and Exchange Commission, 450 5th
Street, N.W., Washington, D.C. 20001, a Registration Statement under the
Securities Act of l933, as amended, with respect to the securities offered by
this prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement. For further information with respect to
Medcom and such securities, reference is made to the Registration Statement and
to the exhibits filed with the registration statement. Statements contained in
this Prospectus as to the contents of any contract or other documents are
summaries, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by the actual terms of the document.
Medcom is subject to the requirements of the Securities Exchange Act of l934 and
is required to file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of the exhibits to the registration
statement, as well as copies of any reports, proxy statements and other
information filed by Medcom, can be inspected and copied at the public reference
facility maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. and at the Commission's Regional offices in New York (7 World
Trade Center, Suite 1300, New York, New York 10048) and Chicago (Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511). Copies of such material can be obtained from the Public Reference
Section of the Commission at its office in Washington, D.C. 20549 at prescribed
rates. Certain information concerning Medcom is also available at the Internet
Web Site maintained by the Securities and Exchange Commission at www.sec.gov.
COMPARATIVE SHARE DATA
As of May 14, 2001, Medcom had 10,636,308 shares of common stock issued
and outstanding. Assuming all warrants and options held by the selling
shareholders are exercised, there will be 14,660,182 shares of common stock
issued and outstanding. The following table describes the origin of the shares
offered by this prospectus.
Number of Shares Note Reference
Shares outstanding as of May 14, 2001 10,638,308
Shares offered by selling shareholders 3,876,302
Shares issuable upon the exercise of
options and warrants held by selling
shareholders 4,021,874
Shares which will be outstanding, assuming
exercise of all options and warrants held by
selling shareholders 14,660,182
Percentage of Medcom's common stock represented by shares offered by this
prospectus, assuming the exercise of all options and warrants held by selling
shareholders 53.9%
Other Shares Which May Be Issued:
--------------------------------
The following table lists additional shares of Medcom's common stock which
are not offered by this prospectus but may be issued as the result of the
exercise of outstanding options, warrants or the conversion of other securities
issued by Medcom:
Number Note
of Shares Reference
Shares issuable upon exercise of warrants 18,667 A
held by former Series C Preferred shareholders.
Shares which may be acquired by sales agent. 8,100 A
Shares issuable upon the exercise of warrants 681,212 B
sold to private investors and upon exercise
of warrants issued to sales agents and consultants
Shares issuable upon exercise of options 1,783,625 C
previously granted by Medcom
Additional shares issuable in connection
with the acquisition of:
One Medical Services, Inc. 37,500 D
One Medical Services, Inc. 297,000 D
MedCard System 80,000 D
Shares issuable upon conversion of Series D
Preferred Stock 115,400 E
A. Between November 1998 and January 1999, Medcom sold 1,700 shares of its
series C preferred stock (the "Preferred Stock") to a group of institutional
investors for $1,700,000. In connection with this offering, Medcom issued to
Settondown Capital International, Ltd., the sales agent for the offering, 45
shares of series C preferred stock. The Series C preferred shares were
subsequently converted into 698,000 shares of Medcom's common stock.
In connection with the issuance of the Series C Preferred Stock Medcom
also:
(i) Issued to the holders of the Series C Preferred Stock, on a pro rata
basis, warrants which collectively allow for the purchase of up to
22,667 shares of Medcom's common stock. The warrants are exercisable
at a price of $5.00 per share at any time prior to July 31, 2004.
Warrants for the purchase of 4,000 shares were exercised in
September 2000.
(ii) Issued to Settondown Capital International, Ltd., warrants for the
purchase of 7,500 shares of Medcom's common stock and 2,954 shares
of common stock. The warrants for the purchase of the 7,500 shares
of common stock are exercisable at a price ranging between $6.35 and
$7.50 per share at any time prior to December 31, 2003. Settondown,
as the holder of 45 shares of the Series C preferred stock, also
received 600 warrants which have the same terms as the warrants
referred to in (i) above.
B. In connection with certain private offerings, Medcom sold shares of common
stock and warrants. The warrants sold in these private offerings are exercisable
at prices ranging between $2.95 and $50.00 per share and expire between June
2001 and October 2005. Medcom has also entered into a number of agreements with
various financial and other consultants. Pursuant to the terms of these
agreements, Medcom has issued to the consultants shares of common stock, plus
warrants to purchase additional shares of common stock. The warrants referred to
above are exercisable at prices ranging between $1.45 and $42.80 per share and
expire between July 2001 and December 2005. The number of shares issuable upon
the exercise of warrants referred to in this paragraph does not include
3,387,620 shares issuable upon the exercise of warrants held by the selling
shareholders and which are to be offered for sale by means of this prospectus.
C. Options are held by present and former officers, directors and employees
of Medcom. The options may be exercised at prices ranging between $2.80 and
$25.00 per share. Approximately 79% of these options are currently exercisable.
D. Effective May 30, 1998 Medcom acquired One Medical Services, Inc. in
consideration for 28,470 shares of common stock and 37,500 warrants exercisable
at $10.00 per share at any time prior to May 30, 2003. Medcom has also agreed to
issue to the former owners of One Medical up to 297,000 additional shares of
common stock depending on the future operating of One Medical. The number of
shares to be issued each quarter will be determined by dividing the quarterly
net income of One Medical (for each fiscal quarterly beginning June 30, 1998 and
ending June 30, 2001), by the average closing price of Medcom's common stock for
the five day trading period prior to the end of each quarter. As of May 14, 2001
Medcom had not issued any additional shares to the former owners of One Medical
and Medcom believes that it is unlikely that any such shares will be issued.
In November 1998 Medcom acquired an exclusive world wide license to
software programs and related technology know as the MedCard system. The license
was acquired from Dream Technologies, LLC and MedCard Management Systems, Inc.
in consideration for cash, shares of Medcom's common stock and an option, which
was subsequently exercised, to purchase an additional 70,000 shares of common
stock at a price of $6.70 at any time prior to November 10, 2001. In May 2000
the license agreement was amended such that Medcom acquired all rights to the
MedCard system including all software programs, intellectual property, trade
names and existing contracts. In consideration for this amendment, Dream
received 20,000 shares of the Medcom's restricted common stock and a warrant to
purchase 80,000 shares of the Medcom's common stock at $17.85 per share at any
time prior to May 11, 2003.
E. In April 2000, Medcom issued 2,850 shares of its Series D Preferred Stock in
connection with the acquisition of DCB Actuaries & Consultants and related
technology. Each Series D Preferred share is convertible at any time at the
option of the holder into 40.49 shares of Medcom's common stock. The Series D
Preferred shares will, at Medcom's option, convert into shares of Medcom's
common stock, in the manner described above, at any time after April 15 2001 so
long as the bid price of Medcom's common stock exceeds $24.70 and the shares of
common stock issuable upon the conversion of the Series D Preferred shares are
either covered by an effective registration statement or are eligible for sale
pursuant to Rule 144 of the Securities and Exchange Commission.
The shares which are referred to in Notes A, B and D (limited to 292,610
shares in the case of Note B, 6,050 shares in the case of Note C and 37,500
shares in the case of Note D), as well as 2,528,780 shares owned by certain
Medcom shareholders, have been registered for public sale by means of a
registration statement on Form S-3 which has been filed with the Securities and
Exchange Commission.
A total of 849,075 shares issuable upon the exercise of options, and which
are referred to in Note C, have been, or will be registered for public sale by
means of a registration statements on Form S-8 filed with the Securities and
Exchange Commission
SELLING SHAREHOLDERS
The Offering
This prospectus relates to the sale of shares of Medcom's common stock:
o held by certain persons who either purchased the shares from Medcom in
private offerings, received the shares for services provided to Medcom, or
received the shares in settlement of amounts owed to these persons by
Medcom.
o issuable upon the exercise of warrants and options which were previously
issued by Medcom.
The owners of the common stock described above and the holders of the
warrants and options, to the extent they exercise the warrants or options, are
referred to in this prospectus as the selling shareholders.
Medcom has agreed with the selling shareholders to file a registration
statement, of which this prospectus is a part, to register for public sale the
shares of common stock held by the selling shareholders or the shares issuable
upon the exercise of the options or warrants held by these selling shareholders.
Medcom also agreed to keep the registration statement current until one year
after the date of this prospectus. Medcom has agreed to pay the expenses
associated with registering the shares to be sold by the selling shareholders
which are estimated to be $25,000.
The names of the selling shareholders are:
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
About Face Communications 6,000 6,000
Alsada SA, Inc. 530,000 530,000
American Nortel Communications 456,498 166,000 622,498
Archibald, Michael 2,775 925 3,700
Asian Restaurants 219,834 165,000 384,834
Augustine Fund, LP 90,160 90,160
Bamsey, Randy 1,500 300 1,800
Barak, Karel 1,170 1,170
Benda, Mark 1,000 200 1,200
Benda, Russell 660 660
Benda, Russell & Martha 1,500 300 1,800
Bluefin Partners, Inc. 99,999 99,999
Boesel, John 1,000 200 1,200
Boselli Marketing 1,250 250 1,500
Brawner, Harnold Richard 215,187 173,213 388,400
Brown, Bennett 5,834 1,945 7,779
Brunell Enterprises 1,250 250 1,500
Chelverton Fund Ltd. 5,000 24,100 29,100
Chavtal, Martin 1,170 1,170
Colby, Clark 1,750 350 2,100
Colby, Melinda 1,750 350 2,100
Colby, Thomas 1,750 2,660 4,410
Collins, Andrew P. 22,223 7,408 29,631
Colvin, Horace R. 4,167 1,389 5,556
Copper, Jeff 18,565 18,565
Dapeer, Rosenblit & Litvak, LLP 58,092 58,092
Denner, Keith 20,000 45,797 65,797
Dennis, W. Sam. 24,948 24,948
Donovan, David 367,347 215,000 582,347
Dunn, Jeff 20,356 16,386 36,742
Electronic Commerce Consultants,
Inc. 400,000 400,000
EMC, Corporation 21,352 21,352
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Emery, Richard 2,000 400 2,400
Estate of Joseph Montesi, Sr. 77,778 25,926 103,704
Fegen and Associates 43,358 60,000 103,358
Fegen, Nicholas 440,000 440,000
Feste, Joseph 5,000 1,000 6,000
Fingleson, Rodney 9,900 9,900
GLF Investments, Inc 5,000 1,000 6,000
Great Neck Partners 47,200 84,994 132,194
Hamza, Petr 1,690 1,690
Havlena, Vladimir 1,949 1,949
H.D. Brous & Co., Inc. 39,254 39,254
Heartland Systems Company 20,000 39,201 59,201
Henricksen, Kenneth 6,000 1,200 7,200
iCapital corporation 100,000 100,000
Iverson, Thor 3,300 3,300
Jackson, Kimberly Colby 1,750 350 2,100
JRKC Advisors, Inc. 500,000 500,000
JTA Investments 2,500 500 3,000
Juranek, Pavel 1,170 1,170
Kanovsky, Vladimir 1,560 1,560
Kaplan, Errol 13,889 4,630 18,519
Keevins, David 1,250 250 1,500
Keevins, Edward 1,250 250 1,500
Kenneth Branagan Trust 28,572 9,524 38,096
KFT LLP 4,500 900 5,400
Lacy, Mary Rebecca 5,903 4,884 10,787
Leggio, Joseph 1,445 482 1,927
L.H.L. Holdings 32,212 32,212
Mailer, Howard 20,000 36,015 56,015
Mastroini, Greg 1,000 200 1,200
McGowan, Richard and Arline 20,000 36,015 56,015
Michael Associates 120,000 40,000 160,000
Montesi, Joe 11,112 3,704 14,816
Muehlberger, Karl 6,600 6,600
National Financial Communications,
Corp 27,244 60,000 87,244
O'Neil & Associates 206,897 206,897
Ozimek, Joseph 1,445 482 1,927
Perry, Larry 1000 200 1,200
Pipia, Vincent 20,000 36,015 56,015
Proskin, Arnold and Martha 2,889 963 3,852
Pursglove, George 5,000 10,000 15,000
Quenneville, Charles 1,875 3,675 5,550
Rich Options Co. 4,000 800 4,800
Richardson, George and Vicky 13,000 10,334 23,334
Roark, Larry 13,200 13,200
Robert Brous Trust 20,000 36,015 56,015
Robinson, David 4,288 4,288
Sheneman, Richard 625 125 750
SMP Financial Consultants 500,000 500,000
Snelling, Mark 1,250 250 1,500
Steinway Auto Sales 1,734 578 2,312
Stork, Paul 1,250 250 1,500
The Rockies Fund, Inc. 26,400 26,400
Thomas, William 13,200 13,200
Todd Brous Trust 20,000 36,015 56,015
Transbow LTD Singapore Limited 125,000 375,000 500,000
Vanderbilt Capital 690,000 56,000 746,000
Western Growth Partners 3,750 750 4,500
Williams, William 10,000 2,000 12,000
World Alliance Consulting, Inc. 200,000 200,000
TOTAL 3,876,302 4,021,874 7,898,176
(1) Assumes all shares owned, or which may be acquired, by the selling
shareholders, are sold to the public by means of this prospectus.
None of the selling shareholders will own more than 1% of Medcom's common
stock after this offering. With the exception of H.D. Brous & Co., Inc., none of
the selling shareholders, to the knowledge of Medcom, are broker-dealers or are
affiliated with broker-dealers.
The names of the natural persons who exercise control over those selling
shareholders which are corporations, partnerships, or similar entities are:
Name of Shareholder Controlling Persons
About Face Communications Scott Gallagher
Alsada SA, Inc. Chris Hyland
American Nortel Communications William Williams
Asian Restaurants Morris Salem
Augustine Fund, LP Thomas Duszynski
Bluefin Partners, Inc. Stephen Schwartz
Boselli Marketing Tony Boselli
Brunell Enterprises Mark Brunell
Chelverton Fund, Ltd. James P. Morton
Dapeer Rosenblit &Litvak, LLP William Litvak
Electronic Commerce Consultants, Inc. Brian Baginski
EMC, Corporation Scott Sevens
Estate of Joseph Montesi, Sr. Joe Montesi, Jr.
Fegen & Associates Nicholas Fegen
GLF Investments, Inc. Gregory Feste
Great Neck Partners Marc Lion
H.D. Brous & Co., Inc. Howard Brous
Heartland Systems Company Harold Carpenter
iCapital Corporation M. Blaine Riley
JRKC Advisors, Inc. Lisa Rookstool
JTA Investments Joan Nesbitt
KFT, LLP Robert H. Kite
L.H.L. Holdings Jack Levit
Michael Associates Al Ricardi
National Financial Communications, Corp. Geoffrey Eiten
O'Neil & Associates Ruzwa Cooper
Rich Options, Co. Richard Rothstein
SMP Financial Consultants James Caprio
Steinway Auto Sales John Salvio
The Rockies Fund, Inc. Stephen Calendrella
Transbow LTD Singapore Limited Cheah Yan Chin
Vanderbilt Capital David Hablenko
Western Growth Partners Robert H. Kite
World Alliance Consulting, Inc. BonnieJean C. Tippetts
The following selling shareholders have relationships with Medcom:
Name Nature of Relationship
Barak, Karel Employee of DCB
Chavtal, Martin Employee of DCB
Hamza, Petr Employee of DCB
Havlena, Vladimir Employee of DCB
Juranek, Pavel Employee of DCB
Kanovsky, Vladimir ` Employee of DCB
Copper, Jeff Former employee of MedCom
Muehlberger, Karl Employee of MedCom
Robinson, David Employee of MedCom
Pursglove, George Former Director of MedCom
About Face Communications Consultant - Investor Relations
Brawner, Harnold Richard Consultant - Sales and Marketing
Dapeer, Rosenblit & Litvak, LLP Outside Legal Counsel
Donovan, David Member of Technical Advisory
Board and Financial Consultant
Electronic Commerce Consultants, Inc. Consultant - Financial
EMC Corporation Lessor of Computer Equipment
Fegen & Associates Sales Agent for MedCom's common stock
and Investor Relations Consultant
Fegen, Nicholas Sales Agent for MedCom's common stock
and Investor Relations Consultant
H.D. Brous & Co., Inc. Consultant - Financial
iCapital Corporation Consultant - Financial
National Financial Communications, Corp. Consultant - Public Relations
O'Neil & Associates Consultant - Sales and Marketing
Vanderbilt Capital Consultant - Financial
World Alliance Consulting, Inc. Consultant - Investor Relations
Manner of Sale. The shares of common stock owned, or which may be
acquired, by the selling shareholders may be offered and sold by means of this
prospectus from time to time as market conditions permit in the over-the-counter
market, or otherwise, at prices and terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. These shares
may be sold by one or more of the following methods, without limitation: (a) by
a broker or dealer as agent for a selling shareholder; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker/dealer. In
effecting sales, brokers or dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated.
A Selling Shareholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of Medcom's
common stock in the course of hedging the positions they assume with such
Selling Shareholder, including, without limitation, in connection with the
distribution of Medcom's common stock by such broker-dealers. A Selling
Shareholder may also enter into option or other transactions with broker-dealers
that involve the delivery of the common stock to the broker-dealers, who may
then resell or otherwise transfer such common stock. A Selling Shareholder may
also loan or pledge the common stock to a broker-dealer and the broker-dealer
may sell the common stock so loaned or upon default may sell or otherwise
transfer the pledged common stock.
Broker-dealers, underwriters or agents participating in the distribution
of Medcom's common stock as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Shareholders and/or
purchasers of the common stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). Selling Shareholders and any broker-dealers who act in connection
with the sale of common stock hereunder may be deemed to be "Underwriters"
within the meaning of the Securities Act, and any commissions they receive may
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither Medcom nor any Selling Shareholder can presently estimate the amount of
such compensation. Medcom knows of no existing arrangements between any selling
shareholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of Medcom's common stock.
Medcom has advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the Prospectus delivery requirements under the Securities Act of
1933. Medcom has also advised the Selling Shareholders that in the event of a
"distribution" of the shares owned by the Selling Shareholder, such Selling
Shareholders, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. A "distribution" is defined in Rule 102 as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods". Medcom has also advised the Selling Shareholders that Rule 102
under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase" for
the purpose of pegging, fixing or stabilizing the price of the Common Stock in
connection with this offering. Rule 101 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution.
DESCRIPTION OF SECURITIES
Common Stock
Medcom is authorized to issue 80,000,000 shares of common stock. Holders of
common Stock are each entitled to cast one vote for each share held of record on
all matters presented to shareholders. Cumulative voting is not allowed; hence,
the holders of a majority of the outstanding common stock can elect all
directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of Medcom's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by Medcom. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock.
The Company's shareholders approved a one-for-five reverse stock split which
was effective on May 9, 2001.
Preferred Stock
Medcom is authorized to issue up to 1,000,000 shares of preferred stock.
Medcom's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Delaware statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of Medcom.
In April 1995, Medcom issued 25,250 shares of Series A preferred stock.
Each Series A preferred share is convertible into 0.04 of a share of Medcom's
common stock. As of June 30, 2000, 21,000 shares of the Series A preferred stock
had been converted into shares of Medcom's common stock.
In March 1996, Medcom issued 100,000 shares of its Series B preferred
stock. Each Series B preferred share is convertible into 0.05 of a share of
Medcom's common stock. As of July 31, 1999 all shares of the Series B preferred
stock had been converted into 5,000 shares of Medcom's common stock.
Between November 1998 and January 1999 Medcom sold 1,745 shares of its
Series C preferred stock. Medcom sold these shares because it needed capital and
no other source of capital was available at that time. In January 2000, the
Series C preferred shares were subsequently converted into 698,000 shares of
Medcom's common stock.
In April 2000 Medcom's Board of Directors established the Series D
Preferred Stock and authorized the issuance of up to 2,900 shares as part of
this series. Medcom issued 2,850 Series D Preferred shares in connection with
the acquisitions of DCB Actuaries & Consultants and the technology from DSM LLC.
Each Series D Preferred share is convertible at any time at the option of
the holder into 40.49 shares of Medcom's common stock. The Series D Preferred
shares will, at Medcom's option, convert into shares of Medcom's common stock,
in the manner described above, at any time after April 15, 2001 so long as the
bid price of Medcom's common stock exceeds $24.70 and the shares of common stock
issuable upon the conversion of the Series D Preferred shares are either covered
by an effective registration statement or are eligible for sale pursuant to Rule
144 of the Securities and Exchange Commission.
The Series D Preferred shareholders are entitled to receive cumulative
annual cash dividends of $40.00 per share payable each year on March 31. At
Medcom's option dividends may be paid in cash or in shares of Medcom's common
stock. For dividends paid in shares of common stock, the number of shares to be
issued will be determined by dividing the dollar amount of the dividends by the
average price of Medcom's common stock for the ten trading days ending three
days prior to the dividend payment date. In May 2001, the Company issued 74,962
shares of common stock to the Series D preferred stockholders as payment of all
accrued dividends owing through March 31, 2001.
Each Series D Preferred share is entitled to 40.49 votes on any matter
submitted to Medcom's shareholders for their consideration and approval.
In the event of any liquidation, dissolution or winding up (voluntary or
involuntary) of Medcom, the holders of the Series D Preferred shares are
entitled to receive out of Medcom's assets available for distribution to
shareholders, and before any distribution of assets is made to holders of
Medcom's common stock, liquidating distributions in the amount of $1,000 per
share plus accumulated and unpaid dividends.
Transfer Agent
Corporate Stock Transfer, Inc., of Denver, Colorado, is the transfer agent
for Medcom's common stock.
EXPERTS
The financial statements as of June 30, 2000 incorporated by reference in
this prospectus from Medcom's annual report on Form 10-KSB have been audited by
Ehrhardt Keefe Steiner & Hottman PC independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INDEMNIFICATION
Medcom's Bylaws authorize indemnification of a director, officer, employee
or agent of Medcom against expenses incurred by him in connection with any
action, suit, or proceeding to which he is named a party by reason of his having
acted or served in such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of Medcom who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling Medcom pursuant to the foregoing provisions, Medcom has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus. Any information or representation not contained in this prospectus
must not be relied upon as having been authorized by Medcom. This prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
Page
Prospectus Summary...........................................................
Risk Factors.................................................................
Documents Incorporated by Reference..........................................
Additional Information.......................................................
Comparative Share Data.......................................................
Selling Shareholders.........................................................
Description of Securities....................................................
Experts......................................................................
Indemnification.............................................................
Common Stock
MEDCOM USA, INCORPORATED
PROSPECTUS
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
SEC Filing Fee $ 2,107
Blue Sky Fees and Expenses 100
Printing and Engraving Expenses 500
Legal Fees and Expenses 15,000
Accounting Fees and Expenses 5,000
Miscellaneous Expenses 2,293
----------
TOTAL $ 25,000
========
All expenses other than the S.E.C. filing fees are estimated.
Item 15. Indemnification of Officers and Directors.
-----------------------------------------
The Delaware General Corporation Law and Medcom's Bylaws that Medcom
may indemnify any and all of its officers, directors, employees or agents or
former officers, directors, employees or agents, against expenses actually and
necessarily incurred by them, in connection with the defense of any legal
proceeding or threatened legal proceeding, except as to matters in which such
persons shall be determined to not have acted in good faith and in the best
interest of Medcom.
Item 16. Exhibits
Exhibits Page Number
1 Underwriting Agreement N/A
-----------------
3.1 Certificate of Incorporation, as amended (1)
----------------
3.1.1 Amendment to Articles of Incorporation (1)
---------------
3.2 Bylaws (l)
--------------
4.1 Incentive Stock Option Plan (5)
--------------
4.2 Non-Qualified Stock Option Plans (5)
-----------------
4.3 Stock Bonus Plans (5)
----------------
4.4 Designation of Series C Preferred Stock (4)
---------------
4.5 Certificate of Designation of the Powers, (6)
----------------
Preferences and Relative, Participating,
Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and
Restrictions thereof, relating to Series D
Cumulative Convertible Preferred Stock.
5 Opinion of Counsel
-----------------
10 Series C Preferred Stock Purchase Agreement,
Escrow Agreement, Registration Rights Agreement (4)
----------------
and Form of Warrant
10.1 Agreement relating to acquisition of Medcard System Previously filed
10.2 Agreement relating to sale of assets of Link
International Previously filed
10.3 Employment Agreement with Mark Bennett Previously filed
10.4 Employment Agreement with Michael Malet Previously filed
10.5 July 1999 Licensing Agreement relating (5)
----------------
to One Medical System.
10.6 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Vladimir Havlena.
10.7 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Vladimir Kanovsky.
10.8 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Petr Hamza.
10.9 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Martin Chvatal.
10.10 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Pavel Juranek.
10.11 Shareholder Agreement dated March 31, 2000 (6)
----------------
between Medcom USA, Inc. and Karel Barak.
10.12 Supplement to Shareholder Agreement, dated (6)
----------------
April 13, 2000, between Medcom USA, Inc. and
Vladimir Kanovsky.
10.13 Supplement to Shareholder Agreement, dated (6)
----------------
April 13, 2000, between Medcom USA, Inc. and
Petr Hamza.
10.14 Supplement to Shareholder Agreement, dated (6)
----------------
April 13, 2000, between Medcom USA, Inc. and
Martin Chvatal.
10.15 Supplement to Shareholder Agreement, dated (6)
----------------
April 13, 2000, between Medcom USA, Inc. and
Pavel Juranek.
10.16 Supplement to Shareholder Agreement, dated (6)
----------------
April 13, 2000, between Medcom USA, Inc. and
Karel Barak.
10.17 Share Purchase Agreement dated as of April 15, (6)
----------------
2000 by and among DCB Actuaries and
Consultants, SRO, David Robinson, Vladimir
Havlena and Medcom USA, Inc.
10.18 Technology Purchase Agreement dated as of (6)
----------------
April 15, 2000 by and between DSM, LLC and
Medcom USA, Inc.
10.19 Amendment to License Agreement between Dream (7)
----------------
Technologies, LLC, MedCard Management Systems,
Inc. and MedCom USA, Incorporated.
23.1 Consent of Hart and Trinen _______________
23.2 Consent of Ehrhardt Keefe Steiner & Hottman, PC _______________
24. Power of Attorney Included as part
of the Signature
Page
(1) Incorporated by reference to the same exhibit filed as part of Medcom's
Registration Statement on Form SB-2 (Commission File No. 33-70546-A).
(2) Incorporated by reference, and as same exhibit number, from Registration
Statement on Form SB-2 (Commission File Number 33-70546-A).
(3) Incorporated by reference, and as same exhibit number, from Amendment No. 1
to Registration Statement on Form SB-2 (Commission File Number 33-70546-A).
(4) Incorporated by reference, and as same exhibit number, from the Company's
report on 8-K dated December 14, 1998.
(5) Incorporated by reference to the same exhibit filed with the Company's
Annual Report on Form 10-KSB/A for the year ending June 30, 1999.
(6) Incorporated by reference to the same exhibit filed with the Company's 8-K
Report dated April 15, 2000.
(7) Incorporated by reference to the same exhibit filed as part of Amendment
No. 5 to Medcom's registration statement on Form S-3 (Commission File #
333-71179)
Item 17. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.
(i) To include any Prospectus required by Section l0(a)(3) of the
Securities Act of l933; (ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement, including
(but not limited to) any addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the Securities
Act of l933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of l933 may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on the 16th day of May,
2001.
MEDCOM COMMUNICATIONS INC.
By: /s/ Mark Bennett
---------------------------------
Mark Bennett, President
By: /s/ Alan Ruben
----------------------------
Alan Ruben, Principal Financial Officer
and Chief Accounting Officer
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Mark Bennett
-----------------
Mark Bennett Director May 16, 2001
/s/ Michael Malet
----------------------
Michael Malet Director May 16, 2001
/s/ David Breslow
----------------------
David Breslow Director May 16, 2001
Julio Curra Director
29