<PAGE>
Prospectus Supplement filed under Rule 424(b)3
in connection with Registration No. 333-90729
PROSPECTUS SUPPLEMENT NO. 1 DATED April 20, 2000
(To Prospectus Dated January 27, 2000)
MedCare Technologies, Inc.
1,507,975 shares of common stock, par value $.001 per share (Supplement
to the 1,054,085 shares originally set forth in the Prospectus, of which 250,255
shares already have been sold under the Prospectus and are not included in the
1,507,975 shares shown as being offered by this Prospectus Supplement)
This Prospectus Supplement supplements information contained in the
Prospectus, dated January 27, 2000, as amended or supplemented (the
"Prospectus") relating to the offer and sale by certain selling security holders
of up to 1,054,085 shares of common stock of MedCare Technologies, Inc. Of the
1,054,085 shares originally set forth in the Prospectus, 250,255 shares already
have been sold under the Prospectus and are not included in the 1,507,975 shares
listed as being offered by this Prospectus Supplement. The 1,507,975 shares
shown as being offered by this Prospectus Supplement includes 803,830 shares
which were included in the original Prospectus but which have not yet been sold
under the Prospectus. This Prospectus Supplement is not complete without, and
may not be delivered or utilized except in connection with, the Prospectus,
including any amendments or supplements thereto. The information set forth in
this Prospectus Supplement amends, supplements and supersedes the relevant
information on the cover page and the Selling Stockholders section of the
Prospectus.
SELLING STOCKHOLDERS
We will issue the shares to the selling stockholders (1) upon conversion
of the Series B preferred stock or (2) upon exercise of the warrants, both of
which we issued pursuant to the securities purchase agreement. We are
registering the shares in order to permit the selling stockholders to offer
these shares for resale from time to time. Except for the ownership of the
Series B preferred stock, the warrants and the common stock underlying the
Series B preferred stock and warrants, the selling stockholders have not had any
material relationship with us within the past three years.
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the common stock by each of the selling
stockholders.
The second column lists, for each selling stockholder, the number of
shares of common stock which would have been issuable to the selling stockholder
on April 19, 2000 upon conversion of all of the Series B preferred stock
outstanding on April 19, 2000 and exercise of the warrants which vest within 60
days of April 19, 2000. This number includes shares of common stock that were
payable as dividends on the outstanding Series B preferred stock as of April 19,
2000. This number does not include any unvested warrants. We determined this
number without regard to the 4.99% limit on beneficial ownership, discussed
below. Our calculations of the number of shares of common stock into which the
selling stockholders may convert the Series B preferred stock or exercise the
warrants in the second column assumes a conversion price for the Series B
preferred stock of $1.0625. Because the conversion of the Series B preferred
stock is based on a formula that is dependent upon the market price of our
common stock, the numbers listed in the second column may fluctuate from time to
time.
The third column lists each selling stockholder's pro rata portion,
based on its ownership of Series B preferred stock, of the 1,507,975 shares of
common stock we are offering through this prospectus. This number includes
shares issuable upon exercise of both the vested and unvested warrants. This
number does not include any shares of common stock which the selling
stockholders have previously sold pursuant to the prospectus.
The fourth column assumes the sale of all of the shares offered by each
selling stockholder.
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Under the Certificate of Designations for the Series B preferred stock,
no holder can convert its shares of Series B preferred stock in excess of that
number of shares which, upon giving effect to the conversion, would result in
that holder and its affiliates beneficially owning more than 4.99% of the
outstanding shares of our common stock. This determination excludes shares of
common stock issuable upon conversion of shares of Series B preferred stock
which the holder has not yet converted. We do not account for this limitation in
the table below. We obtained the information provided in the table below from
the selling stockholders. The selling stockholders may sell all, some or none of
their shares in this offering. See "Plan of Distribution."
We previously registered 1,600,000 shares of common stock on Form S-3
(file number 333-81219), filed with the SEC on June 21, 1999 and declared
effective on July 9, 1999. As of January 25, 2000 the selling stockholders have
sold 1,589,042 of the 1,600,000 shares registered. Due to a decrease in the
market price of the common stock, the registration rights agreement requires us
to register an additional 4,679,562 shares of common stock of which, as of April
19, 2000, 250,255 shares had been sold pursuant to the prospectus. In accordance
with Rule 429 of Regulation C of the Securities Act of 1933, we are presenting a
combined prospectus.
<TABLE>
<CAPTION>
Shares of Common Shares of
Preferred Shares Stock Beneficially Common Stock Common
Owned Prior Owned on Offered Pursuant Shares Owned
Name to Offering April 19, 2000 to this Prospectus After Offering
---- ---------------- ------------------ ------------------ --------------
<S> <C> <C> <C> <C>
HFTP Investment L.L.C. (1) 48 528,392 537,992 0
Leonardo, L.P. (2) 49 518,524 528,324 0
GAM Arbitrage Investments, Inc. (2) 7 73,932 75,332 0
AG Super Fund International Partners
L.P. (2) 7 73,932 75,332 0
Raphael, L.P. (2) 9 95,198 96,998 0
Ramius Fund, Ltd. (3) 18 190,397 193,997 0
--- --------- --------- -
TOTAL 138 1,480,375 1,507,975 0
</TABLE>
(1) Promethean Investment Group, LLC, a New York limited liability
company, serves as investment advisor to HFTP Investment, L.L.C. and may be
deemed to share beneficial ownership of the shares beneficially owned by HFTP by
reason of shared power to vote and to dispose of the shares beneficially owned
by HFTP. Promethean disclaims beneficial ownership of the shares beneficially
owned by HFTP. Mr. James F. O'Brien, Jr. indirectly controls Promethean. Mr.
O'Brien disclaims beneficial ownership of the shares beneficially owned by
Promethean and HFTP. The shares of common stock shown as beneficially owned on
April 19, 2000 include 51,600 shares of Common Stock issuable upon exercise of
the warrants that were vested as of April 19, 2000. The remaining 9,600 warrants
do not vest within 60 days of April 19, 2000.
(2) Angelo, Gordon & Co., L.P. is a general partner of AG Super Fund
International Partners, L.P., Leonardo, L.P. and Raphael, L.P., and is the
investment advisor of GAM Arbitrage Investment, Inc. and consequently has voting
control and investment discretion over securities held by the entities
controlled by Angelo Gordon. The ownership information for each of the Angelo
Gordon entities does not include the ownership information for the other Angelo
Gordon entities. Angelo Gordon and each of the entities controlled by it
disclaim beneficial ownership of the shares held by the other Angelo Gordon
entities. Mr. John M. Angelo, the Chief Executive Officer of Angelo Gordon, and
Mr. Michael L. Gordon, the Chief Operating Officer of Angelo Gordon, are the
sole general partners of A.G. Partners, L.P., the sole general partner of Angelo
Gordon. As a result, Mr. Angelo and Mr. Gordon may be considered beneficial
owners
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of any shares deemed to be beneficially owned by Angelo Gordon. The shares of
common stock shown as beneficially owned on April 19, 2000 include 46,400 shares
of common stock issuable upon exercise of the warrants that were vested as of
April 19, 2000. The remaining 14,400 warrants do not vest within 60 days of
April 19, 2000.
(3) AG Ramius Partners, LLC is the investment advisor to Ramius Fund,
Ltd., and consequently has voting control and investment discretion over
securities held by Ramius Fund. AG Ramius disclaims beneficial ownership of the
shares held by Ramius Fund. Mr. John M. Angelo and Mr. Michael Gordon are sole
general partners of AG Partners, L.P., the sole general partner of Angelo Gordon
(which is the investment managing member of AG Ramius). As a result, Mr. Angelo
and Mr. Gordon may be considered beneficial owners of any shares deemed to be
beneficially owned by AG Ramius. The shares of common stock shown as
beneficially owned on April 19, 2000 include 11,600 shares of common stock
issuable upon exercise of the warrants that were vested as of April 19, 2000.
The remaining 3,600 warrants do not vest within 60 days of April 19, 2000.
This Prospectus Supplement is dated April 20, 2000
