form-s2_111201
As filed with the Securities and Exchange Commission on November 16, 2001 Registration
No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MEDIX RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Colorado 84-1123311
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
305 Madison Avenue, 20th Floor
New York, New York 10165
(212) 697-2509
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Lyle B. Stewart, Esq.
Lyle B. Stewart, P.C.
3751 S. Quebec Street
Denver, CO 80237
(303) 267-0920
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
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 the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to item 11(a)(1)
of this Form, check the following box:
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 statement 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share (1) Price (1) Fee
---------------------------------------------------------------------------------------------
Common stock, par 447,500 shares $0.75 $335.625 $84.00
value, $.001 per
share
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(1) Estimated solely for the purpose of calculating the registration fee. In
accordance with Rule 457(c), the price shown is based upon the average of the
high and low prices of Medix's Common Stock on November 12, 2001, reported on
the American Stock Exchange.
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 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
SUBJECT TO COMPLETION
DATED NOVEMBER 15, 2001
PROSPECTUS
MEDIX RESOURCES, INC.
447,500 Shares of Common Stock
The shareholders of Medix Resources, Inc. named herein will have the right
to offer and sell up to an aggregate of 447,500 shares of our common stock under
this Prospectus.
Medix will not receive directly any of the proceeds from the sale of these
shares by the selling shareholders. However, Medix will receive the proceeds of
the exercise of the options and warrants to purchase the shares to be sold
hereunder. Medix will pay the expenses of registration of these shares.
The common stock is traded on the American Stock Exchange under the symbol
"MXR". On November 12, 2001, the closing price of the common stock was reported
as $0.75.
The securities offered hereby involve a high degree of risk. See "RISK
FACTORS" beginning on page 3 for certain risks that should be considered by
prospective purchasers of the securities offered hereby.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is _____ __, 2001
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in or incorporated by
reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by us, the
selling shareholders or any other person. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such an
offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in our affairs since such date.
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TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
RISK FACTORS
THE COMPANY
USE OF PROCEEDS
SELLING SHAREHOLDERS
DESCRIPTION OF SECURITIES
PLAN OF DISTRIBUTION
INDEMNIFICATION OF OFFICERS AND DIRECTORS
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
LEGAL MATTERS
EXPERTS
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference into this
Prospectus contain forward-looking statements, which mean that they relate to
events or transactions that have not yet occurred, our expectations or estimates
for Medix's future operations, our growth strategies or business plans or other
facts that have not yet occurred. Such statements can be identified by the use
of forward-looking terminology such as "might," "may," "will," "could,"
"expect," "anticipate," "estimate," "likely," "believe," or "continue" or the
negative thereof or other variations thereon or comparable terminology. The
following risk factors contain discussions of important factors that should be
considered by prospective investors for their potential impact on
forward-looking statements included in this Prospectus and in the documents
incorporated by reference into this Prospectus. These important factors, among
others, may cause actual results to differ materially and adversely from the
results expressed or implied by the forward-looking statements.
RISK FACTORS
An investment in our common stock:
o has a high degree of risk;
o is highly speculative;
o should only be considered by those persons or entities who can afford to
loose their entire investment.
In addition to the other information contained in this Prospectus, the
following risk factors should be carefully considered in evaluating our business
and an investment in our shares. The order in which the following risk factors
are presented does not indicate the relative magnitude of the risks described.
Our Continuing Losses; Going Concern Exception; Our Need for Additional Financing
We reported net losses of ($5,415,000), ($4,847,000) and ($5,422,000) for
the years ended December 31, 2000, December 31, 1999 and December 27, 1998,
respectively, and a net loss of ($6,486,000) for our 2001 first three quarters
ended September 30, 2001. At September 30, 2001 we had an accumulated deficit of
($30,499,000) and a negative working capital of ($1,949,000). Our independent
accountants have included a "going concern" exception in their audit report on
our audited 2000 financial statements. See our Form 10-KSB for the fiscal year
ended December 31, 2000.
We expect to continue to experience loses, in the near term, until such
time as our Cymedix(R)software products can be successfully deployed with
customers and produce revenue. During 2001, we have been delinquent, from time
to time, in the payment of our current obligations, including payments of
withholding and other tax obligations. As at this filing date, the Company is
current on all payroll and tax related obligations. The current operation of our
business and our ability to continue to develop our Cymedix software products
will depend upon our ability to obtain additional financing. Currently, we are
not receiving any significant revenues from the sale of our Cymedix software
products. We are attempting to meet our current cash flow needs by raising
capital in the private debt and equity markets. The development, marketing and
deployment of the Cymedix software products require continuing working capital.
There can be no assurance that additional investments or financings will be
available to us as needed to support the development of Cymedix products.
Failure to obtain such capital on a timely basis could result in lost business
opportunities, the sale of the Cymedix business at a distressed price or the
financial failure of our company.
Risk of Development Stage Company
Since the sale of our remaining temporary staffing business in early 2000,
we principally develop software for Internet-based communications and
information management for medical service providers, through our wholly-owned
subsidiary, Cymedix Lynx Corporation. Our software products have been tested and
are currently being tested by several different healthcare providers. However,
our Cymedix software business has not yet generated any significant revenues and
will not do so until deployed in a "live" transaction setting. The Company
expects to begin deployment in the near term.
We are still in the process of gaining experience in marketing software
products, providing software support services, evaluating demand for products,
financing a software business and dealing with government regulation of software
products. While we are putting together a team of experienced executives, they
have come from different backgrounds and may require some time to develop an
efficient operating structure and corporate culture for our company. We believe
our structure of multiple offices serves our customers well, but it does present
an additional challenge in building our corporate culture and operating
structure.
Our products are still in the development stage and have not yet proven
their effectiveness or their marketability. As a developer of software products,
we will be required to anticipate and adapt to evolving industry standards and
new technological developments. The market for our software products is
characterized by continued and rapid technological advances in both hardware and
software development, requiring ongoing expenditures for research and
development, and timely introduction of new products and enhancements to
existing products. The establishment of standards is largely a function of user
acceptance. Therefore, such standards are subject to change. Our future success,
if any, will depend in part upon our ability to enhance existing products, to
respond effectively to technology changes, and to introduce new products and
technologies to meet the evolving needs of our clients in the healthcare
information systems market. The introduction of software products in that market
has been slow due to the large number of small practitioners who are resistant
to change and the costs associated with change, particularly in a period of
rising pressure to reduce costs in the market. We are currently devoting
significant resources toward the development of products. There can be no
assurance that we will successfully complete the development of these products
in a timely fashion or that our current or future products will satisfy the
needs of the healthcare information systems market. Further, there can be no
assurance that products or technologies developed by others will not adversely
affect our competitive position or render our products or technologies
noncompetitive or obsolete.
Product Liability Risks
Certain of our products provide applications that relate to patient medical
histories and treatment plans. Any failure by our products to provide accurate,
secure and timely information could result in product liability claims against
us by our clients or their affiliates or patients. We maintain insurance that we
believes is adequate to protect against claims associated with the use of our
products, but there can be no assurance that our insurance coverage would
adequately cover any claim asserted against us. A successful claim brought
against us in excess of our insurance coverage could have a material adverse
effect on our results of operations, financial condition or business. Even
unsuccessful claims could result in the expenditure of funds in litigation, as
well as diversion of management time and resources.
There is Great Uncertainty in the Healthcare Industry
The healthcare and medical services industry in the United States is in a
period of rapid change and uncertainty. Governmental programs have been
proposed, and some adopted, from time to time, to reform various aspects of the
U.S. healthcare delivery system. Some of these programs contain proposals to
increase government involvement in healthcare, lower reimbursement rates and
otherwise change the operating environment for our customers. Particularly, the
Health Insurance Portability and Accountability Act of 1996, and the regulations
that are being promulgated thereunder, are causing the healthcare industry to
change its procedures and incur substantial cost in doing so. Although we expect
these regulations to have the beneficial effect of spurring adoption of our
software products we cannot predict with any certainty what impact, if any,
these and future healthcare reforms might have on our business.
Risks of Infringement of Proprietary Technology
Our wholly-owned subsidiary, Cymedix Lynx Corporation, has been granted
certain patent rights, trademarks and copyrights relating to its software
business. These patents and copyrights have been assigned by our subsidiary to
the parent company, Medix. The patent rights and intellectual property legal
issues for software programs, such as the Cymedix(R) products, are complex and
currently evolving. Since patent applications are secret until patents are
issued, in the United States, or published, in other countries, we cannot be
sure that we are the first to file any patent application. In addition, there
can be no assurance that competitors, many of which have far greater resources
than we do, will not apply for and obtain patents that will interfere with our
ability to develop or market product ideas that we have originated. Further, the
laws of certain foreign countries do not provide the protection to intellectual
property that is provided in the United States, and may limit our ability to
market its products overseas. We cannot give any assurance that the scope of the
rights that we have been granted are broad enough to fully protect our Cymedix
software from infringement.
Litigation or regulatory proceedings may be necessary to protect our
intellectual property rights, such as the scope of our patent. In fact, the
computer software industry in general is characterized by substantial
litigation. Such litigation and regulatory proceedings are very expensive and
could be a significant drain on our resources and divert resources from product
development. There is no assurance that we will have the financial resources to
defend our patent rights or other intellectual property from infringement or
claims of invalidity.
We also rely upon unpatented proprietary technology and no assurance can be
given that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to or disclose
our proprietary technology or that we can meaningfully protect our rights in
such unpatented proprietary technology. We will use our best efforts to protect
such information and techniques, however, no assurance can be given that such
efforts will be successful. The failure to protect our intellectual property
could cause us to loose substantial revenues and to fail to reach its financial
potential over the long term.
Our Business is Highly Competitive
Medical Information Software. Competition can be expected to emerge from
established healthcare information vendors and established or new Internet
related vendors. The most likely competitors are companies with a focus on
clinical information systems and enterprises with an Internet commerce or
electronic network focus. Many of these competitors will have access to
substantially greater amounts of capital resources than we have access to, for
the financing of technical, manufacturing and marketing efforts. Frequently,
these competitors will have affiliations with major medical product companies or
software developers, who will assist in the financing of such competitor's
product development. We will seek to raise capital to develop Cymedix products
in a timely manner, however, so long as our operations remain underfunded, as
they now are, we will be at a competitive disadvantage.
Software Development Personnel. The success of the development of our
Cymedix software is dependent to a significant degree on our key management and
technical personnel. We believe that our success will also depend upon our
ability to attract, motivate and retain highly skilled, managerial, sales and
marketing, and technical personnel, including software programmers and systems
architects skilled in the computer languages in which our Cymedix products
operate. Competition for such personnel in the software and information services
industries is intense. The loss of key personnel, or the inability to hire or
retain qualified personnel, could have a material adverse effect on our results
of operations, financial condition or business.
Securities Law Issues
We have raised substantial amounts of capital in private placements from
time to time. The securities offered in such private placements were not
registered with the Securities and Exchange Commission or any state agency in
reliance upon exemptions from such registration requirements. Such exemptions
are highly technical in nature and if we inadvertently failed to comply with the
requirements of any of such exemptive provisions, investors would have the right
to rescind their purchase of our securities or sue for damages. If one or more
investors were to successfully seek such rescission or institute such suit,
Medix could face severe financial demands that could material and adversely
affect our financial position.
Impact of Shares Eligible for Future Sale
As of November 1, 2001, we had 54,669,447 shares of common stock
outstanding. As of that date, approximately 16,720,168 shares were issuable upon
the exercise of outstanding options, warrants or other rights, and the
conversion of preferred stock. Most of these shares will be immediately saleable
upon exercise or conversion under registration statements we have filed with the
U.S. Securities and Exchange Commission (the "SEC"). The exercise prices of
options, warrants or other rights to acquire common stock presently outstanding
range from $0.19 per share to $4.97 per share. During the respective terms of
the outstanding options, warrants, preferred stock and other outstanding
derivative securities, the holders are given the opportunity to profit from a
rise in the market price of the common stock, and the exercise of any options,
warrants or other rights may dilute the book value per share of the common stock
and put downward pressure on the price of the common stock. The existence of the
options, conversion rights, or any outstanding warrants may adversely affect the
terms on which we may obtain additional equity financing. Moreover, the holders
of such securities are likely to exercise their rights to acquire common stock
at a time when we would otherwise be able to obtain capital on terms more
favorable than could be obtained through the exercise or conversion of such
securities. See also the impact of our equity line of credit financing discussed
in the following paragraphs.
Dilution Due to Equity Line of Credit
In connection with our equity line of credit financing, we have registered
9,500,000 additional shares with the SEC for sale by the providers of the
financing, of which 8,012,780 shares remain available for issuance as of
November 1, 2001. The resale of the common stock that may be issued by us under
the equity line of credit described herein will substantially increase the
number of our publicly traded shares ("float"). If existing shareholders
perceive that this increased float is not accompanied by a commensurate increase
in value to the Company, then shareholder value--real or perceived--will be
diluted. Such dilution could cause holders of our shares of common stock to
sell, thus depressing the price of our common stock. Therefore, the very
existence of the equity line financing could depress the market price of our
common stock.
Risk of Additional Selling Pressure on Stock Price
The resale of the common stock that will be issued by us under our equity
line of credit financing could depress the market price of our common stock.
This would occur if such resale took the form of heavy volume, or volume
concentrated in a relatively short period, at levels greater than the trading
activity of our stock could normally support. Furthermore, the terms of the
equity line provide that we will sell shares of our common stock to the
providers of the financing at 91% of the average of the three lowest of the
daily volume-weighted average prices of our common stock during the 22-trading
day period immediately before our request for the advance. Therefore, since all
of the shares that are issued by us in connection with advances under the equity
line financing will have a "built-in" discount of at least 9% upon issuance,
this could produce an impetus for the providers of the equity line to resell
their shares sooner or in greater quantity than they would otherwise. Such
resale could have the effect of depressing our share price.
Volatility of Our Stock Price
Historically, our common stock has experienced significant price
fluctuations. This has been caused by one or more of the following factors:
o unfavorable announcements or press releases relating to the technology sector;
o regulatory, legislative or other developments affecting our company or the
health care industry generally;
o conversion of our preferred stock and convertible debt into common stock at
conversion rates based on current market prices or below on current market
prices of our common stock and exercise of options and warrants at below
current market prices;
o sales by those financing our company through an equity line of credit or
convertible securities which have been registered with the SEC and may be
sold into the public market immediately upon receipt; and
o market conditions specific to technology and internet companies, the health
care industry and general market conditions.
In addition, in recent years the stock market has experienced significant
price and volume fluctuations. These fluctuations, which are often unrelated to
the operating performance of specific companies, have had a substantial effect
on the market price for many health care related technology companies. Factors
such as those cited above, as well as other factors that may be unrelated to our
operating performance may adversely affect the price of our common stock.
Application of Penny Stock Rules to Our Common Stock
Trading of our common stock may be subject to the penny stock rules under
the Securities Exchange Act of 1934, as amended, unless an exemption from such
rules is available. Broker-dealers making a market in our common stock will be
required to provide disclosure to their customers regarding the risks associated
with our common stock, the suitability for the customer of an investment in our
common stock, the duties of the broker-dealer to the customer and information
regarding bid and ask prices for our common stock, and the amount and
description of any compensation the broker-dealer would receive in connection
with a transaction in our common stock. The application of these rules may
result in fewer market makers making a market of our common stock and further
restrict the liquidity of our common stock.
Absence of Common Stock Dividends
We have not had earnings, but if earnings were available, it is our general
policy to retain any earnings for use in our operation. Therefore, we do not
anticipate paying any cash dividends on our common stock in the foreseeable
future. Any payment of cash dividends on our common stock in the future will be
dependent upon our financial condition, results of operations, current and
anticipated cash requirements, plans for expansion, as well as other factors
that the Board of Directors deems relevant. We anticipate that our future
financing agreements will prohibit the payment of common stock dividends without
the prior written consent of those providers.
THE COMPANY
Medix Resources, Inc., a Colorado corporation, sold its supplemental
staffing business, which operated under the tradenames "National Care Resources"
and "TherAmerica" on February 19, 2000, and now principally develops software
for Internet-based communications and information management for medical service
providers, through its wholly-owned subsidiary, Cymedix Lynx Corporation.
We acquired Cymedix in January of 1998. Cymedix has developed
Internet-based communications and information management product, which we began
marketing to medical professionals in select markets nationwide. Growth of the
medical information management marketplace is being driven by the need to share
significant amounts of clinical and patient information between physicians,
their outpatient service providers, hospitals, insurance companies and managed
care organizations. This market is one of the fastest-growing sectors in
healthcare today, commanding a projected two-thirds of health care capital
investments. The Cymedix(R)software contains patented elements that can be used
to develop secure medical communications products that make use of the Internet.
Using the Cymedix software, medical professionals can order, prescribe and
access medical information from insurance companies and managed care
organizations, as well as from any participating outpatient service provider,
such as a laboratory, radiology center, pharmacy or hospital. We will provide
the software at minimal charges to physicians and clinics, and will collect user
fees whenever these products are used to provide services on the Internet. The
products' relational database technology will provide physicians with a
permanent, ongoing record of each patient's name, address, insurance or managed
care affiliation, referral status, medical history, personalized notes and an
audit trail of past encounters. Physicians will be able to electronically order
medical procedures, receive and store test results, check patient eligibility,
make medical referrals, request authorizations, and report financial and
encounter information in a cost-effective, secure and timely manner.
Our principal executive office is located at 305 Madison Ave., Suite 2033,
New York, NY 10165, and its telephone number is (212) 697-2509. Our principal
administrative office is at 7100 East Belleview Ave., Greenwood Village, CO
80111, and its telephone number is (303) 741-2045. We also have offices in
California, Georgia and New Jersey.
USE OF PROCEEDS
The net proceeds from the sale of shares will be received by the selling
shareholders. Medix will not receive any of the proceeds from any sale of the
shares by the selling shareholders. However, Medix will receive the proceeds
from the exercise of warrants and options to purchase the shares to be sold
hereunder. Such proceeds will be used as working capital.
SELLING SHAREHOLDERS
The table below sets forth information as of November 12, 2001, with
respect to the selling shareholders, including names, holdings of shares of
common stock prior to the offering of the shares, the number of shares being
offered for each account, and the number and percentage of shares of common
stock to be owned by the selling shareholders immediately following the sale of
the shares, assuming all of the offered shares are sold.
Shares of
Shares of Common Stock to be
Common Stock be Beneficially Owned
Beneficially Shares of Owned After the Offering
Owned Before Common Stock ------------------------
Name the Offering Being Offered Number Percentage
------------------------ ------------ ------------- ------ ----------
Michael J. Ruxin 195,000 195,000 0 0
Nais Corporation 250,000 90,000 160,000 *
Lyle B. Stewart 200,000 75,000 125,000 *
Fritz & Miller, P.C. 15,035 9,568 5,467 *
Shapiro Forman Allen & 30,800 19,600 11,200 *
Miller LLP
Guli R. Rajani 30,555 19,444 11,111 *
Nicole S. Rajani 30,555 19,444 11,111 *
Ajay G. Rajani 30,555 19,444 11,111 *
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Total 782,500 447,500
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*less than 1%
Relationship Between Medix and the Selling Shareholders
The selling shareholders have or will acquire the shares of common stock
indicated above upon the exercise of warrants or options issued for services
rendered or in settlement of litigation. None of the persons listed above are
affiliates or controlled by affiliates of the Company. We have a separate
contractual obligation to file this registration with certain of the selling
shareholders.
DESCRIPTION OF SECURITIES
Our authorized capital consists of 100,000,000 shares of common stock, par
value $.001 per share, and 2,500,000 shares of preferred stock. As of November
1, 2001, we had outstanding 54,669,447 shares of common stock, 1 share of 1996
Preferred Stock, 50 shares of 1999 Series B Preferred Stock and 375 shares of
1999 Series C Preferred Stock. As of such date, our common stock was held of
record by approximately 375 persons and beneficially owned by approximately
9,000 persons.
Common Stock
Each share of common stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the election
of directors. Currently, the Board of Directors consists of six directors, who
serve for staggered terms of three years, with at least two directors elected at
every annual meeting. All shares of common stock are equal to each other with
respect to liquidation rights and dividend rights. There are no preemptive
rights to purchase any additional common stock. In the event of liquidation,
dissolution or winding up of Medix, holders of the common stock will be entitled
to receive on a pro rata basis all assets of Medix remaining after satisfaction
of all liabilities and preferences of the outstanding preferred stock. The
outstanding shares of common stock and the shares of common stock issuable upon
conversion or exercise of derivative securities are or will be, as the case may
be, duly and validly issued, fully paid and non-assessable.
Transfer Agent and Registrar
We have retained Computershare Trust Company, Inc., 12039 W. Alameda
Parkway, Suite Z-2, Lakewood, Colorado 80228, as Transfer Agent and Registrar
for the our common stock, (303) 986-5400.
PLAN OF DISTRIBUTION
The selling shareholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;
o an exchange distribution in accordance with the rules of the applicable exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling shareholders to sell a specified number of
such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in securities of the Company or
derivatives of Company securities and may sell or deliver shares in connection
with these trades. The selling shareholders may pledge their shares to their
brokers under the margin provisions of customer agreements. If a selling
shareholder defaults on a margin loan, the broker may, from time to time, offer
and sell the pledged shares. The selling shareholders have advised the Company
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their shares other
than ordinary course brokerage arrangements, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling shareholders.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
Selling shareholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
The Company is required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to
certain of the selling shareholders. Otherwise, all discounts, commissions or
fees incurred in connection with the sale of the common stock offered hereby
will be paid by the selling shareholders. The Company has agreed to indemnify
certain selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Upon the Company being notified by a selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling shareholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and complied with.
The Company has advised the selling shareholders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales of the shares offered hereby.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article 109 of the Colorado Business Corporation Act generally provides
that Medix may indemnify its directors, officers, employees and agents against
liabilities in any action, suit or proceeding whether civil, criminal,
administrative or investigative and whether formal or informal (a "Proceeding"),
by reason of being or having been a director, officer, employee, fiduciary or
agent of Medix, if such person acted in good faith and reasonably believed that
his conduct, in his official capacity, was in the best interests of Medix (or,
with respect to employee benefit plans, was in the best interests of the
participants of the plan), and in all other cases that his conduct was at least
not opposed to Medix's best interests. In the case of a criminal proceeding, the
director, officer, employee or agent must have had no reasonable cause to
believe that his conduct was unlawful. Under Colorado Law, Medix may not
indemnify a director, officer, employee or agent in connection with a proceeding
by or in the right of Medix if the director is adjudged liable to Medix, or in a
proceeding in which the directors, officer employee or agent is adjudged liable
for an improper personal benefit.
Our Articles of Incorporation provide that we shall indemnify its
directors, and officers, employees and agents to the extent and in the manner
permitted by the provisions of the laws of the State of Colorado, as amended
from time to time, subject to any permissible expansion or limitation of such
indemnification, as may be set forth in any shareholders' or directors'
resolution or by contract.
Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to directors, officers
or persons controlling Medix pursuant to the foregoing provisions, Medix has
been informed that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
AVAILABLE INFORMATION
We are a reporting company and file our annual, quarterly and current
reports, proxy material and other information with the SEC. Reports, proxy
statements and other information concerning Medix filed with the Commission may
be inspected at the Public Reference Room maintained by the Commission at its
office, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material
can be obtained from the Public Reference Room of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The public may obtain
information about the Public reference room in Washington, D.C. by calling the
SEC at 1-800-SEC-0330. Our SEC filings are also available at the SEC's Website
at "http:\\www.sec.gov".
We have filed a registration statement under the Securities Act, with
respect to the securities offered pursuant to this Prospectus. This Prospectus
does not contain all of the information set forth in the registration statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
registration statement and the exhibits filed as a part thereof, which may be
found at the locations and Website referred to above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to the documents filed with the SEC that contains that
information. The information incorporated by reference is an important part of
this Prospectus, and it is important that you review it before making your
investment decision. We hereby incorporate by reference the documents listed
below:
(a) a copy of our Annual Report on Form 10-KSB for the fiscal year ended December 31,
2000, filed with the SEC on March 21, 2001;
(b) copies of our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
June 30, and September 30, 2001, filed with the SEC on May 14, August 14, and
November 14, 2001;
(c) copies of the our Forms 8-K, filed with the SEC on January 9, January 16, January 17,
January 29, February 1, February 20, March 15, March 27, April 5, April 11, April 23,
May 24, June 12, June 22, 2001, July 30, October 9, October 24, October 31, and
November 2, 2001.
We are delivering with this Prospectus a copy of the Form 10-KSB and the
most recent Form 10-Q referred to above. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus, or
made herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to
the date of this Prospectus and prior to the termination of the Offering
pursuant to this Prospectus shall be deemed to be incorporated by reference and
to be a part of this Prospectus from the date of filing of such documents.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon oral or written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, other than the exhibits to such documents (unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Investor Relations
Department, Medix Resources, Inc., 7100 E. Belleview Avenue, Suite 301,
Greenwood Village, Colorado 80111, telephone (303) 741-2045.
LEGAL MATTERS
The validity of the shares offered hereby is being passed upon for us by
Lyle B. Stewart, P.C. Lyle B. Stewart, P.C. has been granted options to purchase
25,000 shares of Medix common stock at an exercise price of $0.26 per share, and
Mr. Stewart, individually, has been granted options to purchase 100,000 and
75,000 shares of Medix common stock at exercise prices of $3.38 and $0.92 per
share, respectively.
EXPERTS
The consolidated financial statements of Medix as of December 31, 2000, and
for each of the two years in the period ended December 31, 2000 appearing in our
2000 Form 10-KSB have been audited by Ehrhardt Keefe Steiner & Hottman P.C.,
independent auditors, as stated in their report appearing therein, and have been
incorporated herein by reference in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the issuance and distribution of the Shares being
registered hereby.
SEC Registration Fee................................$ 84
Blue Sky Filing Fees and Expenses................... 0*
Accountants' Fees and Expenses...................... 1,000*
Legal Fees and Expenses............................. 5,000*
Miscellaneous....................................... 0*
------
TOTAL...............................................$6,084*
======
--------------------
* Estimated, subject to change.
The Company will bear all of the above expenses of the registration of the Shares.
Item 15. Indemnification of Directors and Officers.
See "INDEMNIFICATION OF OFFICERS AND DIRECTORS" in the Prospectus.
Item 16. Exhibits.
Exhibit
Number Description
------- -----------
5.1 Opinion of Lyle B. Stewart, Esq
23.1 Consent of Ehrhardt Keefe Steiner & Hottman P.C.
23.2 Consent of Lyle B. Stewart, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
------------
* Previously Filed
Item 17. Undertakings.
A. 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 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(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. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and
any deviation from the low or high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective 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;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required
to be included in a post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Securities and Exchange Commission (the
"Commission") by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act, 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.
B. Insofar as indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the
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 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-2 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in New York, New York on November 14,
2001.
MEDIX RESOURCES, INC.
By /s/ John R. Prufeta
John R. Prufeta,
President and CEO
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and on the dates
indicated.
Each person whose signature appears below in so signing also makes, constitutes and
appoints John R. Prufeta and Gary L. Smith, and each of them, his or her true and lawful
attorney-in-fact, with full power of substitution, for him in any and all capacities, to
execute and cause to be filed with the Securities and Exchange Commission any and all
amendments and post-effective amendments to this Registration Statement, with exhibits
thereto and other documents in connection therewith, and hereby ratifies and confirms all
that said attorney-in-fact or his substitute or substitutes may do or cause to be done by
virtue hereof.
Signature Title Date
--------- ----- ----
/s/ John R. Prufeta President, Chief Executive November 16, 2001
John R. Prufeta Officer and Director
(Principal Executive
Officer)
/s/ Gary L. Smith Executive Vice President November 16, 2001
Gary L. Smith and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
/s/ John T. Lane Director November 16, 2001
John T. Lane
/s/ David B. Skinner Director November 16, 2001
David B. Skinner
/s/ Samuel H. Havens Director November 16, 2001
Samuel H. Havens
/s/ Joan E. Herman Director November 16, 2001
Joan E. Herman
_______________ Director November __, 2001
Patrick W. Jeffries
_______________ Director November __, 2001
Guy L. Scalzi
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
5.1 Opinion of Lyle B. Stewart, Esq.
23.1 Consent of Ehrhardt Keefe Steiner & Hottman P.C.
23.2 Consent of Lyle B. Stewart, Esq.
(included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page)