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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1998
REGISTRATION NO. 333-51437
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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POST-EFFECTIVE AMENDMENT NO. 2
ON
FORM S-3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VISION TWENTY-ONE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 59-3384581
(State or other jurisdiction (IRS Employer
of Identification No.)
Incorporation or
organization)
</TABLE>
<TABLE>
<S> <C>
THEODORE N. GILLETTE, PRESIDENT AND CEO
VISION TWENTY-ONE INC. VISION TWENTY ONE, INC.
7360 BRYAN DAIRY ROAD 7360 BRYAN DAIRY ROAD
SUITE 200 SUITE 200
LARGO, FL 33777 LARGO, FL 33777
(727) 545-4300 (727) 545-4300
(Address, including zip code, and telephone (Name, address, including zip code, and
number, including telephone number,
area code, of registrant's principal executive including area code, of agent for service)
offices)
</TABLE>
WITH COPIES TO:
DARRELL C. SMITH, ESQUIRE
MARK A. CATCHUR, ESQUIRE
SHUMAKER, LOOP & KENDRICK, LLP
101 E. KENNEDY BLVD., SUITE 2800
TAMPA, FLORIDA 33602
(813) 229-7600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
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, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
554,900 SHARES
VISION TWENTY-ONE
COMMON STOCK
This Prospectus relates to up to 554,900 shares of Common Stock, par value
$.001 per share ("Common Stock") of Vision Twenty-One, Inc. (together with its
subsidiaries as applicable, the "Company"), which are being offered and sold by
Martin F. Stein, a director of the Company and certain other stockholders of the
Company described herein, (the "Selling Stockholders"). The Selling Stockholders
acquired the Common Stock in connection with the Company's acquisition of
EyeCare One Corp. ("EyeCare One") and Vision Insurance Plan of America, Inc.
("VIPA") in March 1998. See "Selling Stockholders."
The Common Stock is included in The Nasdaq Stock Market's National Market
(the "Nasdaq National Market") under the symbol "EYES." On December 11, 1998,
the last reported sales price for the Common Stock on the Nasdaq National Market
was $3.9375 per share.
See "RISK FACTORS" beginning on page 4 for a discussion of certain material
factors that should be considered in connection with an investment in the Common
Stock offered hereby.
The Common Stock may be sold by the Selling Stockholders from time to time
directly to purchasers or through agents, underwriters or dealers. See "Plan of
Distribution." If required, the names of any such agents or underwriters
involved in the sale of the Common Stock in respect of which this Prospectus is
being delivered and the applicable agent's commission or underwriter's discount,
if any, will be set forth in an accompanying supplement to this Prospectus (the
"Prospectus Supplement").
The Selling Stockholders will receive all of the net proceeds from the sale
of the Common Stock pursuant to this Prospectus and will pay all underwriting
discounts and selling commissions, if any, applicable to the sale of the Common
Stock. The Company is paying all other expenses incident to the registration of
the securities registered hereunder.
The Selling Stockholders and any broker-dealers, agents or underwriters
which participate in the distribution of the Common Stock may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the "Securities
Act"), and any commission received by them, or purchases by them of the Common
Stock at a price less than prevailing market price, may be deemed to be
underwriting commissions or discounts under the Securities Act. All sales of
Common Stock registered hereby shall be sold in connection with this Prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER 14, 1998
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AVAILABLE INFORMATION
The Company has filed a Registration Statement (the "Registration
Statement") on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission") with respect to the Common Stock offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement
which the Company has filed with the Commission, certain portions of which have
been omitted pursuant to the rules and regulations of the Commission, and to
which portions reference is hereby made for further information with respect to
the Company and the Common Stock offered hereby. Statements contained herein
concerning certain documents are not necessarily complete, and in each instance,
reference is made to the copies of such documents filed as exhibits to the
Registration Statement. Each such statement is qualified in its entirety by such
reference.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files periodic reports, proxy statements and other information with
the Commission relating to its business, financial statements and other matters.
The Registration Statement, as well as such reports, proxy statements and other
information, may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. and should be available for
inspection and copying at the regional offices of the Commission located at 7
World Trade Center, Suite 1300, New York, New York 10048 and at Citicorp Center,
500 West Madison Street, Chicago, Illinois. Copies of such material can be
obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a Web site that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
The address of such site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents, all of which were previously filed by the Company with the
Commission:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
2. The Company's Definitive Proxy Statement relating to the Annual
Meeting of Shareholders held on June 8, 1998.
3. The Company's quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
4. The Company's Form 8-K dated April 14, 1998 relating to the
Company's acquisition of EyeCare One Corp. ("EyeCare One") and Vision
Insurance Plan of America, Inc. ("VIPA"), and related Form 8-K/A dated June
5, 1998.
5. The Company's Form 8-K dated June 10, 1998 relating to the
Company's new credit facilities and the Company's announcement of its
letter of intent to acquire Vision World.
6. The Company's Form 8-K dated August 10, 1998 as amended on Form
8-K/A dated October 13, 1998, relating to the Company's acquisition of
Vision World.
7. The Company's Form 8-K dated August 19, 1998 relating to the
Company's financial statements as restated to reflect the pooling of
interest acquisition of EyeCare One and VIPA.
8. The Company's Form 8-K dated November 12, 1998 relating to certain
press releases of the Company and the Financial Statements of EyeCare One
and VIPA.
9. The description of securities to be registered contained in the
Registration Statement filed with the Commission on the Company's Form 8-A
under the Exchange Act.
Additionally, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of the offering made hereby shall be deemed to be incorporated by reference into
this Prospectus. Any statement contained in a previously filed document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
modifies or replaces such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or replaced, to constitute
a part of this Prospectus.
The Company undertakes to provide without charge to any person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents which have been or may be
incorporated by reference into this Prospectus, other than exhibits to such
documents. Written or oral requests for such copies should be directed to
Richard T. Welch, Chief Financial Officer and Treasurer, at the executive
offices of the Company, which are located at 7360 Bryan Dairy Road, Suite 200,
Largo, Florida 33777 (telephone (727) 545-4300).
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, incorporated by reference or included
elsewhere in this Prospectus and information under "Risk Factors." Unless the
context otherwise requires, references in this Prospectus to the Company or
Vision Twenty-One include Vision Twenty-One, Inc., its predecessors and its
subsidiaries. As used herein, the term "Managed Providers" refers to the
licensed optometrists and ophthalmologists employed by professional associations
and providing eye care services at Company clinic facilities and ambulatory
surgical centers ("ASCs"); "Managed Professional Associations" refers to the
professional associations which are managed by the Company pursuant to long-term
management agreements ("Management Agreements"); "Contract Providers" refers to
the licensed optometrists and ophthalmologists who are credentialed, or in the
process of being credentialed, to provide eye care services at optometry and
ophthalmology clinics and ASCs pursuant to the Company's managed care contracts;
and "Affiliated Providers" refers collectively to the Managed Providers and the
Contract Providers.
THE COMPANY
The Company provides a wide range of management and administrative services
to local area delivery systems ("LADS(SM)") established by the Company. LADS are
developed to provide for integrated networks of optometrists, ophthalmologists,
ASCs and retail optical centers which offer the full continuum of eye care
services in local markets. The Company began operations in 1984, providing
management services to seven optometrists practicing at eight clinic locations.
The Company currently provides its services to LADS located throughout the
United States through which its Affiliated Providers deliver eye care services.
The Affiliated Providers consist of Managed Providers and Contract Providers.
The Company's Affiliated Providers, in conjunction with select national retail
optical chains, deliver eye care services under the Company's managed care
contracts and discount fee-for-service plans covering the Company's exclusively
contracted patient lives.
The Company's goal is to enable each of its LADS to capture the leading
market share of fee-for-service patients and managed care members. To achieve
its goal, the Company is focused on the following strategies: (i) developing
LADS in order to provide for a complete continuum of easily accessible, high
quality and affordable eye care services, (ii) increasing revenues and
profitability in each LADS through practice development and managed care
initiatives and (iii) expanding into select new markets to create regional
networks of LADS.
The Company earns practice management fees by providing Managed Providers
with a wide range of management and administrative services. These management
and administrative services permit the Managed Provider to concentrate on the
delivery of easily accessible, high quality and affordable eye care services.
The Company also earns revenues by entering into capitated managed care
contracts with third-party insurers and payors and by administering indemnity
fee-for-service plans for its Affiliated Providers.
The principal executive office of the Company is located at 7360 Bryan
Dairy Road, Suite 200, Largo, Florida 33777, and its telephone number is (727)
545-4300.
THE SELLING STOCKHOLDERS
This Prospectus relates to up to 554,900 shares of Common Stock of the
Company that are being offered and sold by certain stockholders of the Company
(the "Selling Stockholders"). The Selling Stockholders acquired the Common Stock
in connection with the Company's acquisition of EyeCare One Corp. ("EyeCare
One") and Vision Insurance Plan of America, Inc. ("VIPA") in March 1998. See
"EyeCare One Acquisition" and "Selling Shareholders."
RISK FACTORS
You should consider the material risk factors involved in connection with
an investment in the Common Stock and the impact to you from various events
which could adversely affect the Company's business. See "Risk Factors."
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RISK FACTORS
An investment in the shares of Common Stock offered hereby involves a high
degree of risk. You should be able to bear a complete loss of your investment.
You should carefully consider the factors that may affect forward looking
statements made by the Company as well as the risk factors, in addition to the
other information set forth in this Prospectus and the documents incorporated
herein by reference, in connection with an investment in the Common Stock
offered hereby. This Prospectus and certain information provided periodically in
writing and orally by the Company's designated officers and agents contain
and/or incorporate by reference certain statements which constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words
"expect," "believe," "goal," "plan," "intend," "estimate," and similar
expressions and variations thereof are intended to specifically identify
forward-looking statements. Those statements appear in this Prospectus and the
documents incorporated herein by reference, particularly "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things;
(i) the financial prospects of the Company;
(ii) potential acquisitions by the Company and the successful
integration of both completed and future acquisitions;
(iii) the ability of the Company to efficiently and effectively manage
its Managed Providers;
(iv) the Company's financing plans including the Company's ability to
obtain additional debt or raise equity capital;
(v) trends affecting the Company's financial condition or results of
operations including the company's stock price and its potential
impact on the number of shares utilized in acquisitions and on
future earnings per share;
(vi) the Company's growth strategy and operating strategy including the
shift in focus to internal growth and opening new de novo clinics
and surgery centers, expanding managed care initiatives and
expanding refractive surgery program;
(vii) the impact of current and future governmental regulations;
(viii) the Company's current and future managed care contracts and the
impact thereof on gross profit;
(ix) the Company's ability to continue to recruit Contract Providers, to
convert Contract Providers to Managed Providers, and to maintain
its relationships with Affiliated Providers;
(x) the Company's relationships with affiliated retail optical
companies;
(xi) the Company's contemplated sale of the Buying Group Division and
the impact thereof on the Company's revenues and earnings;
(xii) the Company's ability to operate efficiently, profitably and
effectively its managed care business;
(xiii) the Company's revenue run rate and the expected impact thereon of
acquisitions by the Company;
(xiv) the Company's integration of systems and implementation of cost
savings and reduction plans;
(xv) the future LADS overall operating margins and
(xvi) the Company's year 2000 readiness and the readiness of third
parties.
Prospective investors are cautioned that any such forward looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the forward
looking statements as a result of various factors.
The factors that might cause such differences include, among others, the
following:
(i) the Company experiencing future operating and net losses;
(ii) any material inability of the Company to successfully integrate and
profitably operate its acquisitions or to successfully open
integrate and profitably operate de novo clinics and surgery
centers;
(iii) any material inability of the Company to identify, consummate and
integrate suitable acquisitions in conjunction with its growth
strategy or to ultimately close pending and identified acquisitions
or to achieve internal growth in its business;
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(iv) any material inability of the Company to acquire sufficient capital
and financing at a reasonable cost or to maintain its credit
facility to fund its growth strategy;
(v) the inability of the Company to expand its managed care business,
renew existing managed care contracts and maintain and expand its
Contract Provider Network;
(vi) the Company's inability to negotiate managed care contracts with
HMOs;
(vii) the inability of the Company to successfully and profitably operate
its managed care business or for existing managed care contracts to
positively impact gross profit;
(viii) the managed practices' inability to operate profitably;
(ix) changes in state and/or federal governmental regulations which
could materially affect the Company's ability to operate or
materially affect the Company's profitability;
(x) the inability of the Company to maintain or obtain required
licensure in the states in which it operates and in the states in
which it may seek to operate in the future,
(xi) the inability of the Company to successfully obtain public and/or
private investment capital to expand its operations;
(xii) the Company's inability to meet its financing covenants and
commitments;
(xiii) consolidation of the Company's competitors, poor operating results
by its competitors, or adverse governmental or judicial rulings
against its competitors;
(xiv) any failure by the Company to meet analysts expectations;
(xv) the Company's stock price;
(xvi) any adverse change in the Company's medical claims to managed care
revenue ratio;
(xvii) the effect of any future stock overhang in the market place (where
the available stock for sale would be in excess of demand) and any
negative impact on stock price related thereto;
(xviii) the requirement under the Company's current credit facility that
the Company must utilize its stock as a significant portion of its
consideration in acquisitions.
(xix) as a result of the Company's determination to concentrate on
internal growth and to slow down its acquisition pace, any material
failure to achieve internal growth necessary to achieve overall
Company growth projected by analysts.
(xx) the inability of the Company to realize any significant benefits
from cost savings or achieve cost reductions;
(xxi) the non-compliance or readiness of the Company or third parties
with respect to year "2000" issues;
(xxii) the inability of the Company to consummate the sale of the Buying
Group Division or for any such sale to positively impact earnings;
(xxiii) the inability of the Company to increase and expand its refractive
surgery programs;
(xxiv) unexpected cost increases, and
(xxv) a slow down in demand for refractive surgeries and other factors
including those identified in the Company's filings from time to
time with the SEC.
The Company undertakes no obligation to publicly update or revise forward
looking statements to reflect events or circumstances after the date of this
Prospectus or to reflect the occurrence of unanticipated events.
LIMITED OPERATING PROFITABILITY. Although the Company has recently
operated profitably, the same has been for a short period of time and there can
be no assurance that the Company will not incur operating and net losses or
continue to achieve continued profitability in the future. Although the Company
has experienced substantial revenue growth, the Company incurred operating and
net losses in the past four years.
RISKS ASSOCIATED WITH EXPANSION STRATEGY. A significant portion of the
Company's expansion strategy is to maximize internal growth opportunities
through (i) de novo openings of clinics and surgery centers, (ii) expansion of
the refractive surgery business and (iii) expansion of the managed care
business, and to grow its Managed Provider network through selected acquisitions
of certain assets of ophthalmology and optometry practices, Ambulatory Surgical
Centers ("ASCs") and related businesses. The Company from time to time reviews
and will continue to review acquisition opportunities (some of which may be
material to the
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Company) that will further broaden its LADS or geographic presence, however, the
current focus of the Company is primarily on internal growth opportunities. The
Company's expansion strategy places significant demands on the Company's
resources and there can be no assurance that the Company's management and
operational systems and structure can be expanded to effectively support the
Company's expansion strategy. The success of the Company's expansion strategy
will depend on factors which include the following:
The Company's Stock Price. The Company expects to continue to use its
Common Stock as consideration for future acquisitions in conjunction with
its expansion strategy, which will be a factor in the Company's future
acquisitions, financial position and performance. The ability of the
Company to use its Common Stock or the number of shares of Common Stock the
Company is ultimately required to provide in connection with its
acquisitions can be affected by the market price for its Common Stock. The
number of any such shares provided will affect the Company's future
earnings per share.
Ability to Identify and Consummate Suitable Acquisitions. The
identification, negotiation and consummation of select appropriate
acquisitions can require the allocation of substantial resources by the
Company. The Company may compete for acquisition opportunities with
entities that have greater resources than the Company. There can be no
assurance that suitable acquisition candidates are available or can be
identified or that acquisitions can be consummated on terms favorable to
the Company.
Demand for Refractive Surgeries. As part of its expansion strategy,
the Company expects to focus on internal growth opportunities which
includes the expansion of de novo surgery centers and an emphasis on
refractive surgeries to take advantage of the recently increased demand for
refractive surgery. There can be no assurance, however, that the Company's
expansion of de novo surgery centers will be successful or that the demand
for refractive or other surgeries will continue to increase, or not decline
in the future and thereby adversely affect the Company's business and
results of operation.
Addition of De Novo Clinics. As part of its expansion strategy, the
Company also expects to add de novo clinics in strategic locations. The
identification, establishment and operation of such de novo clinics will
require substantial resources. There can be no assurances that the company
will be able to identify suitable locations for the addition of de novo
clinics or that the Company will have the resources to establish de novo
clinics and, if established, operate them profitably.
Integration of Acquisitions and De Novo Clinics and Surgery
Centers. The Company has made significant acquisitions in the past year
and expects to add de novo clinics and surgery centers, in the future. In
the past twelve months, the size of its Contract Provider network, the
number and size of its managed care contracts and related covered lives and
the number of clinics and ASCs managed by the Company have increased
significantly. The Company's financial results in fiscal quarters
immediately following a material acquisition or series of acquisitions or
the addition of de novo clinics or surgery centers may be adversely
impacted while the Company attempts to integrate the de novo clinics,
surgery centers or acquisitions. There can be no assurance that there will
not be substantial unanticipated costs or problems associated with the
integration effort relates to the addition of de novo clinics and surgery
centers and acquisitions. During the first few months after an acquisition,
the Company's expenses related thereto may exceed the revenue it realizes
from the acquisition and, accordingly, any such acquisition may have a
negative effect on the Company's short-term operating results. As the
Company pursues its expansion strategy, there can be no assurance that the
Company will be able to continue to successfully integrate acquisitions and
new de novo clinics and any failure or inability to do so may have a
material adverse effect on the Company's results of operations or financial
condition. In addition, expansion requires the Company to attract and
retain competent and experienced management personnel and require the
integration of reporting and tracking systems, management information
systems and other operating systems. There can be no assurance that the
Company will be able to successfully integrate its management information
systems in the near future. There can also be no assurance that the Company
will be able to attract suitable management or other personnel or
effectively expand, its operating systems. The success of the Company's
expansion strategy will depend on the Company's ability to effectively
manage an increasing number of new clinics and surgery centers as well as
select acquisitions while continuing to manage its existing business. There
can be no assurances that the Company will be able to
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extract any cost savings or achieve cost reductions through the integration
and operation of its business. Unanticipated costs associated with expanded
operations could offset or exceed any realized cost reductions or
anticipated cost savings. Additionally, there can be no assurances that the
Company will be able to achieve cost reductions, synergies, and efficiences
as a result of its expansion strategies. In certain acquisitions where the
practice does not, after closing, obtain employment agreements with its
professionals due to its negotiations with the Company, the Company has a
risk that the practice it manages could lose a significant portion of its
income in the event such professionals terminate their affiliations with
the practice. There can be no assurances that the Company's shift from a
focus on acquisitions to internal growth opportunities will result in
overall Company growth as provided by analysts.
Availability of Funds for Expansion Strategy. The Company's expansion
strategy will require that substantial capital investment and adequate
financing be available to the Company. Capital is needed not only for
acquisitions, but also for internal growth through the addition of de novo
clinics and surgery centers and the integration of operations and the
addition of equipment and technology. The Company has borrowed under its
current bank credit facility for use in funding certain acquisitions and
for general working capital purposes. In the future, the Company may be
required to obtain additional financing through other borrowings or the
issuance of additional equity or debt securities to finance its growth and
acquisition strategies, which could have an adverse effect on the value of
the shares of the Company's Common Stock. There can be no assurance that
the Company will be able to obtain such financing or that, if available,
such financing will be on terms acceptable to the Company. An inability of
the Company to obtain suitable additional future financing could cause the
Company to substantially change its expansion strategy, which could have a
material adverse effect on the Company.
Managed Care Contract Expansion. The success of the Company's
expansion strategy also will be dependent on its ability to maintain and
expand its managed care contract relationships with HMOs and other third
party payors. The ability of the Company to maintain and expand its
Contract Provider network and retail affiliations will be important in
expanding these contractual relationships with both existing and new
payors. Correspondingly, expanding managed care contract relationships will
be important in maintaining and expanding its Contract Provider network and
retail affiliations. Additionally, the ability to engage in acquisitions
that add to the Company's Managed Provider network will be dependent upon
the Company's ability to expand its managed care contract relationships.
Risks Associated with Merger Transactions. Several of the Company's
acquisitions have been accomplished by way of merger. As a result of such
merger transactions, there could be potential liabilities to which the
Company could be subject. The agreements entered into in connection with
the acquisitions provide for the Company to be fully indemnified against
any losses incurred by the Company as a result of certain material
liabilities. However, while the Company is not aware of any such
liabilities, there can be no assurance that the Company will not incur
losses in the event that the indemnifications are inadequate to reimburse
the Company for any such losses.
Information Systems. The Company is currently in the process of
completing the implementation of its new accounting management information
systems at each of the Company's business units. The Company expects these
accounting information systems to provide management with timely consistent
access to financial and operational data occurring in all of its business
units, however there can be no assurance that such accounting systems will
be implemented on a timely basis or once implemented operate effectively.
RELIANCE ON AFFILIATED PROVIDERS. The Company's revenue depends on revenue
generated by the Affiliated Providers. There can be no assurance that the
practices managed by the Company will continue to maintain successful practices,
that the Management Agreements between the Company and such professional
associations will not be terminated or that the Managed Providers will continue
to be employed by the professional associations. Under the Management
Agreements, the Company has agreed with the professional associations that,
subject to certain exceptions, it will not provide management services for any
practice located within five miles of such professional associations without
first obtaining the express written consent of the professional associations.
The Company's ability to expand the managed care business will be dependent
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upon the Company's ability to recruit and maintain an expanded Contract Provider
network as well as to market such network successfully to payors. The inability
to effectively expand the network and contractual relationships with payors
would have a material adverse effect on the Company's growth strategy.
Additionally, the practice management fees earned by the Company pursuant to
substantially all of its Management Agreements will fluctuate depending on
variances in revenues and expenses of the Managed Professional Association and
thus the Company's revenue and profitability in connection with its Management
Agreements will be directly and adversely affected by poor operating results of
its Managed Professional Associations.
RISKS ASSOCIATED WITH MANAGED CARE CONTRACTS AND CAPITATED FEE
ARRANGEMENTS. Effective October 31, 1997, the Company acquired all of the
issued and outstanding stock of BBG-COA, Inc. ("the "Block Acquisition"),
including its principal wholly-owned subsidiary, Block Vision, Inc. ("Block
Vision"). As a result of the Block Acquisition and other managed care contracts,
the Company's managed care business has increased significantly. Additionally,
as an increasing percentage of the population is covered by managed care
organizations, the Company believes that its success will be, in part, dependent
upon its ability to negotiate managed care contracts with HMOs, health insurance
companies and other third party payors pursuant to which services will be
provided on a risk sharing or capitated basis. Additionally, a significant
portion of the Company's managed care business is pursuant to a small percentage
of its contracts and the loss of any one of those could have an adverse effect
on the Company's results of operations. Most of the Company's managed care
contracts are for one year terms which automatically renew and the contracts are
terminable by either party on sixty days notice. Under some of these contracts,
the health care provider may accept a pre-determined amount per month per
patient in exchange for providing all necessary covered services to the patients
covered under the agreement. These contracts pass much of the risk of providing
care from the payor to the provider. The proliferation of these contracts in
markets served by the Company could result in greater predictability of revenue,
but less certainty with respect to profitability. There can be no assurance,
however, that the Company will be able to negotiate satisfactory arrangements on
a risk-sharing or capitated basis. In addition, to the extent that patients or
enrollees covered by these contracts require, in the aggregate, more frequent or
extensive care than is anticipated, operating margins may be reduced or the
revenue derived from these contracts may be insufficient to cover the costs of
the services provided. Any such developments could have a material adverse
effect on the Company's results of operations or financial condition.
RISKS ASSOCIATED WITH BLOCK VISION'S BUYING GROUP. As a result of the
Block Acquisition, the Company provides billing and collection services to
suppliers of optical products benefiting suppliers and buyers of eye care
products. The Company has announced its intention to sell the buying group
division. Should the Company be unable to sell the buying group division, the
ongoing operation of such division imposes substantial risks on the Company. The
Company's buying group business arrangements are terminable at any time by Block
Vision or its customers. Any loss of a significant number of customers in
connection with this business could have a material adverse effect on the
results of operations of the Company. In connection with its buying group
services, Block Vision bears substantial credit risk, which if not managed
successfully could have a material adverse effect on the Company, its cash flows
and results of operations. In addition, the operations of the buying group may
be subject to certain federal laws, including anti-kickback laws. A
determination that the buying group operations are in violation of such laws
could have a material adverse effect on the results of operations of the buying
group division. The Company's inability to consummate a sale of the buying group
division and thereby utilize the cash proceeds expect to be received therefrom
could adversely affect future business prospects of the Company.
GOVERNMENT REGULATIONS. Business arrangements between business
associations that provide practice management services and ophthalmologists and
optometrists are regulated extensively at the state and federal levels,
including regulation in the following areas:
Corporate Practice of Optometry and Ophthalmology. The laws of many
states prohibit corporations that are not owned entirely by eye care
professionals from employing eye care professionals, having control over
clinical decision-making, or engaging in other activities that are deemed
to constitute the practice of optometry and ophthalmology. The Company
contracts with professional associations (which are owned by one or more
licensed optometrists or ophthalmologists), which in turn employ or
contract with licensed optometrists or ophthalmologists to provide
professional services. The Company performs
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only non-professional services, is not representing to the public or its
customers that it provides professional eye care services, and is not
exercising influence or control over the practices of the eye care
practitioners employed by the professional associations. Furthermore, the
Management Agreements between the Company and the Managed Professional
Associations specifically provide that all decisions required by law to be
made by professionals shall be made by such professionals. While certain
shareholders of Managed Professional Associations that perform the practice
of medicine or optometry are also involved in Company management, they act
independently when making decisions on behalf of their professional
corporations and the Company has no right (and does not attempt to exercise
any right) to control those decisions.
Fee-Splitting and Anti-kickback Laws
State Law. Most states have laws prohibiting paying or receiving any
remuneration, direct or indirect, that is intended to induce referrals for
health care products or services. Many states also prohibit "fee-splitting"
by eye care professionals with any party except other eye care
professionals in the same professional corporation or practice association.
In most cases, these laws apply to the paying of a fee to another person
for referring a patient or otherwise generating business, and do not
prohibit payment of reasonable compensation for facilities and services
(other than the generation of business), even if the payment is based on a
percentage of the practice's revenues.
The Florida fee-splitting law prohibits paying or receiving any
commission, bonus, kickback, or rebate, or engaging in any split-fee
arrangement in any form for patient referrals or patronage. According to a
Florida court of appeals decision interpreting this law, it does not
prohibit a management fee that is based on a percentage of gross income of
a professional practice. However, the Florida Board of Medicine recently
issued an order determining that a management fee charged by a publicly
held national management company based upon a percentage of revenue
constitutes illegal fee-splitting. The case before the Board involved
arrangements that are different from the Company's arrangements in certain
respects, including the fact the management fee was based on a percentage
of the increase in net revenues of the practice after the management
arrangement commenced. The ruling is limited to the facts presented to the
Board. The Board's statement of the rationale for its opinion is unclear as
to whether it would also apply to arrangements similar to those utilized by
the Company. The Board of Medicine's order has been stayed to permit an
appeal to a Florida district court of appeals. The appellate court could
reverse or affirm the Board's opinion, or clarify that it is correct only
in limited situations. If the Board's order is allowed to stand without
clarification, there is a risk that the Company's arrangements with
physicians in the State of Florida could be determined to be in violation
of the fee-splitting statute. Since the same statute applies to
optometrists, a risk would also exist as to the Company's arrangements with
them. The Company's Management Agreements provide that if they are
determined in the future to violate any law, the parties agree to use their
best efforts to modify the arrangement to approximate as closely as
possible, consistent with law, the economic position of the parties prior
to the modification and, if they are unable to reach agreement on a new
arrangement, to submit the matter to arbitration for the purpose of
reaching an equitable alternative arrangement. In the event the form of
Management Agreement utilized by the Company in Florida is ever determined
to be in violation of state law, and the parties or the arbitrator are
unable to arrive at a satisfactory modification to the Management
Agreement, there could be a material adverse impact on the Company's
current Florida Management Agreements and therefore, the Company's results
of operations.
An Arizona law prohibits "dividing a professional fee" only if it is
done "for patient referrals," similar to the language of the Florida law.
Other states, such as Illinois and New York, have fee-splitting statutes
that have been interpreted to prohibit any compensation arrangements that
are based on a percentage of a physician's revenue, and such laws shall
preclude the Company from using its typical management arrangements at such
time as Managed Provider relationships are created in those states.
Federal Law. Federal law prohibits the offer, payment, solicitation
or receipt of any form of remuneration in return for the referral of
patients covered by federally funded health care programs such as Medicare
and Medicaid, or in return for purchasing, leasing, ordering or arranging
for the purchase,
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lease or order of any product or service that is covered by a federal
program. For this reason, the Management Agreement provides that the
Company will not engage in direct marketing to potential sources of
business, but will only assist the practice's personnel in these endeavors
by providing training, marketing materials and technical assistance. On
April 15, 1998 the Office of Inspector General of the U.S. Department of
Health and Human Services ("OIG") issued Advisory Opinion 98-4, which
raised questions about whether a percentage of revenue management fee
arrangement could be viewed as violating the federal anti-kickback law if
the manager is involved in helping generate revenues derived from Medicare
and Medicaid programs. Under the arrangement reviewed by the OIG, the
manager's duties included management and marketing services, negotiation
and oversight of health care contracts with various payors, including
Federal health care programs, and setting up provider networks that
included the physician. Payments to the management company included a "fair
market value payment" for operating services provided by the manager, a
payment based on a percentage of the cost of capital assets, and an
additional 20% of net revenues of the practice for management services. The
OIG noted that since the manager was paid a percentage of net revenue,
including revenue from business derived from managed care contracts
arranged by the manager, that a potential technical violation of the anti-
kickback statute existed. The OIG further noted that since the manager
would presumably receive some compensation for management efforts in
connection with the development and operation of specialist networks, any
evaluation by the OIG would require information about the relevant
financial relationships. The OIG summarized that while the management
arrangement "may" violate the anti-kickback statute, a definitive
conclusion would require a determination of the parties' intent, which is
beyond the scope of the advisory opinion process.
The Company's Management Agreements under which the Company operates
are factually distinct from the arrangements reviewed by the OIG in its
opinion. Therefore, management believes the opinion to be inapplicable
relative to the relationships with its Managed Providers. As a result,
management will not change the terms of these relationships, but will
continue to monitor any clarifications or determinations in this area. The
Company's Management Agreements provide that if they are determined in the
future to violate any law, the parties agree to use their best efforts to
modify the arrangement to approximate as closely as possible, consistent
with law, the economic position of the parties prior to the modification
and, if they are unable to reach agreement on a new arrangement, to submit
the matter to arbitration for the purpose of reaching an equitable
alternative arrangement, however, in the event the form of Management
Agreement utilized by the Company is ever determined to be in violation of
the federal anti-kickback statute, it is likely that there would be a
material adverse impact on the Company and its results of operation.
Advertising Restrictions. Many states prohibit eye care professionals
from using advertising which includes any name other than their own, from
advertising in any manner that is likely to lead a person to believe that a
non eye care professional is engaged in the delivery of eye care services.
The Management Agreement provides that all advertising shall conform to
these requirements.
In addition, the Company's managed care arrangements with health care
service payors on the one hand, and its network of Affiliated Providers on the
other, are subject to federal and state regulations, including the following:
Insurance Licensure. Most states impose strict licensure requirements
on health insurance companies, HMOs, and other companies that engage in the
business of insurance. In most states, these laws do not apply to
discounted fee-for-service arrangements or networks that are paid on a
"capitated" basis, i.e. based on the number of covered persons the network
is required to serve without regard to the cost of service actually
rendered, unless the association with which the network provider is
contracting is not a licensed health insurer or HMO. There are exceptions
to these rules in some states. For example, certain states require a
license for a capitated arrangement with any party unless the risk-bearing
association is a professional corporation that employs the eye care
professionals. In the event that the Company is required to become licensed
under these laws, the licensure process can be lengthy and time consuming
and, unless the regulatory authority permits the Company to continue to
operate while the licensure process is progressing, the Company could
experience a material adverse change in its business while the
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licensure process is pending. In addition, many of the licensing
requirements mandate strict financial and other requirements which the
Company may not immediately be able to meet. Once licensed, the Company
would be subject to continuing oversight by and reporting to the respective
regulatory agency.
Limited Health Service Plans and Third Party Administration
Licensing. Some states permit managed care networks that assume insurance
risk, but only as to a limited class of health services, to be licensed as
limited health service plans, and thereby avoid the need to be licensed as
an insurer or HMO even if its arrangements are with individual subscribers
or self-insured employers. Additionally, some states require licensing for
companies providing administrative services in connection with managed care
business. The Company intends to seek such licenses in those states where
it is available for eye care networks. However, the Company may not be able
to meet such requirements in all cases and should this result in the loss
of any material business (individually or in the aggregate) it could have a
material adverse effect on the Company's business and operating results.
Physician Incentive Plans. Medicare regulations impose certain
disclosure requirements on managed care networks that compensate providers
in a manner that is related to the volume of services provided to Medicare
patients (other than services personally provided by the provider). If such
incentive payments exceed 25 percent of the provider's potential payments,
the network is also required to show that the providers have certain "stop
loss" financial projections and to conduct certain Medicare enrollee
surveys.
"Any Willing Provider" Laws. Some states have adopted, and others are
considering, legislation that requires managed care networks to include any
provider who is willing to abide by the terms of the network's contracts
and/or prohibit termination of providers without cause. Such laws would
limit the ability of the Company to develop effective managed care networks
in such states.
The Company and its affiliated professional associations are subject to a
range of antitrust laws that prohibit anti-competitive conduct, including price
fixing, concerted refusals to deal and divisions of markets. Among other things,
these laws limit the ability of the Company to enter into Management Agreements
with separate practice groups that compete with one another in the same
geographic market. This does not apply to professionals within the same practice
group. In addition, these laws prevent acquisitions of business assets that
would be integrated into existing professional associations if such acquisitions
substantially lessen competition or tend to create a monopoly.
The several laws described above have civil and criminal penalties and have
been subject to limited judicial and regulatory interpretation. They are
enforced by regulatory agencies that are vested with broad discretion in
interpreting their meaning. The Company's agreements and activities have not
been examined by federal or state authorities under these laws and regulations.
For these reasons, there can be no assurance that review of the Company's
business arrangements will not result in determinations that adversely affect
the Company's operations or that certain agreements between the Company and eye
care providers or third-party payors will not be held invalid and unenforceable.
In addition, these laws and their interpretation vary from state to state. The
regulatory framework of certain jurisdictions may limit the Company's expansion
into, or ability to continue operations within, such jurisdictions if the
Company is unable to modify its operational structure to conform with such
regulatory framework. Any limitation on the Company's ability to expand could
have an adverse effect on the Company.
COST CONTAINMENT AND REIMBURSEMENT TRENDS. A significant portion of the
revenues received by the Affiliated Providers are derived from government
sponsored health care programs and private third-party payors. The health care
industry has experienced a trend toward cost containment as government and
private third-party payors seek to impose lower reimbursement and utilization
rates and negotiate reduced payment schedules with service providers. The
Company believes that these trends may result in a reduction from historical
levels in per patient revenue received by the professional associations. Recent
changes in Medicare payment rates will reduce payments to optometrists and
ophthalmologists. Medicare payments to physicians and other practitioners are
based on the "relative value units" ("RVUs") assigned to the service in
question. These RVUs were adjusted effective January 1, 1997 in a manner that
generally assigns a relatively lower value to services performed by optometrists
and ophthalmologists. As a result of these changes, the projected
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Medicare payments to optometrists and ophthalmologists have and will be reduced
by less than five percent. Additionally, these RVUs were adjusted further as to
ophthalmologists' services, effective January 1, 1998, whereupon projected
Medicare payments for such services have and will be reduced by approximately
two and one-half percent. Private insurance payments could also be affected to
the extent that the payment methodologies used by insurance companies are based
on he Medicare RVUs. Further reductions in payments to professionals or other
changes in reimbursement for health care services could have an adverse effect
on the Company's results of operations. There can be no assurance that any
potential reduced revenues and operating margins from such trends could be
offset through cost reductions, increased volume, introduction of new procedures
or otherwise.
RISKS ARISING FROM HEALTH CARE REFORM. There can be no assurance that the
laws and regulations of the states in which the Company operates will not change
or be interpreted in the future either to restrict or adversely affect the
Company's relationships with its Affiliated Providers or the operation of the
professional associations with which it contracts. Federal and state governments
are currently considering various types of health care initiatives and
comprehensive revisions to the health care and health insurance systems. Some of
the proposals under consideration, or others that may be introduced, could, if
adopted, have a material adverse effect on the Company's financial condition and
results of operations. It is uncertain what legislative programs, if any, will
be adopted in the future, or what actions Congress or state legislatures may
take regarding health care reform proposals or legislation. In addition, changes
in the health care industry, such as the growth of managed care organizations
and provider networks, may result in lower payments for the services of the
Affiliated Providers, which could have a material adverse effect on the Company.
On August 5, 1997, the President signed into law a number of Medicare provisions
as part of the Balanced Budget Act of 1997. When compared to projected Medicare
spending levels under current law, the legislation would reduce Medicare
spending by $115.0 billion over five years. The vast majority of these savings
would come from reductions in payments for services of health care facilities,
practitioners and other providers. The legislation eliminated disparities in
payment rates for similar services by physicians in different specialties
effective January 1, 1998. Payment rates for physician services will no longer
necessarily be updated for inflation. Beginning in 1998, inflation increases
have been adjusted based on a "sustainable growth rate" defined with reference
to the change in (i) the number of Medicare beneficiaries, (ii) the gross
domestic product per capita, and (iii) the level of expenditures for physician
services. The legislation will also revise Medicare payments for practice
expense costs. The legislation will also, among other things, change payments to
managed care plans from the current rate of 95% of fee-for-service rates in the
area to a system based on nationwide average per capita fee-for-service
spending, with an adjustment factor for local area wage rates. This will result
in curbing future increases in high payment urban areas while increasing
payments in rural areas. The legislation will also reduce the annual inflation
adjustment for ASC fees by two percentage points. It is impossible to determine
precisely how these changes will affect payments for services of
ophthalmologists, optometrists and ASC facilities. Any reductions in payment for
these services could have an adverse effect on the Company's results of
operations and financial condition.
NON-COMPETITION COVENANTS. The Management Agreements require each
professional association to use its best efforts to enter into employment
agreements with each Managed Provider that include covenants not to compete with
the professional association for periods ranging from one to two years after
termination of employment, and which require the professional association's
shareholders to pay certain specified amounts to the Company if such shareholder
professionals violate their respective covenants not to compete. Laws affecting
the enforceability of such covenants vary significantly from state to state. In
most states, a covenant not to compete will be enforced only to the extent it is
necessary to protect a legitimate business interest of the party seeking
enforcement, does not unreasonably restrain the party against whom enforcement
is sought, and is not contrary to the public interest. This determination is
made based on all the facts and circumstances of the specific case at the time
enforcement is sought. For this reason, one cannot predict with certainty
whether a court will enforce such a covenant in a given situation. In addition,
it is unclear whether a management company's interest under a management
agreement will be viewed by the courts as the type of protectable business
interest that would permit the management company to enforce such a covenant or
to require the managed professional association to enforce such a covenant
against the employed Managed Provider. Furthermore, liquidated damages
provisions will not be enforced unless the court determines that the amount
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is a reasonable estimate of actual damages that would be difficult to ascertain
in a precise manner. Since the intangible value of the Management Agreement
depends primarily on the ability of the professional association to preserve its
business, which could be harmed if employed professionals went into competition
with the professional association, a determination that these provisions will
not be enforced could have a material adverse effect on the Company.
Additionally, the Company is not permitted under certain circumstances to expand
its Affiliated or Managed Provider network within a certain geographical area
surrounding a Managed Provider without prior consent of the Managed Provider.
Such covenants could serve to limit market penetration opportunities within a
LADS and thus have an adverse effect on the Company's ability to expand within a
LADS.
RISKS ASSOCIATED WITH BSM RELATIONSHIP. The Company has exclusive
consulting agreements with leading ophthalmology practice consultants BSM
Consulting Group ("BSM") and Bruce S. Maller. The agreements are for a term of
five years and may be terminated by a party only for "cause" in the event of a
material breach which remains uncured for 30 days or the occurrence of certain
events related to bankruptcy. Mr. Maller is the chief executive officer of BSM
and a director of the Company. BSM and Mr. Maller assist the Company in
identifying and evaluating suitable ophthalmology practices for acquisition, and
once acquired, integrating the acquired practices and providing strategic
planning designed to enhance the internal growth and development of the
Affiliated Providers. A large part of the success of the Company in implementing
its expansion strategy will depend on the ability of such consultants to assist
Managed Providers in efficiently growing their practices and to identify and
evaluate suitable ophthalmology practices and there can be no assurance that the
consultants will be able to provide such services successfully or that such
services will result in internal growth of the Managed Providers. Furthermore,
in the event that such consultants are no longer able to provide such services
for any reason, there can be no assurance that the Company will be able to
retain other consultants with similar expertise or undertake these tasks
internally. Therefore, the loss of the services of either BSM or Maller could
have a material adverse effect on the Company.
RISKS RELATED TO AMORTIZATION OF INTANGIBLE VALUE IN MANAGEMENT
AGREEMENTS. The Company's pro forma combined total assets reflect substantial
intangible assets in the form of Management Agreements with Managed Providers.
The intangible asset value represents the excess of cost over the fair value of
the separate net assets acquired in connection with rights received by the
Company under its acquired Management Agreements and goodwill. There can be no
assurance that the value of such assets will ever be realized by the Company.
These intangible assets are expected to be amortized on a straight-line method
over a life of 25 years. The Company evaluates on a regular basis whether events
and circumstances have occurred that indicate that all or a portion of the
carrying amount of the asset may no longer be recoverable, in which case an
additional charge to earnings would become necessary. Any determination
requiring the write-off of a significant portion of unamortized intangible
assets would adversely affect the Company's results of operations which may in
turn adversely affect the market price for the Company's Common Stock.
COMPETITION. The health care industry is highly competitive and subject to
continual changes in the methods by which services are provided and the manner
in which health care providers are selected and compensated. The Company
believes that private and public reforms in the health care industry emphasizing
cost containment and accountability will result in an increasing shift of eye
care from highly fragmented, individual or small practice providers to larger
group practices, affiliated practice groups or other eye care delivery systems.
The Company competes with other physician practice management companies which
seek to acquire the allowable business assets of and provide management services
to eye care professionals, some of which have substantially greater financial
resources than the Company. Companies in other health care industry segments,
such as managers of other hospital-based specialties or currently expanding
large group practices, some of which have financial and other resources greater
than those of the Company, may become competitors in providing management to
providers of eye care services. Increased competition could have a material
adverse effect on the Company's financial condition and results of operations.
The basis for competition in the practice management area is service, pricing,
strength of the delivery network, strength of operational systems, the degree of
cost efficiencies and synergies, marketing strength, management information
systems, managed care expertise, patient access and quality assessment programs.
The Company also competes with other providers of eye care services, including
HMOs, PPOs and private insurers, for managed
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care contracts, many of which have larger provider networks and greater
financial and other resources than the Company. Managed care organizations
compete on the basis of administrative strength, size, quality and geographic
coverage of their provider networks, marketing abilities, informational systems,
the strategy of their managed care contracts, operating efficiencies and price.
The Company also competes with other buying group organizations for group
members. Buying group organizations compete on the basis of size and purchasing
power of its member buying group, the strength of its credit, and the strength
of its supplier agreements and relationships.
RISKS ASSOCIATED WITH EYE CARE SERVICES. The Company's business entails an
inherent risk of claims of liability. The optometrists, ophthalmologists and
ASCs which the Company contracts with are involved in the delivery of health
care services to the public and, therefore, are exposed to the risk of
professional liability claims. As a result of the Company providing management
services pursuant to its Management Agreements, the Company may also be named as
a co-defendant in professional liability lawsuits against its Affiliated
Providers from time to time. The Company does not control the practice of
optometry or ophthalmology by the Affiliated Providers or the compliance with
regulatory and other requirements directly applicable to the Affiliated
Providers and their practices. Claims of this nature, if successful, could
result in substantial damage awards to the claimants that may exceed the limits
of any applicable insurance coverage. Insurance against losses related to claims
of this type can be expensive and varies widely from state to state. The Company
is indemnified under the Management Agreements for claims against the
professional associations with which it contracts and maintains liability
insurance for itself. Successful malpractice claims asserted against the
professional associations, however, could have an adverse effect on the
Company's profitability. While the Company believes it maintains reasonable
levels of liability insurance coverage, there can be no assurance that a pending
or future claim or claims will not be successful or, if successful, will not
exceed the limits of available insurance coverage or that such coverage will
continue to be available at acceptable costs and on favorable terms.
DEPENDENCE ON KEY INDIVIDUALS. The success of the Company is dependent
upon the continued services of the Company's senior management. The loss of the
services of one or more of these individuals, including the Company's Chairman,
President and Chief Executive Officer, Theodore N. Gillette, O.D. could have a
material adverse effect on the Company. The Company and Dr. Gillette are parties
to an employment agreement which expires on September 30, 2001 and is renewable
for subsequent one year terms. There can be no assurance that Dr. Gillette will
remain employed by the Company during such period or that his employment
agreement will be renewed. The Company believes that its future success will
also depend in part upon its ability to attract and retain qualified management
personnel. Competition for such personnel is intense and the Company competes
for qualified personnel with numerous other employers, some of whom have greater
financial and other resources than the Company. There can be no assurance that
the Company will be successful in attracting and retaining such personnel.
CONTROL BY CURRENT STOCKHOLDERS AND MANAGEMENT. The Company's current
officers and directors own a significant portion of the outstanding shares of
Common Stock. Accordingly, these individuals, as a group, will have the ability
to significantly influence and may be able to control all matters requiring
stockholder approval, including the election of the Company's directors and any
amendments to the Company's Articles of Incorporation and Bylaws, and to control
the business of the Company. Such control could preclude any acquisition of the
Company and could adversely affect the market price of the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE. Upon sale by the Selling Stockholders of
the shares being offered hereby, the Company will have 15,032,438 shares of
Common Stock outstanding of which 554,900 shares being offered hereby in this
post-effective amendment to the Registration Statement, 652,815 shares sold
pursuant to the Registration Statement after it was filed by the Company on May
12, 1998 relating to the Company's acquisition of LaserSight Incorporated,
2,100,000 shares sold in the Company's initial public offering of Common Stock
on August 18, 1997, 2,300,000 shares sold in the Company's second public
offering on November 20, 1997, and 25,386 shares issued pursuant to the stock
option exercises covered under the Company's Form S-8 registration statement
will be freely tradeable without restriction or the requirement of future
registration under the Securities Act of 1933 (the "Securities Act"). All of the
remaining 9,398,887 shares are Restricted Securities ("Restricted Securities")
as that term is defined by Rule 144
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promulgated under the Securities Act and are subject to certain restrictions
described below. Holders of 6,202,261 of the Restricted Shares are eligible to
sell a portion of such shares pursuant to Rule 144 under the Securities Act
subject to manner of sale, volume, notice and information requirements of Rule
144 and certain of such holders are subject to lock-up agreements described
below. Holders of the 3,196,626 remaining Restricted Shares will be eligible to
sell a portion of such shares pursuant to Rule 144 at differing dates on and
after September 1, 1998. A portion of these shares are subject to certain
registration rights agreements requiring the Company to register such shares
under certain circumstances. The Company has reserved 1,600,000 shares of Common
Stock under the Incentive Plan and the Professional's Plan for issuance pursuant
to stock options granted by the Company, of which options to purchase
approximately 1.1 million shares have been granted. In addition 974,808 shares
of Common Stock are reserved for issuance in the event of the exercise of
warrants granted by the Company. The warrant shares are subject to registration
rights agreements requiring the Company to register such shares under certain
circumstances and otherwise will be eligible for resale subject to all of the
limitations on resale imposed by Rule 144.
The Company has filed a Form S-8 registration statement under the
Securities Act to register all shares of Common Stock subject to then
outstanding stock options and Common Stock issuable pursuant to the Incentive
Plan as well as a Form S-8 registration statement relating to the Company's
Employee Stock Purchase Plan. Shares covered by these registration statements
are eligible for sale in the public markets, subject to the Lock-up Agreements
relating to shares held by executive officers.
The Company is unable to predict the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock in the public market, or the availability of such shares
for future sale, could adversely affect the market price of the Common Stock and
could impair the Company's future ability to raise additional capital through an
offering of its equity securities or to use its Common Stock for acquisitions.
See "Plan of Distribution."
The Company may issue its Common Stock from time to time in connection with
the acquisition of stock or assets of other companies. Such securities may be
issued in transactions exempt from registration under the Securities Act. The
Company currently expects for the foreseeable future to continue to require
contractual lock-up agreements and to provide registration rights consistent
with previous transactions for sellers receiving stock in acquisitions.
CERTAIN ANTI-TAKEOVER PROVISIONS. Certain provisions in the Company's
Articles of Incorporation and Bylaws and Florida law may make a change in
control of the Company more difficult to effect, even if a change in control
were in the stockholders' interest. Such provisions include certain
supermajority voting requirements contained in the Company's Articles of
Incorporation. The Company's Articles of Incorporation also provide that the
Board of Directors is divided into three classes of directors, elected for
staggered three year terms. In addition, the Company's Articles of Incorporation
allow the Board of Directors to determine the terms of preferred stock which may
be issued by the Company without approval of the holders of the Common Stock,
and thereby enable the Board of Directors to inhibit the ability of the holders
of the Common Stock to effect a change in control of the Company. The Company
has entered into employment agreements with executive officers Theodore
Gillette, Richard Sanchez, Richard Welch, as well as certain other employees of
the Company, that require the Company to pay certain amounts to such employees
upon their termination following certain events including a change in control of
the Company. Such agreements may inhibit a change in control of the Company.
RESTRICTIONS ON PAYMENT OF DIVIDENDS. The Company's bank credit facility
places certain restrictions on the future payment of dividends. Furthermore, the
Company currently intends to retain all future earnings for the operation and
expansion of its business and, accordingly, the Company does not anticipate that
any dividends will be declared or paid for the foreseeable future.
POTENTIAL CONFLICTS OF INTEREST FROM RELATED PARTY TRANSACTIONS. There are
currently Management Agreements existing between the Company and professional
associations owned and controlled by several of the Company's officers,
directors and key employees which could create the potential for possible
conflicts of interests for such individuals. Any future transactions and
agreements or modifications of current agreements
15
<PAGE> 17
between the Company and such individuals, other affiliates and their
professional associations will be approved by a majority of the Company's
independent directors and will be on terms no less favorable to the Company than
those that could be obtained from unaffiliated parties.
POSSIBLE VOLATILITY OF STOCK PRICE. The market price of the Common Stock
could be subject to significant fluctuations in response to variations in
financial results or announcements of material events by the Company or its
competitors. The market price of the Common Stock could also be adversely
affected by future sales of restricted stock when legal or contractual holding
periods expire and the volume of such sales exceeds the demand for purchases
thereof. Quarterly operating results of the Company, changes in general
conditions in the economy or the health care industry, or other developments
affecting the Company or its competitors, could cause the market price of the
Common Stock to fluctuate substantially. The equity markets have, on occasion
experienced significant price and volume fluctuations that have affected the
market prices for many companies' securities and that have often been unrelated
to the operating performance of these companies. Concern about the potential
effects of health care reform and regulatory measures has contributed to the
volatility of stock prices of companies in health care and related industries
and may similarly affect the price of the Company's Common Stock. Any such
fluctuations that occur following completion of the sale of shares being
registered hereby may adversely affect the market price of the Common Stock.
YEAR 2000 READINESS. Currently many computer systems in use today were
designed and developed using two digits, rather than four, to specify the
calendar year and as a result, such systems are unable to recognize the year
"2000". The inability of a computer system to recognize the year "2000" or other
dates could cause many computer applications to fail or create erroneous results
unless corrective measures are taken. The Company utilizes software and related
computer technologies essential to its operations that could be affected by the
year "2000" computer system problem.
The Company has implemented a plan of action which it believes will make
its computer systems year "2000" compliant and the expense associated with such
action is not expected to have a material effect on the Company's future
financial condition and results of operations.
The Company also expects to initiate communications with significant
suppliers, customers and other third parties with which the Company does
business, to minimize disruptions to the Company's operations resulting from the
year "2000" problem and to ensure that any significant year "2000" issues are
satisfactorily resolved. There can be no assurances that the failure of computer
systems of the Company or third parties as a result of the year "2000" or
related date problem will not have an adverse effect on the Company's
operations. For example, a failure of electric, telephone, or banking services
provided by third parties attributable to the year "2000" or date related
problems, could have a material adverse affect on the Company's business and
results of operations.
16
<PAGE> 18
THE COMPANY
Vision 21 Physician Practice Management Company, Inc., a current subsidiary
of the Company ("Vision 21 PPMC"), was founded in 1984 to provide management
services to optometry practices owned primarily by the Company's Chief Executive
Officer, Theodore N. Gillette, O.D. At such time, Vision 21 PPMC contracted with
VisionWorks and Eckerd Optical (subsidiaries of Eckerd Corporation) to manage
optometry practices located within VisionWorks and Eckerd retail optical
centers. As Vision 21 PPMC expanded its network of optometry practices under
management, its management services were also expanded to include management
information systems, electronic claims processing, practice administration,
continuing education and credentialing of associated optometrists. By 1987,
management services were provided to over 20 optometry clinics located in the
state of Florida in close proximity to retail optical centers. Additionally,
during that period, Vision 21 PPMC began to form strategic relationships with
independent ophthalmologists to provide its optometric patients with access to
secondary and tertiary eye care services.
In 1986, Vision 21 Managed Eye Care of Tampa Bay, Inc., a current
subsidiary of the Company ("Vision 21 MCO"), began to provide management and
administrative services to networks of eye care providers that offered primary,
secondary and tertiary eye care services. Vision 21 MCO was awarded its first
managed care contract in 1988 covering in excess of 18,000 patient lives, with
retail optical and optometric services provided by its network of eye care
providers.
The Company was incorporated in Florida on May 9, 1996. The principal
operating subsidiaries of the Company are Vision 21 MCO, Vision 21 PPMC and
BBG-COA, Inc. (together with its subsidiaries "Block Vision"). Vision 21 MCO and
Vision 21 PPMC were merged with the Company in November 1996. In the merger, all
of the outstanding shares of stock of Vision 21 PPMC and Vision 21 MCO were
exchanged for an aggregate of 2,685,318 shares of Common Stock of the Company.
The previous shareholders of these two entities consisted of certain executive
officers and directors of the Company."
The Company's Affiliated Providers provide eye care services to LADS
located throughout the United States. The Affiliated Providers consist of
Managed Providers and Contract Providers. The Company's Affiliated Providers, in
conjunction with select national retail optical chains, deliver eye care
services under the Company's managed care contracts and discount fee-for-service
plans covering the Company's exclusively contracted patient lives.
The principal executive office of the Company is located at 7360 Bryan
Dairy Road, Suite 200, Largo, Florida 33777, and its telephone number is (727)
545-4300.
EYECARE ONE ACQUISITION
In March 1998, the Company completed pooling of interests transactions with
EyeCare One Corp. ("EyeCare One") and Vision Insurance Plan of America, Inc.
("VIPA"). EyeCare One was the parent company of Stein Optical which operates 16
optometric retail locations in Milwaukee, Wisconsin. VIPA holds a single service
insurance license and delivers vision care benefits to approximately 19,000
patient lives in Wisconsin. Such transactions are collectively referred to
herein as the "EyeCare One and VIPA Merger." These transactions were accounted
for by the Company as pooling of interests, and the costs of approximately
$508,000 incurred in connection with such transactions were charged to expense.
In connection with these transactions, the Company issued 1,109,806 shares of
Common Stock, subject to closing adjustments, valued at approximately $10.5
million, to the Selling Stockholders. See "Selling Stockholders."
USE OF PROCEEDS
The Selling Stockholders will receive all of the proceeds from sales of
Common Stock pursuant to this Prospectus. Accordingly, the Company will not
receive any of the proceeds from the sale of Common Stock by the Selling
Stockholders.
17
<PAGE> 19
SELLING STOCKHOLDERS
The Common Stock offered hereby was originally issued by the Company to the
stockholders of EyeCare One and VIPA as a result of certain acquisition
transactions exempt from the registration requirements of the Securities Act.
See "EyeCare One Acquisition." The Selling Stockholders may from time to time
offer and sell pursuant to this Prospectus any or all of such Common Stock so
owned. See "Plan of Distribution."
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock by the Selling Stockholders as of
December 11, 1998, as reported to the Company by the Selling Stockholders, the
number of shares of Common Stock being offered by the Selling Stockholders
hereby and the amount and percentage of the Common Stock to be owned
beneficially by the Selling Stockholders following this offering, assuming all
Shares offered hereby are sold. Because the Selling Stockholders may offer all
or some portion of the Common Stock pursuant to this Prospectus, no estimate can
be given as to the actual amount of the Common Stock that will be held by the
Selling Stockholders upon termination of any such sales. Some of the Selling
Stockholders may have acquired or otherwise own varying interests in the
Company's securities other than the securities described below and which are
registered hereunder.
With the exception of a Selling Stockholder's previous ownership of an
entity acquired by the Company, the sale of such ownership to the Company and in
some cases employment with the Company of certain individuals employed by the
entity acquired (not as an executive officer or Director of the Company) and the
exception of the recent appointment of Martin F. Stein as a Director of the
Company on October 5, 1998 to fill the vacancy left by the resignation of Dr.
Herbert Pegues, none of the remaining Selling Stockholders has, or within the
past three years has had, any relationship with the Company or any of its
predecessors or affiliates other than arising from or as a result of the Selling
Stockholders acquisition transaction with the Company. None of the contractual
relationships have been material.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK SHARES OF COMMON STOCK
BENEFICIALLY OWNED PRIOR BENEFICIALLY OWNED AFTER
TO THE OFFERING THE OFFERING(4)
------------------------ NUMBER OF ------------------------
SHARES OF
COMMON STOCK
SELLING STOCKHOLDERS NUMBER PERCENT(1) OFFERED NUMBER PERCENT(1)
-------------------- ---------- ----------- ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
LaserSight Incorporated........... 651,815(2) 4.3% 651,815(2) -- --
Martin F. Stein................... 468,419 3.1 234,209 234,209(3) 1.5%
Robert L. Sowinski................ 398,685 2.7 199,342 199,342(3) 1.3%
Stephen L. Chernof(5)............. 9,396 * 4,698 4,698(3) *
Epsilon Capital Holdings, L.P..... 28,205 * 14,102 14,102(3) *
Daniel J. Stein Irrevocable Trust
u/a/d April 3, 1996(6).......... 65,327 * 32,663 32,663(3) *
Lawrence Stein Irrevocable Trust
u/a/d April 5, 1996(6).......... 65,327 * 32,663 32,663(3) *
Thomas W. Witter.................. 16,442 * 8,221 8,221(3) *
Stein 1998 Limited
Partnership(7).................. 29,800 * 14,900 14,900(3) *
John C. Coleman Trust u/t/a August
5, 1994......................... 28,205 * 14,102 14,102(3) *
--------- ---- --------- ------- ----
Total................... 1,761,621 11.7% 1,206,715 554,900 3.7%
========= ==== ========= ======= ====
</TABLE>
- ---------------
(1) Based upon 15,032,438 shares of Common Stock outstanding as of October 31,
1998.
(2) Represents shares of Common Stock that LaserSight Incorporated received
pursuant to the Company's acquisition of all of the outstanding stock of LSI
Acquisition, Inc. and MEC Health Care, Inc., all of which were sold in the
public market by LaserSight Incorporated under this Registration Statement
prior to the filing of any post-effective amendment thereto.
(3) Represents the remaining portion of the shares of Common Stock received by
the stockholders of EyeCare One and VIPA pursuant to the EyeCare One and
VIPA Merger. See "EyeCare One Acquisition."
(4) Assuming all of the shares offered pursuant to this Registration Statement
and the Prospectus related thereto are sold.
18
<PAGE> 20
(5) Excludes 130,474 shares of Common Stock, 65,327 owned by the Daniel J. Stein
Irrevocable Trust u/a/d April 3, 1996 (the "DJS Trust") and 65,327 owned by
the Lawrence Stein Irrevocable Trust u/a/d April 5, 1996 (the "LS Trust"),
for each of which, Mr. Chernof is a co-trustee.
(6) Excludes 29,800 shares owned by the Stein 1998 Limited Partnership (the
"Stein L.P.") for which the DJS Trust and LS Trust are general partners.
(7) Excludes 130,474 shares of Common Stock owned by the Stein L.P. general
partners, 65,327 by the DJS Trust and 65,327 by the LS Trust, respectively.
PLAN OF DISTRIBUTION
The Common Stock offered hereby may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling Stockholders
may from time to time offer the Common Stock to or through underwriters,
broker/dealers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
or the purchasers of Common Stock for whom they may act as agents. The Selling
Stockholders and any underwriters, broker/dealers or agents that participate in
the distribution of Common Stock may be deemed to be "underwriters" within the
meaning of the Securities Act and any profit on the sale of Common Stock by them
and any discounts, commissions, concessions or other compensation received by
any such underwriter, broker/dealer or agent may be deemed to be underwriting
discounts and commissions under the Securities Act.
The Common Stock offered hereby may be sold from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
The sale of the Common Stock may be effected in transactions (which may involve
crosses or block transactions) (i) on any national securities exchange or
quotation service on which the Common Stock may be listed or quoted at the time
of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise
than on such exchanges or in the over-the-counter market or (iv) through the
writing and exercise of options or the related hedging transactions thereunder.
At the time a particular offering of the Common Stock is made, a Prospectus
Supplement, if required, will be distributed which will set forth the aggregate
amount of Common Stock being offered and the terms of the offering, including
the name or names of any underwriters or agents, any discounts, commissions and
other terms constituting compensation from the Selling Stockholders and any
discounts, commissions or concessions allowed or reallowed or paid to such
underwriters or agents.
To comply with the securities laws of certain jurisdictions, if applicable,
the Common Stock will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the Common Stock may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
Pursuant to the registration agreements with the Selling Stockholders, all
expenses of the registration of the Common Stock will be paid by the Company,
including, without limitation, Commission filing fees and expenses of compliance
with state securities or "blue sky" laws; provided, however, that the Selling
Stockholders will pay all underwriting discounts and selling commissions, if
any. Pursuant to their respective registration agreements, the Selling
Stockholders will be indemnified by the Company against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith. Additionally, Selling
Stockholders may agree to indemnify any broker-dealer or agents that participate
in transactions involving sales of Common Stock against certain liabilities
arising under the Act.
LEGAL MATTERS
Certain legal matters in connection with the sale of the shares of Common
Stock offered hereby will be passed upon for the Company by Shumaker, Loop &
Kendrick, LLP, Tampa, Florida.
19
<PAGE> 21
EXPERTS
The consolidated financial statements of Vision Twenty-One, Inc. and
Subsidiaries at December 31, 1996 and 1997 and for each of the three years in
the period ended December 31, 1997, appearing in the Company's Form 8-K dated
August 19, 1998, have been audited by Ernst & Young LLP, independent certified
public accountants, as set forth in their report thereon included therein and
incorporated herein by reference.
The financial statements of VWSC (formerly Vision World, Inc.) as of
December 28, 1996 and January 3, 1998 and for each of the three years in the
periods ended December 30, 1995, December 28, 1996, and January 3, 1998
appearing in the Company's Form 8-K/A dated October 13, 1998, have been audited
by Divine, Scherzer & Brody, Ltd., independent certified public accountants, as
set forth in their report thereon included therein and incorporated herein by
reference.
Such financial statements have been incorporated herein by reference in
reliance upon such reports given upon the authority of such firms as experts in
accounting and auditing.
20
<PAGE> 22
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF
COMMON STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Risk Factors.......................... 4
The Company........................... 17
EyeCare One Acquisition............... 17
Use of Proceeds....................... 17
Selling Stockholders.................. 18
Plan of Distribution.................. 19
Legal Matters......................... 19
Experts............................... 20
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
554,900 SHARES
VISION TWENTY-ONE
COMMON STOCK
------------------
PROSPECTUS
------------------
December 14, 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 23
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses payable by it in connection with the
Offering described in this registration statement (other than underwriting
discounts and commissions) will be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee(1)...... $ 3,426
Printing expenses........................................... 5,000
Accounting fees and expenses................................ 15,000
Legal fees and expenses..................................... 20,000
Fees and expenses (including legal fees) for qualification
under state securities laws............................... 2,000
Miscellaneous............................................... 10,000
-------
Total............................................. $55,426
=======
</TABLE>
- ---------------
(1) Previously paid, pursuant to Rule 429, by the Company in connection with the
Registration Statement on Form S-1, File No. 333-51437, filed by the
Company on May 12, 1998
All amounts except the Securities and Exchange Commission registration fee
are estimated. The Company intends to pay all expenses of registration.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.0831 of the Florida Business Corporation Act ("FBCA") limits
the liability of directors of Florida corporations. Section 607.0831 provides as
follows:
1. A director is not personally liable for monetary damages to the
corporation or any other person for any statement, vote, decision, or
failure to act, regarding corporate management or policy, by a director,
unless:
a. The director breached or failed to perform his duties as a
director; and
b. The director's breach of, or failure to perform, those duties
constitutes:
(1) A violation of the criminal law, unless the director had
reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful. A judgment or
other final adjudication against a director in any criminal
proceeding for a violation of the criminal law estops that director
from contesting the fact that his breach, or failure to perform,
constitutes a violation of the criminal law; but does not estop the
director from establishing that he had reasonable cause to believe
that his conduct was lawful or had no reasonable cause to believe
that his conduct was unlawful;
(2) A transaction from which the director derived an improper
personal benefit, either directly or indirectly;
(3) A circumstance under which the liability provisions of
Florida Statutes sec.607.0834 (liability for unlawful distributions)
are applicable;
(4) In a proceeding by or in the right of the corporation to
procure a judgment in its favor or by or in the right of a
shareholder, conscious disregard for the best interest of the
corporation, or willful misconduct; or
(5) In a proceeding by or in the right of someone other than the
corporation or a shareholder, recklessness or an act or omission
which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights,
safety, or property.
II-1
<PAGE> 24
2. For the purposes of this section, the term "recklessness" means the
action, or omission to act, in conscious disregard of a risk;
a. Known, or so obvious that it should have been known to the
director; and
b. Known to the director, or so obvious that it should have been
known, to be so great as to make it highly probable that harm would
follow from such action or omission.
3. A director is deemed not to have derived an improper personal
benefit from any transaction if the transaction and the nature of any
personal benefit derived by the director are not prohibited by state or
federal law or regulation and, without further limitation:
a. In an action other than a derivative suit regarding a decision
by the director to approve, reject, or otherwise affect the outcome of
an offer to purchase the stock of, or to effect a merger of, the
corporation, the transaction and the nature of any personal benefits
derived by a director are disclosed or known to all directors voting on
the matter, and the transaction was authorized, approved or ratified by
at least two directors who comprise a majority of the disinterested
directors (whether or not such disinterested directors constitute a
quorum);
b. The transaction and the nature of any personal benefits derived
by a director are disclosed or known to the shareholders entitled to
vote, and the transaction was authorized, approved, or ratified by the
affirmative vote or written consent of such shareholders who hold a
majority of the shares, the voting of which is not controlled by
directors who derived a personal benefit from or otherwise had a
personal interest in the transaction; or
c. The transaction was fair and reasonable to the corporation at
the time it was authorized by the board, a committee, or the
shareholders, notwithstanding that a director received a personal
benefit.
4. The circumstances set forth in subsection 3 are not exclusive and
do not preclude the existence of other circumstances under which a director
will be deemed not to have derived an improper benefit.
Section 607.0850 of the FBCA empowers a Florida corporation, subject to
certain limitations, to indemnify its directors and officers against expenses
(including attorneys' fees, judgments, fines and certain settlements) actually
and reasonably incurred by them in connection with any suit or proceeding to
which they are a party so long as they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to a criminal action or proceeding, so long as
they had no reasonable cause to believe their conduct to have been unlawful.
The Articles of Incorporation of the Company provide that the Company shall
indemnify any person who is or was a director or officer of the Company to the
full extent permitted by Florida law. In addition, the Board of Directors of the
Company has approved the execution by the Company of indemnification agreements
with the Directors and certain officers of the Company, the form of which has
been filed as an exhibit to the Registration Statement.
The Company maintains director and officer liability insurance.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
2.1* -- Agreement and Plan of Reorganization effective as of
September 1, 1997 among Florida Eye Center, Sever & Ramseur,
M.D., P.A., Raymond J. Sever, M.D. and Henry M. Ramseur,
M.D., and the Registrant.(5)
2.2* -- Asset Purchase Agreement effective as of September 1, 1997
among Thomas J. Pusateri, M.D., P.A., Thomas J. Pusateri,
M.D., and the Registrant.(5)
2.3* -- Asset Purchase Agreement effective as of September 1, 1997
among Leonard E. Cortelli, M.D., P.A., Leonard E. Cortelli,
M.D., and the Registrant.(5)
</TABLE>
II-2
<PAGE> 25
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
2.4* -- Optical Asset Purchase Agreement effective as of September
1, 1997 among Center Optical, Inc., Sever, Pusateri &
Cortelli, M.D., P.A., Henry M. Ramseur, M.D., Raymond J.
Sever, M.D., and the Registrant.(5)
2.5* -- Managed Care Organization Asset Purchase Agreement effective
as of September 1, 1997, among Managed Health Services,
Inc., Leonard E. Cortelli, M.D., Thomas J. Pusateri, M.D.,
Henry M. Ramseur, M.D., Raymond J. Sever, M.D., the
Registrant and Vision 21 Management Services, Inc.(5)
2.6* -- Agreement and Plan of Reorganization effective as of
September 1, 1997, among Retina Associates Southwest, P.C.,
Denis Carroll, M.D., Leonard Joffe, M.D., Reid Schindler,
M.D., and the Registrant.(5)
2.7* -- Agreement and Plan of Reorganization dated May 1, 1997 by
and among Cochise Eye & Laser, P.C., Jeffrey S. Felter,
M.D., Thomas Rodcay, M.D., Vision 21 of Sierra Vista, Inc.
and Vision Twenty-One, Inc.(9)
2.8* -- Asset Purchase Agreement dated June 1, 1997 among
Swagel-Wootton Eye Center, Ltd., Wendy Wootton, M.D., James
C. Wootton, M.D., Lorin Swagel, M.D., Daniel T. McGehee,
O.D. and Vision Twenty-One, Inc.(9)
2.9* -- Optical Asset Purchase Agreement dated June 1, 1997 among
Aztec Optical Limited Partnership, Swagel-Wootton Eye
Center, Ltd., Wendy Wootton, M.D., James C. Wootton, M.D.,
Lorin Swagel, M.D., Daniel T. McGehee, O.D. and Vision
Twenty-One, Inc.(9)
2.10* -- Stock Purchase Agreement dated as of October 31, 1997 by and
among Vision Twenty-One, Inc., BBG-COA, Inc., MarketCorp
Venture Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P.
Block, Saree Block and James T. Roberto.(8)
2.11* -- Stock Purchase Agreement effective December 1, 1997 among
Vision Twenty-One, Inc., MEC Health Care, Inc., LSI
Acquisition, Inc. and LaserSight Incorporated.(10)
2.12* -- Asset Purchase Agreement dated as of December 1, 1997 by and
among Desert Eye Associates, L.T.D., Jack A. Aaron, M.D.,
Richard Marcello, M.D., and Vision Twenty-One, Inc.(13)
2.13* -- Agreement and Plan of Reorganization dated March 31, 1998 by
and between Vision Twenty-One, Inc., Eye Care One Corp.,
Martin F. Stein, Robert C. Sowinski, Eugene H. Edson,
Stephen L. Charnof, John C. Colman, not individually but
solely as trustee of the John C. Colman Trust, u/t/a dated
August 5, 1994, and Stephen L. Charnof and Daniel J. Stein,
not individually but solely in their capacities as Trustees
of the Daniel J. Stein Irrevocable Trust u/a/d April 3,
1996.(12)
2.14* -- Stock Purchase Agreement effective March 31, 1998 by and
among Vision Twenty-One, Inc., Vision Twenty-One of
Wisconsin, Inc., Vision Insurance Plan of America, Inc.,
Martin F. Stein, Robert C. Sowinski, Eugene H. Edson,
Stephen L. Charnof, Thomas W. Witter, and John C. Colman,
not individually but solely as Trustee of the John C. Colman
Trust u/t/a dated August 5, 1994.(13)
2.15* -- Asset Purchase Agreement dated as of April 1, 1998 by and
among Robert L. Garrett, O.D., P.C., Robert L. Garrett,
O.D., Optometric Associates of Arizona, P.L.C., and Vision
Twenty-One, Inc.(13)
2.16* -- Asset Purchase Agreement dated as of April 1, 1998 by and
among Master Eye Consultants, P.C., Optometric Associates of
Texas, P.C., Vision Twenty-One, Inc., and J.R. Cacy,
O.D.(13)
2.17* -- Asset Purchase Agreement dated as of May 1, 1998 by and
among Johnson Eye Institute, P.A., Sever, Pusateri &
Cortelli, M.D., P.A., Optometric Associates of Florida,
P.A., Vision Twenty-One, Inc. and David A. Johnson, M.D.
(14)
</TABLE>
II-3
<PAGE> 26
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
2.18* -- Asset Purchase Agreement effective January 1, 1998, by and
among Elliot L. Shack, O.D., P.A., Charles M. Cummins, O.D.
and Elliott L. Shack, O.D., P.A., and Vision Twenty-One,
Inc.(13)
2.19* -- Stock Purchase Agreement effective as of January 1, 1998 by
and between Vision Twenty-One, Inc., The Complete Optical
Laboratory, Inc., Elliot L. Shack, and Charles M.
Cummins.(13)
2.20* -- Asset Purchase Agreement dated as of May 1, 1998 by and
among Johnson Eye Institute Surgery Center, Inc., Vision
Twenty-One Surgery Center, Ltd. and David A. Johnson, M.D.
and Debra Pazo Johnson.(14)
2.21* -- Asset Purchase Agreement dated effective June 30, 1998 among
Vision Twenty-One, Inc., Vision World, Inc., Russell
Trenholme and Takako Trenholme.(16)
(Schedules (or similar attachments) have been omitted and
the Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Securities and Exchange
Commission upon request.)
3.1* -- Amended and Restated Articles of Incorporation of Vision
Twenty-One, Inc.(1)
3.2* -- Bylaws of Vision Twenty-One, Inc.(1)
4.1* -- Specimen of Vision Twenty-One, Inc. Common Stock
Certificate.(1)
4.2* -- Promissory Note dated June 1996 from Vision Twenty-One, Inc.
to Peter Fontaine.(1)
4.3* -- Promissory Note dated November 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.(1)
4.4* -- Promissory Note dated December 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.(1)
4.5* -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999(Detachable Warrants Exchangeable Into
Common Stock) dated December 20, 1996, by and between Vision
Twenty-One, Inc. and certain purchasers.(1)
4.6* -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers.(1)
4.7* -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock) dated February 28, 1997
between Vision Twenty-One, Inc. and Piper Jaffray Healthcare
Fund II Limited Partnership.(1)
4.8* -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group.(4)
</TABLE>
II-4
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
4.9* -- Credit facility commitment letter dated October 10, 1997
between Prudential Securities Credit Corporation and Vision
Twenty-One, Inc.(5)
4.10* -- Note Purchase Agreement dated October 1997 between Vision
Twenty-One, Inc. and Prudential Securities Credit
Corporation.(9)
4.11* -- Letter Amendment dated December 30, 1997 to the Note and
Warrant Purchase Agreement between Vision Twenty-One, Inc.
and Prudential Securities Credit Corporation.(10)
4.12* -- Stock Distribution Agreement dated December 30, 1997 by and
between Vision Twenty-One, Inc. and LaserSight
Incorporated.(10)
4.13* -- Credit Agreement dated as of January 30, 1998 among Vision
Twenty-One, Inc. the Banks Party Hereto and Bank of Montreal
as Agent.(11)
4.14* -- Amended and Restated Credit Agreement dated as of July 1,
1998 among Vision Twenty-One, Inc., and the Bank of Montreal
as Agent for a consortium of banks.(15) (The Company is not
filing any instrument with respect to long-term debt that
does not exceed 10% of the total assets of the Company and
the Company agrees to furnish a copy of such instrument to
the Commission upon request.)
5.1* -- Opinion of Shumaker, Loop & Kendrick, LLP as to the Common
Stock being registered.(13)
23.1 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.2 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.3 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.4* -- Consent of Shumaker, Loop & Kendrick, LLP (included in their
opinion filed as Exhibit 5.1).(13)
23.5 -- Consent of Divine, Scherzer & Brody, Ltd., independent
certified public accountants.
24.1* -- Power of Attorney (included on signature page).(13)
</TABLE>
- ---------------
* Previously filed as an Exhibit in the Company filing identified in the
footnote following the Exhibit Description and incorporated herein by
reference.
(1) Registration Statement on Form S-1 filed on June 13, 1997 (File No.
333-29213).
(2) Amendment No. 1 to Registration Statement on Form S-1 filed on July 23,
1997.
(3) Amendment No. 3 to Registration Statement on Form S-1 filed on August 14,
1997.
(4) Amendment No. 4 to Registration Statement on Form S-1 filed on August 18,
1997.
(5) Form 8-K filed September 30, 1997.
(6) Registration Statement on Form S-1 filed on October 30, 1997 (333-39031).
(7) Amendment No. 1 to Registration Statement on Form S-1 filed on November 3,
1997.
(8) Form 10-Q filed on November 14, 1997.
(9) Amendment No. 2 to Registration Statement on Form S-1 filed November 19,
1997.
(10) Form 8-K filed January 13, 1998.
(11) Form 8-K filed February 10, 1998.
(12) Form 8-K filed April 14, 1998.
(13) Registration Statement on Form S-1 filed on April 30, 1998 (File No.
333-51437).
(14) Amendment No. 1 to Registration Statement on Form S-1 filed on May 12, 1998
(333-51437)
(15) Form 8-K filed July 10, 1998.
(16) Form 10-Q filed August 14, 1998.
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.
To include any material information with respect to the plan of
II-5
<PAGE> 28
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities 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 Securities
Act and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
II-6
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-effective
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Largo, State of Florida
on December 11, 1998.
VISION TWENTY ONE, INC.
By: /s/ THEODORE N. GILLETTE
-----------------------------------
Theodore N. Gillette, Chief
Executive Officer
(The Principal Executive Officer)
By: /s/ RICHARD T. WELCH
-----------------------------------
Richard T. Welch, Chief Financial
Officer
(The Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Post-effective Amendment No. 2 to the Registration Statement has been signed by
the following persons in the capacities indicated on December 11, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S> <C>
/s/ THEODORE N. GILLETTE Chief Executive Officer and Director
- ------------------------------------------------
Theodore N. Gillette
/s/ RICHARD T. WELCH Chief Financial Officer and Director
- ------------------------------------------------
Richard T. Welch
* Director
- ------------------------------------------------
Richard L. Sanchez
* Director
- ------------------------------------------------
Peter Fontaine
/s/ MARTIN F. STEIN Director
- ------------------------------------------------
Martin F. Stein
* Director
- ------------------------------------------------
Bruce S. Maller
* Director
- ------------------------------------------------
Richard L. Lindstrom, M.D.
* Director
- ------------------------------------------------
Jeffrey Katz, M.D.
</TABLE>
II-7
<PAGE> 30
*By: /s/ THEODORE N. GILLETTE
-------------------------------
Theodore N. Gillette
*By: /s/ RICHARD T. WELCH
-------------------------------
Richard T. Welch
as attorneys in fact pursuant
to the power of attorney
included in the Registration
Statement as originally filed
on April 30, 1998.
II-8
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
2.1* -- Agreement and Plan of Reorganization effective as of
September 1, 1997 among Florida Eye Center, Sever & Ramseur,
M.D., P.A., Raymond J. Sever, M.D. and Henry M. Ramseur,
M.D., and the Registrant.(5)
2.2* -- Asset Purchase Agreement effective as of September 1, 1997
among Thomas J. Pusateri, M.D., P.A., Thomas J. Pusateri,
M.D., and the Registrant.(5)
2.3* -- Asset Purchase Agreement effective as of September 1, 1997
among Leonard E. Cortelli, M.D., P.A., Leonard E. Cortelli,
M.D., and the Registrant.(5)
2.4* -- Optical Asset Purchase Agreement effective as of September
1, 1997 among Center Optical, Inc., Sever, Pusateri &
Cortelli, M.D., P.A., Henry M. Ramseur, M.D., Raymond J.
Sever, M.D., and the Registrant.(5)
2.5* -- Managed Care Organization Asset Purchase Agreement effective
as of September 1, 1997, among Managed Health Services,
Inc., Leonard E. Cortelli, M.D., Thomas J. Pusateri, M.D.,
Henry M. Ramseur, M.D., Raymond J. Sever, M.D., the
Registrant and Vision 21 Management Services, Inc.(5)
2.6* -- Agreement and Plan of Reorganization effective as of
September 1, 1997, among Retina Associates Southwest, P.C.,
Denis Carroll, M.D., Leonard Joffe, M.D., Reid Schindler,
M.D., and the Registrant.(5)
2.7* -- Agreement and Plan of Reorganization dated May 1, 1997 by
and among Cochise Eye & Laser, P.C., Jeffrey S. Felter,
M.D., Thomas Rodcay, M.D., Vision 21 of Sierra Vista, Inc.
and Vision Twenty-One, Inc.(9)
2.8* -- Asset Purchase Agreement dated June 1, 1997 among
Swagel-Wootton Eye Center, Ltd., Wendy Wootton, M.D., James
C. Wootton, M.D., Lorin Swagel, M.D., Daniel T. McGehee,
O.D. and Vision Twenty-One, Inc.(9)
2.9* -- Optical Asset Purchase Agreement dated June 1, 1997 among
Aztec Optical Limited Partnership, Swagel-Wootton Eye
Center, Ltd., Wendy Wootton, M.D., James C. Wootton, M.D.,
Lorin Swagel, M.D., Daniel T. McGehee, O.D. and Vision
Twenty-One, Inc.(9)
2.10* -- Stock Purchase Agreement dated as of October 31, 1997 by and
among Vision Twenty-One, Inc., BBG-COA, Inc., MarketCorp
Venture Associates, L.P., New York State Business Venture
Partnership, Chase Venture Capital Associates, Michael P.
Block, Saree Block and James T. Roberto.(8)
2.11* -- Stock Purchase Agreement effective December 1, 1997 among
Vision Twenty-One, Inc., MEC Health Care, Inc., LSI
Acquisition, Inc. and LaserSight Incorporated.(10)
2.12* -- Asset Purchase Agreement dated as of December 1, 1997 by and
among Desert Eye Associates, L.T.D., Jack A. Aaron, M.D.,
Richard Marcello, M.D., and Vision Twenty-One, Inc.(13)
2.13* -- Agreement and Plan of Reorganization dated March 31, 1998 by
and between Vision Twenty-One, Inc., Eye Care One Corp.,
Martin F. Stein, Robert C. Sowinski, Eugene H. Edson,
Stephen L. Charnof, John C. Colman, not individually but
solely as trustee of the John C. Colman Trust, u/t/a dated
August 5, 1994, and Stephen L. Charnof and Daniel J. Stein,
not individually but solely in their capacities as Trustees
of the Daniel J. Stein Irrevocable Trust u/a/d April 3,
1996.(12)
2.14* -- Stock Purchase Agreement effective March 31, 1998 by and
among Vision Twenty-One, Inc., Vision Twenty-One of
Wisconsin, Inc., Vision Insurance Plan of America, Inc.,
Martin F. Stein, Robert C. Sowinski, Eugene H. Edson,
Stephen L. Charnof, Thomas W. Witter, and John C. Colman,
not individually but solely as Trustee of the John C. Colman
Trust u/t/a dated August 5, 1994.(13)
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
2.15* -- Asset Purchase Agreement dated as of April 1, 1998 by and
among Robert L. Garrett, O.D., P.C., Robert L. Garrett,
O.D., Optometric Associates of Arizona, P.L.C., and Vision
Twenty-One, Inc.(13)
2.16* -- Asset Purchase Agreement dated as of April 1, 1998 by and
among Master Eye Consultants, P.C., Optometric Associates of
Texas, P.C., Vision Twenty-One, Inc., and J.R. Cacy,
O.D.(13)
2.17* -- Asset Purchase Agreement dated as of May 1, 1998 by and
among Johnson Eye Institute, P.A., Sever, Pusateri &
Cortelli, M.D., P.A., Optometric Associates of Florida,
P.A., Vision Twenty-One, Inc. and David A. Johnson, M.D.
(14)
2.18* -- Asset Purchase Agreement effective January 1, 1998, by and
among Elliot L. Shack, O.D., P.A., Charles M. Cummins, O.D.
and Elliott L. Shack, O.D., P.A., and Vision Twenty-One,
Inc.(13)
2.19* -- Stock Purchase Agreement effective as of January 1, 1998 by
and between Vision Twenty-One, Inc., The Complete Optical
Laboratory, Inc., Elliot L. Shack, and Charles M.
Cummins.(13)
2.20* -- Asset Purchase Agreement dated as of May 1, 1998 by and
among Johnson Eye Institute Surgery Center, Inc., Vision
Twenty-One Surgery Center, Ltd. and David A. Johnson, M.D.
and Debra Pazo Johnson.(14)
2.21* -- Asset Purchase Agreement dated effective June 30, 1998 among
Vision Twenty-One, Inc., Vision World, Inc., Russell
Trenholme and Takako Trenholme.(16)
(Schedules (or similar attachments) have been omitted and
the Registrant agrees to furnish supplementally a copy of
any omitted schedule to the Securities and Exchange
Commission upon request.)
3.1* -- Amended and Restated Articles of Incorporation of Vision
Twenty-One, Inc.(1)
3.2* -- Bylaws of Vision Twenty-One, Inc.(1)
4.1* -- Specimen of Vision Twenty-One, Inc. Common Stock
Certificate.(1)
4.2* -- Promissory Note dated June 1996 from Vision Twenty-One, Inc.
to Peter Fontaine.(1)
4.3* -- Promissory Note dated November 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.(1)
4.4* -- Promissory Note dated December 1996 from Vision Twenty-One,
Inc. to Peter Fontaine.(1)
4.5* -- Note Purchase Agreement for 10% Senior Subordinated Notes
Due December 19, 1999(Detachable Warrants Exchangeable Into
Common Stock) dated December 20, 1996, by and between Vision
Twenty-One, Inc. and certain purchasers.(1)
4.6* -- Amendment No. 1 dated April 18, 1997, to that certain Note
Purchase Agreement dated December 20, 1996, by and between
Vision Twenty-One, Inc. and certain purchasers.(1)
4.7* -- Note Purchase Agreement for 10% Senior Subordinated Series
1997 Notes Due December 19, 1999 (Detachable Warrants
Exchangeable Into Common Stock) dated February 28, 1997
between Vision Twenty-One, Inc. and Piper Jaffray Healthcare
Fund II Limited Partnership.(1)
4.8* -- Amended and Restated Note and Warrant Purchase Agreement
dated June 1997 and First Amendment to Amended and Restated
Note and Warrant Purchase Agreement dated August 1997
between Vision Twenty-One, Inc. and Prudential Securities
Group.(4)
4.9* -- Credit facility commitment letter dated October 10, 1997
between Prudential Securities Credit Corporation and Vision
Twenty-One, Inc.(5)
4.10* -- Note Purchase Agreement dated October 1997 between Vision
Twenty-One, Inc. and Prudential Securities Credit
Corporation.(9)
</TABLE>
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
<S> <C> <C>
4.11* -- Letter Amendment dated December 30, 1997 to the Note and
Warrant Purchase Agreement between Vision Twenty-One, Inc.
and Prudential Securities Credit Corporation.(10)
4.12* -- Stock Distribution Agreement dated December 30, 1997 by and
between Vision Twenty-One, Inc. and LaserSight
Incorporated.(10)
4.13* -- Credit Agreement dated as of January 30, 1998 among Vision
Twenty-One, Inc. the Banks Party Hereto and Bank of Montreal
as Agent.(11)
4.14* -- Amended and Restated Credit Agreement dated as of July 1,
1998 among Vision Twenty-One, Inc., and the Bank of Montreal
as Agent for a consortium of banks.(15) (The Company is not
filing any instrument with respect to long-term debt that
does not exceed 10% of the total assets of the Company and
the Company agrees to furnish a copy of such instrument to
the Commission upon request.)
5.1* -- Opinion of Shumaker, Loop & Kendrick, LLP as to the Common
Stock being registered.(13)
23.1 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.2 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.3 -- Consent of Ernst & Young, LLP, independent certified public
accountants.
23.4* -- Consent of Shumaker, Loop & Kendrick, LLP (included in their
opinion filed as Exhibit 5.1).(13)
23.5 -- Consent of Divine, Scherzer & Brody, Ltd., independent
certified public accountants.
24.1* -- Power of Attorney (included on signature page)(13).
</TABLE>
- ---------------
* Previously filed as an Exhibit in the Company filing identified in the
footnote following the Exhibit Description and incorporated herein by
reference.
(1) Registration Statement on Form S-1 filed on June 13, 1997 (File No.
333-29213).
(2) Amendment No. 1 to Registration Statement on Form S-1 filed on July 23,
1997.
(3) Amendment No. 3 to Registration Statement on Form S-1 filed on August 14,
1997.
(4) Amendment No. 4 to Registration Statement on Form S-1 filed on August 18,
1997.
(5) Form 8-K filed September 30, 1997.
(6) Registration Statement on Form S-1 filed on October 30, 1997 (333-39031).
(7) Amendment No. 1 to Registration Statement on Form S-1 filed on November 3,
1997.
(8) Form 10-Q filed on November 14, 1997.
(9) Amendment No. 2 to Registration Statement on Form S-1 filed November 19,
1997.
(10) Form 8-K filed January 13, 1998.
(11) Form 8-K filed February 10, 1998.
(12) Form 8-K filed April 14, 1998.
(13) Registration Statement on Form S-1 filed on April 30, 1998 (File No.
333-51437).
(14) Amendment No. 1 to Registration Statement on Form S-1 filed on May 12, 1998
(333-51437)
(15) Form 8-K filed July 10, 1998.
(16) Form 10-Q filed August 14, 1998.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the captions "Experts", "Selected
Financial Data" and "Supplemental Selected Financial Data" and to the use of our
reports as follows in the Registration Statement (Form S-1 No. 333-51437) and
the related Prospectus of Vision Twenty-One, Inc. dated May 12, 1998 (as amended
by Post-Effective Amendment No. 2 on Form S-3 to Form S-1).
<TABLE>
<S> <C>
SWAGEL-WOOTTON EYE CENTER, LTD. AND OCTOBER 12, 1997
AZTEC OPTICAL LIMITED PARTNERSHIP
RICHARD L. SHORT, D.O., P.A. MARCH 14, 1997, EXCEPT FOR NOTE 12,
d/b/a EYE ASSOCIATES OF PINELLAS AS TO WHICH THE DATE IS MARCH 28,
1997
COCHISE EYE & LASER, P.C. MARCH 28, 1997, EXCEPT FOR NOTE 6,
AS TO WHICH THE DATE IS MAY 1, 1997
RETINA ASSOCIATES, SOUTHWEST, P.C. AND OCTOBER 31, 1997
DGL PROPERTIES, INC.
MANAGED HEALTH SERVICE, INC. NOVEMBER 21, 1997
MEC HEALTH CARE, INC. AND MARCH 5, 1998
LSI ACQUISITION, INC.
</TABLE>
/s/ Ernst & Young LLP
---------------------------------
Ernst & Young LLP
Tampa, Florida
December 8, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the captions "Experts", "Selected
Financial Data" and "Supplemental Selected Financial Data" and to the use of our
reports as follows in the Registration Statement (Form S-1 No. 333-51437) and
the related Prospectus of Vision Twenty-One, Inc. dated May 12, 1998 (as amended
by Post-Effective Amendment No. 2 on Form S-3 to Form S-1).
<TABLE>
<S> <C>
EyeCare One Corp. February 4, 1998
Vision Insurance Plan of America, Inc. March 3, 1998
</TABLE>
/s/ Ernst & Young LLP
---------------------------------
Ernst & Young LLP
Milwaukee, Wisconsin
December 8, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Post-Effective Amendment No. 2 on Form S-3 to Form S-1
No. 333-51437) and related Prospectus of Vision Twenty-One, Inc. for the
registration of 554,900 shares of its common stock and to the incorporation by
reference therein of our report dated March 11, 1998 (except Note 16, as to
which the date is March 31, 1998), with respect to the consolidated financial
statements of Vision Twenty-One, Inc. and Subsidiaries at December 31, 1996 and
1997 and for the three years in the period ended December 31, 1997 included in
the Form 8-K dated August 19, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
---------------------------------
Ernst & Young LLP
Tampa, Florida
December 8, 1998
<PAGE> 1
Exhibit 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 21, 1998 accompanying the financial
statements of VWSC Corporation (formerly Vision World, Inc.) for each of the
three years ended January 3, 1998, included in the Form 8-K/A, filed October 13,
1998, of Vision Twenty-One, Inc. which is incorporated by reference into the
Vision Twenty-One Registration Statement on Form S-1 (No. 333-51437) as amended
by post effective amendment No. 2 on Form S-3, filed on December 9, 1998. We
consent to the incorporation by reference in the above mentioned Registration
Statement of the aforementioned report.
/s/ Divine, Scherzer & Brody, Ltd.
Minneapolis, Minnesota
December 8, 1998
