<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MC INFORMATICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
MC INFORMATICS, INC.
18881 VON KARMAN AVE., SUITE 100
IRVINE, CA 92612
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 1999
To the Shareholders of MC Informatics, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of shareholders of MC
Informatics, Inc., a California corporation (the "Company"), will be held on May
24, 1999, at 3:00 p.m. local time at 18881 Von Karman Ave., Irvine, California
for the following purposes:
1. To elect five (5) members of the board of directors to hold office
until the 2000 annual meeting of shareholders and until their
respective successors are elected and qualified.
2. To vote upon a proposal to ratify the appointment of BDO Seidman, LLC
as the Company's independent public accountants for the year ending
December 31, 1999.
3. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on April 15, 1999 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof. For ten days prior to the meeting, a complete list of the shareholders
entitled to vote at the meeting will be available for examination by any
shareholder for any purpose relating to the meeting during ordinary business
hours at the principal office of MC Informatics, Inc.
By order of the board of directors
/s/ Jeffrey L. Pollard
Jeffrey L. Pollard
Chief Financial Officer
Irvine, California
April 30, 1999
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. PROXIES ARE REVOCABLE, AND
ANY SHAREHOLDER MAY WITHDRAW HIS OR HER PROXY AND VOTE IN PERSON AT THE MEETING.
2
<PAGE>
MC INFORMATICS, INC.
18881 VON KARMAN AVE., SUITE 100
IRVINE, CA 92612
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
DATED APRIL 30, 1999
The accompanying proxy is solicited by the board of directors of MC
Informatics, Inc., a California corporation (the "Company"), for use at the
annual meeting of shareholders to be held on May 24, 1999, or any adjournment
thereof, for the purposes set forth in the accompanying notice of annual
meeting. The date of this Proxy Statement is April 30, 1999, the approximate
date on which this proxy statement and the accompanying form of proxy were first
sent or given to shareholders.
GENERAL INFORMATION
Voting Securities. Only shareholders of record as of the close of business
-----------------
on April 15, 1999 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were shares of common stock of the Company, no
par value, issued and outstanding. Shareholders may vote in person or by proxy.
Each holder of shares of common stock is entitled to one vote for each share of
stock held on the proposals presented in this proxy statement. The Company's
bylaws provide that a majority of all of the shares of the stock entitled to
vote, whether present in person or represented by proxy, shall constitute a
quorum for the transaction of business at the meeting.
Solicitation of Proxies. The cost of soliciting proxies will be borne by
-----------------------
the Company. In addition to soliciting shareholders by mail through its regular
employees, the Company may request banks and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have stock of the
Company registered in the names of such persons and will reimburse them for
their reasonable, out-of-pocket costs. The Company may use the services of its
officers, directors, and others to solicit proxies, personally or by telephone,
without additional compensation.
Voting of Proxies. All valid proxies received prior to the meeting will be
-----------------
voted. All shares represented by a proxy will be voted, and where a shareholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A shareholder giving a proxy has the power to revoke his or her
proxy, at any time prior to the time it is voted, by delivery to the Secretary
of the Company of a written instrument revoking the proxy or a duly executed
proxy with a later date, or by attending the meeting and voting in person.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Five (5) directors, constituting the Company's full board, are to be
elected at the Annual Meeting. If elected, the nominees will serve as directors
until the Company's annual meeting of shareholders in 2000, and until their
successors are elected and qualified.
Management's nominees for election to the board of directors and certain
information with respect to their age and background are set forth below.
Management knows of no reason why any nominee would be unable or unwilling to
serve. However, if any nominee(s) should for any reason be unable or unwilling
to serve, the proxies will be voted for such substitute nominees as management
may designate.
If a quorum is present and voting, the nominees for directors receiving the
highest number of votes will be elected as directors. Abstentions and shares
held by brokers that are present, but not voted because the brokers were
prohibited from exercising discretionary authority, i.e., "broker non-votes,"
will be counted as present for purposes of determining if a quorum is present.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION WITH COMPANY AGE SINCE
- ---------------- --------------------------------- --- --------
<S> <C> <C> <C>
Bill Childs Chief Executive Officer, Director 59 1999
Joseph R. Dunham Director 35 1998
David Joiner Director 50 1999
John Pappajohn Director 70 1993
Bruce Ryan Director 57 1999
</TABLE>
Bill Childs joined MC Informatics, Inc. in April 1997. He has been the
Chief Executive Officer of MC Informatics, Inc. and Chairman of the Board since
that date. Mr. Childs was a co-founder of Technicon Data Systems in 1968.
Technicon is currently a $200 million company, operating under the name
Eclipsys, providing services to the healthcare industry. Mr. Childs, in 1980,
also founded Healthcare Informatics magazine along with several other magazines.
He sold Healthcare Informatics to McGraw-Hill in 1995. In 1995, Mr. Childs
joined CyCare Systems as Senior Vice President - Product Management.
Joseph R. Dunham has been a director of the Company since 1998, and since
1997, he has been Senior Vice President of Equity Dynamics, a venture capital
firm owned by Mr. John Pappajohn, a principal shareholder of the Company. Mr.
Dunham has been involved in capital formation in the venture capital and banking
industries for over 10 years. He is currently on the board of several
privately-held companies including: Advanced Analytical Technologies, Inc.,
TeleDirect International, Inc. and Renaissance Software. Prior to Equity
Dynamics, from 1993 to 1997, Mr. Dunham was manager of Investment Services at
Wellmark Blue Cross Blue Shield of Iowa and from 1990 to 1993, he was Vice
President of Corporate Finance at Allied Group Merchant Banking. Mr. Dunham
received his B.A. in Business Education and Computer Sciences from Warburg
College and his M.B.A. from Drake University.
David Joiner has been a director of the Company since 1999. Currently, Mr.
Joiner is serving as Vice President of Information Systems of Quorum Health
Group, an information technology and national consulting firm for over 200
hospitals. Prior to joining Quorum, Mr. Joiner served as President of
Management Directions Incorporated. Prior to MDI, Mr. Joiner was a senior
consultant with Superior Consultant Group. Mr. Joiner received a B.B.A. from
the University of Memphis in 1970.
John Pappajohn has been a director of the Company since 1993. Mr.
Pappajohn also serves as a director of the following companies: Pace Health
Management Systems, Inc.; Patient Infosystems, Inc., and American Physicians
Partners, Inc. Mr. Pappajohn has been the sole owner of Pappajohn Capital
Resources, a venture capital firm, and has served as President of Equity
Dynamics, Inc., a financial consulting firm, since 1969. Mr. Pappajohn received
a B.S.C. degree from the University of Iowa in 1952.
4
<PAGE>
Bruce Ryan has been a director of the Company since 1999. Dr. Ryan spent
ten years at IBM, moving from basic research to sales and marketing. He joined
Digital Equipment Corporation serving as V. P. Sales and Marketing for the
General International Area, an organization of over 2000 employees selling the
company's products and services internationally. In 1993, Dr. Ryan joined Wang
Laboratories as Senior Vice President and General Manager of the Federal Systems
Division and then as President, Specialty Solutions. Dr. Ryan received a B.S.
in Physics from Boston College and a M.S. and Ph.D. from Lehigh University.
During 1998, the board held one meeting and took action by unanimous
written consent seven times.
The Company has an audit committee and a compensation committee.
The audit committee's function is to review with the Company's independent
accountants and management the annual financial statements and independent
accountants' opinion, review the scope and results of the examination of the
Company's financial statements by the independent accountants, approve all
professional services and related fees performed by the independent accountants,
recommend the retention of the independent accountants to the board, subject to
ratification by the shareholders, and periodically review the Company's
accounting policies and internal accounting and financial controls. Effective
as of April 19, 1999, the members of the audit committee were Messrs. Pappajohn,
Ryan and Joiner. The audit committee held one meeting in 1998.
The compensation committee's function is to review and establish salary
levels for executive officers and certain other management employees and to
grant stock options. The members of the compensation committee in 1998 were
Messrs. Pappajohn and Dunham. During 1998, the compensation committee held one
meeting. Effective as of April 19, 1999, the members of the compensation
committee were Messrs. Dunham, Ryan and Joiner.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES
NAMED ABOVE.
5
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected BDO Seidman, LLC as
independent accountants to audit the financial statements of the Company for the
year ending December 31, 1999. A representative of BDO Seidman, LLC is
expected to be present at the annual meeting with the opportunity to make a
statement if the representative desires to do so, and is expected to be
available to respond to appropriate questions.
The affirmative vote of a majority of the votes cast at the annual meeting
of shareholders, at which a quorum representing a majority of all outstanding
shares of common stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Abstentions and broker non-
votes will each be counted as present for purposes of determining the presence
of a quorum. Abstentions have the same effect as a negative vote on this
proposal. Broker non-votes will have no effect on the outcome of this vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPOINTMENT
OF BDO SEIDMAN, LLC AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE YEAR
ENDING DECEMBER 31, 1999.
6
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 3, 1999,
with respect to the beneficial ownership of the Company's common stock by (i)
each person known by the Company to own more than 5% of the Company's common
stock, (ii) each director and director-nominee of the Company, (iii) the
individual who served as the Chief Executive Officer of the Company in 1998, and
the other three highest compensated executive officers of the Company whose
salary and bonus for the year ended December 31, 1998 exceeded $100,000 (the
"Named Executive Officers"), and (iv) all directors and executive officers of
the Company as a group.
<TABLE>
<CAPTION>
SHARES OWNED (2)
---------------------------------------------
NAME AND ADDRESS OF
BENEFICIAL OWNER (1) NUMBER OF SHARES PERCENTAGE OF CLASS
- ------------------------------------------------------- ---------------- -------------------
<S> <C> <C>
Peter S. O'Donnell (3)................................. 0 *
Tim Yamauchi (4)....................................... 0 *
Terry Brandt (5)....................................... 50,000 *
John Pappajohn (6)..................................... 2,410,000 15.9%
Edgewater Private Equity Fund II, L.P. 2,036,000 13.3%
666 Grand Avenue, Suite 200
Des Moines, Iowa 50309
James A. Gordon (7).................................... 2,036,000 13.3%
Dr. Joseph Rudick, Jr (8).............................. 339,000 2.2%
150 Broadway
New York, New York 10038
Molly C. Coye, MD (9).................................. 77,400 *
Joseph R. Dunham II (10)............................... 60,000 *
Bill Childs (11)....................................... 3,729,521 23.8%
Garfield Thompson (12)................................. 1,777,954 12.3%
All officers and directors as a group (eight
persons) (13) 10,479,875 65.2%
</TABLE>
__________
* Represents less than 1%.
(1) Except as otherwise indicated, the address for each beneficial owner
identified is c/o MC Informatics, Inc., 18881 Von Karman Ave., Suite 100,
Irvine, California 92612.
(2) Unless otherwise indicated, the Company believes that all persons and
entities named in the table have sole voting and investment power with
respect to all shares of common stock beneficially owned by them. A person
is deemed to be the beneficial owner of shares of common stock that can be
acquired by such person within 60 days from March 3, 1999, upon the exercise
of options or convertible securities. Each beneficial owner's percentage
ownership is based on 15,267,075 shares of common stock outstanding as of
March 3, 1999 and is determined by assuming that convertible securities and
options that are held by such person (but not those held by any other
person) and which are exercisable within such period have been exercised.
7
<PAGE>
(3) Mr. O'Donnell served as the Company's Chief Executive Officer through May
1998. The Company did not have a chief executive officer for the remainder
of 1998.
(4) Mr. Yamauchi served as the Company's Chief Financial Officer through May
1998.
(5) Mr. Brandt served as the Company's Vice President through March, 1999.
Includes immediately exercisable options to purchase 50,000 shares; options
for 20,624 shares have vested.
(6) Includes immediately exercisable options to purchase 10,000 shares.
(7) Includes 1,236,000 shares of Common Stock held by Edgewater Private Equity
Fund II, L.P. Mr. Gordon may be deemed to be the beneficial owner of such
shares. Excludes 30,000 shares of common stock held by Laura Gordon 1985
Trust over which Mr. Gordon has voting power but no pecuniary interest. Mr.
Gordon disclaims beneficial ownership of such 30,000 shares.
(8) Includes immediately exercisable options to purchase 24,000 shares.
(9) Includes immediately exercisable options to purchase 77,400 shares.
(10) Mr. Dunham became a director of the Company on April 21, 1998. Includes
immediately exercisable options to purchase 10,000 shares.
(11) Mr. Childs became Chief Executive Officer of the Company on March 3, 1999.
Includes immediately exercisable options to purchase 500,000 shares.
(12) Mr. Thompson became Senior Vice President of the Company on March 3, 1999.
Includes immediately exercisable options to purchase 100,000 shares.
(13) Includes immediately exercisable options to purchase 811,400 shares.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the total
compensation of the Named Executive Officers for the years ended December 31,
1998, 1997 and 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
NAME AND PRINCIPAL SECURITIES UNDERLYING OTHER ANNUAL
POSITION YEAR SALARY BONUS OPTIONS (#) COMPENSATION
- ------------------------------ ---- -------- ----------- ---------------------- ------------
<S> <C> <C> <C> <C> <C>
Peter S. O'Donnell (1) 1998 $ 72,723 $95,000 (2) -- --
Former President, Chief 1997 $163,200 $20,000 (3) -- --
Executive Officer and 1996 $161,067 $26,667 -- --
Chairman of the Board
Tim Yamauchi (4) 1998 $ 73,333 $34,363 -- --
Former Chief Financial Officer 1997 $110,000 $---- -- --
1996 $101,141 $20,000 -- --
Terry Brandt (5)
Former Chief Technology 1998 $114,583 $---- -- --
Officer 1997 $ 98,958 $---- 50,000 --
</TABLE>
__________________
(1) Mr. O'Donnell resigned from the Company in May 1998.
(2) Represents severance pay.
(3) Represents payment of deferred 1996 year end bonus.
(4) Mr. Yamauchi resigned from the Company in May 1998.
(5) Mr. Brandt resigned from the Company in March 1999.
9
<PAGE>
OPTIONS GRANTED AND EXERCISED IN 1998
During the year ended December 31, 1998, the Company did not grant options
to the Named Executive Officers. None of the Named Executive Officers exercised
options during the year ended December 31, 1998.
The following table provides specified information concerning all
repricings of options to purchase the Company's Common Stock held by any
executive officer of the Company since January 17, 1997, the date of the
Company's initial public offering:
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
NUMBER OF MARKET PRICE OF EXERCISE PRICE OPTION TERM
SECURITIES STOCK PER SHARE PER SHARE AT NEW REMAINING AT
UNDERLYING AT TIME OF TIME OF EXERCISE DATE OF
OPTIONS REPRICED REPRICING OR REPRICING OR PRICE PER REPRICING OR
NAME AND POSITION DATE OR AMENDMENT AMENDMENT AMENDMENT SHARE AMENDMENT
------------------------- -------- ---------------- --------------- -------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald W. Zieg, Former 5/28/97 50,000 $3.13 $5.00 $3.13 115 months
Vice President 5/26/98 10,000 $0.56 $3.28 $1.00 108 months
5/26/98 50,000 $0.56 $3.13 $1.00 103 months
Terry Brandt, 5/26/98 10,000 $0.56 $3.28 $1.00 115 months
Former Chief Technology 5/26/98 30,000 $0.56 $3.28 $1.00 113 months
Officer 5/26/98 10,000 $0.56 $3.38 $1.00 121 months
</TABLE>
10
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE OPTIONS
On April 23, 1998, the compensation committee, comprised of John Pappajohn
and Joe Dunham, considered the options held by the Company's employees,
including executive officers, and the fact that a broad decline in the price of
the Common Stock of the Company had resulted in a substantial number of stock
options granted pursuant to the 1994 Stock Option Plan having exercise prices
above the recent trading prices of the Company's Common Stock (the "Underwater
Options").
The compensation committee reviewed a study prepared by the finance
department of the Company demonstrating that a substantial number of the options
held by employees at that point in time were Underwater Options. The
compensation committee reviewed the impact of the decline in the market price of
the Company's Common Stock on the incentive afforded by the Underwater Options
and determined that such options were significantly less likely to serve their
purposes of retaining and motivating employees whose contributions are important
to the Company's future success. The compensation committee also determined that
unless adjustment was made, longer term employees holding Underwater Options
would perceive a substantial inequity in comparison to more recently hired
employees granted options with exercise prices set at the then lower market
price of the Company's Common Stock, and the morale of such longer term
employees would suffer as a consequence. The compensation committee believed
that the future success of the Company would depend in part on its ability to
retain and motivate its highly skilled employees for whom competition in the
marketplace is intense, and the loss of such employees could have a significant
adverse impact on the Company's business. The compensation committee believed
that providing equity incentives to employees of the Company to further increase
the Company's performance and the value of the Company for its shareholders was
both important and cost effective. The compensation committee considered other
alternatives, such as granting new options selectively to then employed key
employees, but determined that the size of the additional options that would be
required to offset the decline in the market price of the Company's Common Stock
would result in significant dilution to the shareholders.
Considering these factors, the compensation committee determined that it
was in the best interests of the Company and its shareholders to restore the
incentives for employees and executive officers holding Underwater Options to
remain with the Company by adopting a stock option exchange program whereby
employees holding Underwater Options may elect to receive new options pursuant
to the 1994 Stock Option Plan having an exercise price comparable to the trading
price at that time in exchange for the cancellation of the Underwater Options.
The offer to exchange options was completed on April 29, 1998; options for a
total of 250,850 shares with exercise price ranging from $3.13 to $3.75 per
share were exchanged for options for an equal number of shares at an exercise
price of $1.00 per share.
COMPENSATION COMMITTEE
11
<PAGE>
Employment Contracts and Termination and Change of Control Arrangements
- -----------------------------------------------------------------------
The Company entered into employment agreements with each of Peter S.
O'Donnell and Timothy S. Yamauchi which expired in December 1997 and
automatically renewed, pursuant to the terms of the agreements, for additional
one-year terms. The agreements provided for base compensation payable to Mr.
O'Donnell and Mr. Yamauchi of $163,200 and $110,000, respectively, and bonuses
to be determined based on annual pre-tax earnings, if any, of the Company. The
agreements also provided for employment on a full-time basis and contained a
provision that the employee will not compete or engage in a business competitive
with the Company for a period of one year after termination. In the event of
termination of the employee's employment by the Company other than for cause
(including non-renewal of the agreement) or by reason of death or disability,
the Company is obligated to make payments equal to one-half of the then
applicable annual base salary plus a pro rata portion of the bonus payable for
such year. Messrs. O'Donnell and Yamauchi resigned from the Company in May 1998.
The Company had a letter agreement with Gerald W. Zieg pursuant to which
Mr. Zieg is entitled to receive an annual salary of $90,000 plus commissions
equal to 1% of net revenues, subject to certain exclusions. Mr. Zieg resigned
from the Company in September 1998.
In connection with the acquisition of MC Informatics, Inc., in March 1999,
the Company entered into an employment agreement with Bill Childs. Pursuant to
the agreement, Mr. Childs receives an annual salary of $182,000. In the event
the Company is merged or consolidated with another company, all of Mr. Childs'
options will immediately vest. In addition, if Mr. Childs is terminated without
cause following a change in control of the Company, he is entitled to receive a
lump sum severance amount equal to one year of salary at the then current rate.
Certain options granted under the Company's 1994 Founder's Stock Option
Plan contain provisions pursuant to which the unvested portions of outstanding
options become immediately exercisable and fully vested upon a merger of the
Company in which the Company's shareholders do not retain, directly or
indirectly, at least a majority of the beneficial interest in the voting stock
of the Company or its successor, if the successor corporation fails to assume
the outstanding options or substitute options for the successor corporation's
stock to replace the outstanding options. The outstanding options will terminate
to the extent they are not exercised as of consummation of the merger, or
assumed or substituted for by the successor corporation.
Director Compensation
- ---------------------
For each meeting of the board of directors which they attend, directors are
reimbursed for reasonable travel expenses incurred.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
During the last fiscal year, executive compensation was administered by the
compensation committee comprised of two outside directors, Mr. Dunham and Mr.
Pappajohn.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who beneficially own
more than 10% of the Company's Common Stock to file initial reports of ownership
and reports of changes in ownership with the Securities and Exchange Commission
("SEC"). Such persons are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed by such person.
12
<PAGE>
Based solely on the Company's reviews of such forms furnished to the
Company and written representations from certain reporting persons, the Company
believes that all filing requirements applicable to the Company's executive
officers, directors and more than 10% shareholders were complied with.
Certain Relationships and Related Transactions
- ----------------------------------------------
On February 25, 1998, the Company completed an $800,000 private placement.
This private placement consisted of the sale of 400,000 shares of common stock,
at a price of $2.00 per share, to two of the Company's existing shareholders.
On April 13, 1998, the Company announced that with respect to its
outstanding publicly traded warrants, it was reducing the exercise price from
$5.00 per share to $2.50 per share, and the call price for the warrants from
$7.50 to $3.75.
The Company issued 632 shares of series B preferred stock as a result of
the following private placements. On March 31, 1998, two existing shareholders
agreed to purchase 250 shares of the Company's series B preferred stock for
proceeds of $500,000. On May 13, 1998, the Company received the $500,000
proceeds. On June 30, 1998, three existing shareholders purchased 175 shares of
the Company's series B preferred stock for total proceeds of $350,000, of which
$300,000 was received on June 30, 1998, and $50,000 was received on July 8,
1998. On August 14 and September 3, 17, and 25, 1998, the Company received
proceeds of $412,500 in connection with the private placement of additional
shares of series B preferred stock to one existing shareholder and one new
investor. The shares of series B preferred stock converted into 2,525,000 shares
of the Company's common stock on March 3, 1999.
On February 26, 1999, the shareholders of the Company approved the sale of
assets to Patient InfoSystems, Inc. and the merger with MC Informatics, Inc. In
connection with these transactions, the Company changed its name to MC
Informatics, Inc.
On February 26, 1999, the Company sold 1,000,000 shares of common stock to
10 individuals at a price of $1.00 per share.
As part of the agreement to acquire MC Informatics, Inc., Mr Childs had the
right to convert his $77,000 note receivable to common stock at $.50 per share.
In March 1999, Mr. Childs agreed to convert such note to 154,000 shares of
common stock.
Except as described above, since January 1, 1998, the Company has made no
loans to officers, directors, principal shareholders or other affiliates other
than as described above or other than advances of reimbursable expenses. All
such transactions, including loans, are subject to approval by a majority of the
Company's independent and disinterested directors.
13
<PAGE>
SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next annual
meeting of the shareholders of the Company must be received by the Company at
its offices at 18881 Von Karman Ave., Suite 100, Irvine, California 92612, not
later than January 3, 2000, and satisfy the conditions established by the
Securities and Exchange Commission for shareholder proposals to be included in
the Company's proxy statement for that meeting.
14
<PAGE>
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
By order of the board of directors
/s/ Jeffrey L. Pollard
_____________________________________________
Jeffrey L. Pollard
Chief Financial Officer
April 30, 1999
15
<PAGE>
MC INFORMATICS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Bill Childs and Jeffrey L. Pollard, and
each of them, with full power of substitution to represent the undersigned and
to vote all the shares of the stock of MC Informatics, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Company's offices located at 18881 Von Karman Avenue,
Suite 100, Irvine, California 92612 at 3:00 p.m. local time on May 24, 1999, and
at any adjournment thereof (1) as hereinafter specified upon the proposals
listed below and as more particularly described in the Company's Proxy Statement
and (2) in their discretion upon such other matters as may properly come before
the meeting.
The undersigned hereby acknowledges receipt of: (1) Notice of Annual Meeting of
Shareholders of the Company, (2) accompanying Proxy Statement and (3) Form 10-
KSB of the Company for the year ended December 31, 1998.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY
1. Election of the following directors:
[ ] FOR the nominees [ ] WITHHOLD AUTHORITY
listed below (except to vote for the
as marked to the nominees listed
contrary below.) below.
(INSTRUCTION: To withhold authority to vote for a nominee, strike a line
through the nominee's name.)
Bill Childs
Joseph R. Dunham
David Joiner
John Pappajohn
Bruce Ryan
2. To ratify the appointment of BDO Seidman, LLC as independent accountants
of the Company for the year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Whether or not you plan to attend the meeting in person, you are urged to sign
and promptly mail this proxy in the return envelope so that your stock may be
represented at the meeting.
The shares represented hereby shall be voted as specified. If no specification
is made, such shares shall be voted FOR proposals 1 and 2.
[ ] CHECK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT.
[ ] CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING.
Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the Proxy. If shares of stock are held of record by a
corporation, the Proxy should be executed by the President or Vice President and
the Secretary or Assistant Secretary, and the corporate seal should be affixed
thereto. Executors or administrators or other fiduciaries who execute the above
Proxy for a deceased shareholder should give their full title. Please date the
Proxy.
Dated: ______________, 1999
Signature(s): ______________________________
_____________________________
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