As filed with the Securities and Exchange Commission on December 28, 1999.
File No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
ADATOM.COM, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 43-1771999
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
920 Hillview Court, Suite 160
Milpitas, California 95035
(Address, including ZIP Code, of Principal Executive Offices)
1997 STOCK OPTION PLAN
1999 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
1999 STOCK BONUS PLAN
OPTION PLAN FOR FORMER EXECUTIVE
EMPLOYMENT AGREEMENT MODIFICATION PLAN
1997 EMPLOYEE WARRANT PLAN
(Full Title of the Plans)
Mr. Richard Barton
920 Hillview Court, Suite 160, Milpitas, CA 94062
(Name and Address of Agent For Service)
(408) 935-7979
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Henry D. Evans, Jr.
McCutchen, Doyle, Brown & Enersen, LLP
Three Embarcadero Center
San Francisco, California 94111
Tel: (415) 393-2000, Fax: (415) 393-2286
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------ ------------------ --------------------- ---------------------- -------------------
Title of Each Class of Amount To Be Proposed Maximum Proposed Maximum Amount of
Securities To Be Registered Registered (1) Offering Price Per Aggregate Offering Registration Fee
Unit* Price*
- ------------------------------ ------------------ --------------------- ---------------------- -------------------
1997 Stock Option Plan
<S> <C> <C> <C> <C>
Outstanding Options for 15,000 $5.00 (2) $75,000 $20.00
Common Stock (par value
$.01)
Common Stock (par value 185,000 $3.69 (3) $682,650 $181.00
$.01) issued upon
exercise of options being
offered for resale
1999 Stock Option Plan
Outstanding Options for 882,500 $4.25 (2) $3,750,625 $991.00
Common Stock (par value
$.01)
Common Stock (par value 517,500 $3.69 (3) $1,909,575 $505.00
$.01) reserved for future
option grants (4)
1999 Stock Bonus Plan
Common Stock (par value 5,000 $3.69 (3) $18,450 $5.00
$.01) reserved for
issuance as bonus stock
Option Plan for Former
Executive
Common Stock (par value 56,500 $3.69 (3) $208,485 $56.00
$.01) issued upon
exercise of options being
offered for resale
Employment Agreement
Modification Plan
Common Stock (par value 165,000 $3.69 (3) $608,850 $161.00
$.01) issued pursuant to
Plan
1997 Employee Warrant Plan
Warrant and Common Stock
(par value $.01) reserved 142,000 $3.69 (3) $523,980 $139.00
for issuance upon exercise
- ------------------------------ ------------------ --------------------- ---------------------- -----------------------
TOTAL 1,968,500 $7,777,615 $2,058.00
- ------------------------------ ------------------ --------------------- ---------------------- -----------------------
</TABLE>
This Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1993, as amended.
(1) This Registration Statement shall also cover any additional shares of
common stock which become issuable by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of
outstanding shares of stock.
(2) Fee calculated pursuant to Rule 457(h)(1) based upon the weighted average
exercise price of options granted and outstanding as of December 23, 1999
which equals the maximum aggregate offering price for all outstanding
options divided by the number of shares of common stock subject to the
outstanding options.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee based on the average of the high and low prices reported
for the Common Stock on the NASDAQ Small Cap Market on December 23, 1999.
(4) Shares of Common Stock issuable on exercise of options that may be granted
in the future.
* Estimated solely for the purpose of calculating the amount of the
registration fee as noted in footnotes (2) and (3).
<PAGE>
406,500 SHARES
ADATOM.COM, INC.
COMMON STOCK
----------------
This prospectus relates to the reoffer and resale of a total of 406,500 shares
of our Common Stock, $0.01 par value, which have been acquired under our 1997
Stock Option Plan, the Option Plan for Former Executive and the Employment
Agreement Modification Plan. The shares of Common Stock acquired under the Plans
may be offered from time to time by the Selling Stockholders named or described
in this prospectus. The shares may be offered through brokers and dealers to be
selected by the selling stockholders, and through public or private
transactions, on or off the Nasdaq Small Cap Stock Market, pursuant to this
registration statement or pursuant to Rule 144, in negotiated transactions, at
fixed prices, at market prices prevailing at the time of sale, at prices related
to prevailing market prices or at negotiated prices. See "Selling Stockholders"
and "Plan of Distribution." We will receive none of the proceeds from the sale
of the shares by the selling stockholders. We have agreed to bear certain
expenses, including the fees and costs of preparing, filing and keeping
effective this registration statement (other than selling commissions and fees
and expenses of counsel and other advisors to the selling stockholders) in
connection with the registration of the shares.
Our Common Stock is traded on the Nasdaq Small Cap Market under the symbol
"ADTM". On December 23, 1999, the closing price of the Common Stock, as quoted
on that Market, was $3.69.
-------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE THREE.
-------------------
The selling stockholders and any broker-dealers, agents or underwriters that
participate with the selling stockholders in the distribution of the shares may
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, and any commissions received by them and any profit on
the resale of the shares purchased by them may be deemed underwriting
commissions or discounts under the Securities Act.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is December 28, 1999.
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TABLE OF CONTENTS
Available Information......................................................... 2
Information Incorporated by Reference......................................... 2
Risk Factors.................................................................. 3
Use of Proceeds...............................................................11
The Selling Stockholders......................................................11
Plan of Distribution..........................................................12
Experts.......................................................................13
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities ..................................................................14
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, or the "Exchange Act". In accordance with the Exchange Act,
we file all required reports, proxy statements and other information with the
Securities and Exchange Commission, or the "Commission." Reports, proxy
statements and other information filed by us may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the Commission's regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and copies of such material may be obtained from the Public Reference
Section of the Commission, Washington, D.C. 20549, at prescribed rates. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. In addition, the Commission maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission
("http://www.sec.gov"). We have filed the Registration Statement that this
prospectus is a part of to register with the SEC the Common Shares being offered
under this prospectus. As allowed by SEC rules, this prospectus does not contain
all the information that stockholders can find in the registration statement or
the exhibits to the registration statement.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by us with the Commission are incorporated by
reference in this prospectus:
1. Our Annual Report on Form 10-KSB for the fiscal year ended September
30, 1999.
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since September 30, 1999.
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3. The description of our Common Stock contained in our Registration
Statement on Form S-4 (Registration No. 333-87207, filed September 16,
1999) and the prospectus dated September 20, 1999 filed pursuant to
Rule 424(b).*
---------
*Filed under our former name, "HealthCore Medical Solutions, Inc."
The above-listed documents are on file with the Commission and are incorporated
in this prospectus by reference and made a part hereof. All documents we
subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, prior to the termination of the offering of the Common Stock under this
prospectus shall be deemed to be incorporated by reference into this
registration statement. Any statement contained in this prospectus, any
prospectus supplement or in a document incorporated by reference shall be deemed
modified or superseded to the extent that a statement contained in any
prospectus supplement or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein or therein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed to constitute a part hereof, except as so modified or superseded. We will
cause to be furnished without charge to each person to whom this prospectus is
delivered, upon the written or oral request of such person, a complete copy of
the above referenced Form 10-KSB or Form 10-QSB or other documents filed under
the Exchange Act (except for exhibits, unless they are specifically incorporated
by reference into those documents). Requests should be addressed to: Adatom.com,
Inc., 920 Hillview Court, Suite 160 Milpitas, California 95035, telephone
number: (408) 935-7979, Attention: Mr. Michael M. Wheeler.
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK, INCLUDING THE POSSIBLE LOSS OF THE ENTIRE INVESTMENT, AND IS SUITABLE ONLY
FOR PERSONS OF ADEQUATE FINANCIAL MEANS WHO HAVE NO NEED FOR LIQUIDITY IN THIS
INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN LEGAL, TAX
AND FINANCIAL ADVISORS IN RELATION TO INVESTMENT IN THE COMMON STOCK OFFERED
HEREBY. THESE CONSIDERATIONS, HOWEVER ARE NOT EXHAUSTIVE AND THERE MAY EXIST
OTHERS WHICH SHOULD BE CAREFULLY REVIEWED.
HISTORICAL AND FUTURE LOSSES OF THE COMPANY. On October 13, 1999, Adatom,
Inc., or "AI," merged into HealthCore Medical Solutions, Inc. and the surviving
company was renamed Adatom.com, Inc. (the "Merger"). Since its inception, the
business of AI has incurred significant losses, and as of June 30, 1999, had an
approximate accumulated deficit of $2,821,000. As a result, there is an
uncertainty about the Company's ability to continue as a going concern.
Additionally, because AI was a development stage company prior to consummation
of the Merger, the acquisition of AI through the consummation of the Merger may
result in the Company being classified as a development stage company. The
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Company is expected to incur substantial operating losses for the foreseeable
future due to a high level of expenditures in the areas of operations, research
and development and other investments designed to enhance the Company's products
and services and establish Internet capabilities. The Company intends to
substantially increase marketing and promotional spending in an effort to
increase revenues. However, there can be no assurance that the Company will
generate sufficient revenues to ever achieve profitability or otherwise sustain
its profitability in the future.
The operations of the Company are subject to all of the risks inherent in
the establishment of a new business enterprise, including the absence of a
substantial operating history. The likelihood of the success of the Company must
be considered in light of the uncertainties, expenses and delays frequently
encountered in connection with the development of any new business.
ABSENCE OF SUBSTANTIAL OPERATING HISTORY. The operations of the Company are
subject to all the risks inherent in the establishment of a new business
enterprise, including the absence of a substantial operating history. The
likelihood of the success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with the development of any new business. Further, it
is possible that the Company will encounter delays, difficulties in obtaining
any required additional financing, governmental interference through regulations
or otherwise, or other factors which could cause significant delays to the
Company in the development of its products and services.
NEED FOR ADDITIONAL FINANCING; UNCERTAINTY OF CAPITAL FUNDING. The Company
is dependent upon the future equity financing for working capital and to finance
its operations and future plans for expansion. On December 3, 1999, Richard
Barton, its President and CEO of the Company, made a short-term, non-interest
bearing loan in the amount of $200,000 to the Company for working capital
purposes. The Company further estimates that it will require a minimum of
$16,000,000 to adequately implement its business plan and sustain and expand its
sales and marketing activities through December 31, 2000. Additional funds will
be needed, particularly in light of the existence of a number of well financed
competitors and the possibility that there may be a shift in the type of
internet services that are developed and ultimately receive consumer acceptance.
Adequate funds for these and other purposes on terms acceptable to the Company,
whether through additional equity financing, debt financing or other sources,
may not be available when needed or may result in significant dilution to
existing stockholders. Furthermore, the Company's lack of tangible assets to
pledge as security for debt financing could prevent the Company from obtaining
bank or similar debt financing. Failure to obtain adequate financing would have
a material adverse effect on the Company and could result in cessation of the
Company's business.
The Company has contacted various investment banks to raise between $3.0 to
$6.0 million through private placement of the Company's equity securities in
order to satisfy the Company's short term capital needs. However, there can be
no assurance the Company will be successful in securing such financing. Even if
the Company succeeds in obtaining such funding, the Company anticipates that it
will have to raise further capital in the first quarter of 2000. The Company can
give no assurance that it will be able to raise such capital.
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STRATEGIC MARKETING ARRANGEMENTS. The Company relies on certain strategic
marketing arrangements with other companies that have web sites with definable
user bases to attract shoppers to purchase its products. The Company's ability
to generate revenues from online commerce depends, among other things, upon the
increased traffic, purchases, advertising and sponsorships that it generates
through its marketing arrangements. The Company is not sure that other companies
will continue these relationships with it or, if continued, will be on favorable
terms. An inability by the Company to enter into new marketing arrangements or
to maintain its existing arrangements would have a material adverse effect on
its business and operations as a whole.
SUPPLIERS OF RETAIL MERCHANDISE. Suppliers of the Company's retail
merchandise may not continue to sell merchandise to the Company on current
terms. Therefore, the Company may not be able to maintain its current
arrangements with suppliers or be able to establish new or extend current
supplier relationships to ensure acquisition of merchandise in a timely and
efficient manner and on acceptable commercial terms. Loss of these relationships
could have a material adverse effect on the Company. The Company also relies in
large part on its suppliers to process and ship merchandise directly to its
customers. The Company therefore has limited control over the shipping
procedures of its suppliers, and shipments by these suppliers have at times been
subject to delays. If the quality of the services of these suppliers falls below
a satisfactory standard or if the Company's level of returns exceeds its
expectations, it business will be materially adversely affected.
LOSS OF KEY PERSONNEL. The Company's future performance will be
substantially dependent on the continued services of its senior management,
particularly that of Mr. Richard Barton, the Chairman of the Board and Chief
Executive Officer of the Company, and Mr. Sridhar Jagannathan, the Senior Vice
President and Chief Technology Officer of the Company. Additionally, success
will also depend on the Company's ability to retain and motivate its other
officers and key employees. The loss of services of any of the Company's
executive officers or other key employees could have a material adverse effect
on the Company. The Company's expansion and future success if further dependent
on its ability to identify, attract, hire, train, retain and motivate other
highly skilled technical, managerial, editorial, merchandising, marketing and
customer service personnel. Competition for qualified personnel is intense and
the Company may not be able to successfully attract, assimilate or retain
sufficiently qualified personnel. The inability of the Company to hire qualified
personnel could have a material adverse effect on the business of the Company.
FLUCTUATION IN RESULTS OF OPERATIONS. The Company expects significant
fluctuations in future quarterly operating results due to a variety of factors,
many of which are outside the control of the Company. Such factors include, but
are not limited to:
- The Company's ability to retain existing customers, attract new
customers and/or maintain customer satisfaction;
- Announcement or introduction of new sites, services and/or products by
the Company or its competitors;
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- Price competition in the industry;
- The level of use of the Internet and online services and increasing
consumer acceptance of the Internet and other online services for the
purchase of consumer products such as those offered by the Company;
- The ability of the Company to upgrade and develop its systems and
infrastructure and attract new personnel in a timely and effective
manner;
- The level of traffic on the Web Site;
- Technical difficulties, system downtime or Internet brownouts;
- The amount and timing of operating costs and capital expenditures
relating to expansion of the Company's business, operations and
infrastructure;
- The implementation of strategic alliances;
- The level of merchandise returns experienced by the Company; and
- Governmental regulation
In addition, the Company expects seasonality in its business, reflecting a
combination of seasonal fluctuations in Internet usage and traditional retail
seasonality patterns. Internet usage and the rate of Internet growth may be
expected to decline during the summer. Further, sales in the traditional retail
industry are significantly higher in the fourth calendar quarter of each year
than in the preceding three quarters. Due to the foregoing factors, in one or
more future quarters our operating results may fall below the expectations of
securities analysts and investors. In such event, the trading price of the
Common Stock would likely be materially adversely affected.
PROTECTION OF TRADEMARKS AND PROPRIETARY RIGHTS. The Company's performance
and ability to compete are dependent to a significant degree on the Company's
proprietary technology. The Company regards its copyrighted material, service
marks, trademarks, trade secrets and similar intellectual property as critical
to its success, and relies on trademark and copyright law, trade secret
protection and confidentiality and /or licensing agreements with employees,
customers, partners and others to protect its proprietary rights. The Company
currently has registered trademarks "Adatom" and "Discovering New Shopping
Dimensions" in the United States and have a trademark application pending for
the mark "Adatom Home Dimensions." The Company cannot be sure that it will be
able to secure significant protection for these trademarks. It is possible that
competitors of Adatom or others will adopt product or service names similar to
Adatom's leading to customer confusion.
The Company has entered into agreements containing confidentiality and
non-disclosure provisions with its employees and consultants that limit access
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to and distribution of its software, documentation and other proprietary
information. However, the Company cannot be sure that the steps taken by it will
prevent misappropriations of our technology or that agreements entered into for
that purpose will be enforceable. Moreover, it may be possible for a third party
to copy or otherwise obtain and use such software or other proprietary
information without authorization or to develop similar software independently.
Policing unauthorized use of the Company's technology is difficult, particularly
because the global nature of the Internet makes it difficult to control the
ultimate destination or security of software or other data transmitted. The laws
of other countries may afford little or no effective protection of our
intellectual property. In the future, the Company may also need to file lawsuits
to enforce its intellectual property rights, protect its trade secrets and
determine the validity and scope of the proprietary rights of others. Such
litigation, whether or not successful, could result in substantial costs and
diversion of resources, which could have a material adverse effect on the
Company.
The Company also relies on a variety of technology that it licenses from
third parties, including databases and other Internet server software, which is
used on its web site to perform key functions. These third party technology
licenses may not continue to be available to the Company on commercially
reasonable terms. Loss of its ability to maintain or obtain upgrades to any of
these technology licenses could result in delays in completing its proprietary
software enhancements and new developments until equivalent technology be
identified, licensed or developed and integrated. Any such delays would have a
material adverse effect on the Company's operations.
CAPACITY CONSTRAINTS. In the event that the Company suffers any system
interruptions that result in the unavailability of the Company's store on the
Internet or reduced order fulfillment capability, such interruptions would
reduce the volume of goods sold and the attractiveness of the Company's product
offerings. The Company has experienced periodic system interruptions, which it
believes will continue to occur from time to time. The satisfactory performance,
reliability and availability of the Company's store on the Internet,
transaction-processing systems and network infrastructure are critical to the
Company's reputation and its ability to attract and retain customers and
maintain adequate customer service levels. The Company's revenues depend on the
number of visitors who shop at its store on the Internet and the volume of
orders it fulfills.
There will be a significant need to upgrade the capacity of the Company's
Internet store in order to handle thousands of simultaneous shoppers. The
Company's inability to add additional software and hardware or to develop and
upgrade further its existing technology, transaction-processing systems or
network infrastructure to accommodate increased traffic on its store on the
Internet or increased sales volume through its transaction-processing systems
may cause unanticipated system disruptions, slower response times, degradation
in levels of customer service and impaired quality and speed of order
fulfillment, any of which could have a material adverse effect on the Company.
SYSTEM FAILURES. Presently, the Company has limited redundant systems and
does not currently have a complete disaster recovery plan. The Company also
carries no business interruption insurance to compensate it for losses that may
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occur due to such failures. Despite the implementation of network security
measures, the Company's servers are vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions,
delays, loss of data or the inability to accept and fulfill customer orders. The
Company's ability to successfully receive and fulfill orders and provide
high-quality customer service largely depends on the efficient and uninterrupted
operation of its computer and communications hardware systems. The Company's
systems and operations are vulnerable to damage or interruption from fire,
flood, power loss, telecommunications failure, break-ins, earthquake and similar
events. In addition, any disruptions of those web sites or at web sites of other
companies where the Company markets its goods or has a web site link could have
a material adverse effect on the Company and the volume of sales generated
thereby. The occurrence of any of the foregoing risks could have a material
adverse effect on the Company.
RAPID TECHNOLOGICAL ADVANCES. The Company may not successfully use new
technologies effectively or adapt its Internet store, proprietary technology and
transaction-processing systems to customer requirements or emerging industry
standards. The Company's failure to adapt in a timely manner, for technical,
legal, financial or other reasons, to changing market conditions or customer
requirements, could have a material adverse effect on the Company. To remain
competitive, the Company must continue to enhance and improve the
responsiveness, functionality and features of its online stores. The Internet
and the online commerce industry are characterized by rapid technological
change, changes in user and customer requirements and preferences, frequent new
product and service introductions embodying new technologies and the emergence
of new industry standards and practices that could render the Company's existing
Internet stores and proprietary technology and systems obsolete. The Company's
success will depend in part on its ability to license leading technologies
useful in its business, enhance its existing services, develop new services and
technology that address the increasingly sophisticated and varied need of the
Company's prospective customers and respond to technological advances and
emerging industry standards and practices on a cost effective and timely basis.
YEAR 2000 COMPLIANCE. Although the Company has tested its current installed
computer systems and software products for year 2000 problems and it believes
that its computer systems and software products are fully year 2000 compatible,
it is possible that certain computer systems, software products of the Company's
suppliers may not accept input of, store, manipulate and output dates prior to
the year 2000 or thereafter without error or interruption. The Company has
conducted a review of its computer systems to attempt to identify ways in which
its systems could be affected by problems of the Company's suppliers in
correctly processing date information. In addition, the Company is requesting
assurance from all software vendors from which the Company has, or may in the
future purchase, software that such software will correctly process all date
information at all times. Furthermore, the Company is querying its suppliers as
to their progress in identifying and addressing problems that their computer
systems will face in correctly processing date information as the year 2000
approaches. However, the Company may not be able to identify all date handling
problems of its suppliers in advance of their occurrence. The Company may also
be unable to successfully remedy problems that are discovered. The expenses of
its efforts to identify and address such problems could be high and the Company
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could become subject to liabilities as a result of such problems. Any of the
foregoing issues could have a material adverse effect of the Company.
POSSIBLE DELISTING FROM NASDAQ. The Company's Common Stock is currently
traded on the NASDAQ Small Cap Market. As a result of the Merger, the Company
may fail to meet the criteria applied for inclusion of its securities on the
NASDAQ Small Cap Market. Accordingly, the Company's Common Stock risks being
delisted. If this occurs, trading thereafter of such securities, if any, would
be conducted only in the over the counter market on an electronic bulletin board
established for securities that do not meet the NASDAQ listing requirements or
what is commonly referred to as the "pink sheets." As a result, a stockholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the price of the Company's securities due to, among other things, an inactive
public market in such securities. In addition, if the Company's securities were
delisted, they would be subject to a rule that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors. Consequently, delisting, if it
occurred, would affect the ability of the broker-dealers to sell the Company's
securities.
GROWTH MANAGEMENT. In order to manage expected growth of operations and
personnel, the Company will be required to improve existing and implement new
transaction-processing, operational and financial systems, procedures and
controls, and to expand, train and manage an already growing employee base.
Further, the Company must maintain and expand its relationships with various
merchandise manufacturers, distributors, Internet and other online service
providers and other third parties necessary to its business. An inability to
manage growth effectively will have a material adverse effect on the business of
the Company.
GROWTH OF ONLINE COMMERCE. The future revenues of the Company and any
future profits are substantially dependent upon the widespread acceptance and
use of the Internet and online services as a significant medium of commerce by
consumers. Rapid growth in the use of and interest in the Internet and online
services is a recent phenomenon, and we cannot be sure that acceptance and use
will continue to develop or that a sufficiently broad base of consumers will
adopt and continue to use, the Internet and online services as a medium of
commerce. The Company relies on consumers who have historically used traditional
means of commerce to purchase merchandise. For the Company to be successful,
these consumers must accept and utilize novel ways of conducting business and
exchanging information. Moreover, critical issues concerning the commercial use
of the Internet, such as ease of access, security, reliability, cost and quality
of service, remain unresolved and may affect the growth of Internet use of the
attractiveness of conducting commerce online. In addition, the Internet and
online services may not be accepted as a viable commercial marketplace for
reasons relating to the adequacy of technology. To the extent that the Internet
and online services continue to experience significant growth, the Company
cannot assure that the infrastructure of the Internet and online services will
prove adequate to support increased users demands. Difficulties with the
telecommunications used to support the Internet or online services also could
result in slower response times and adversely affect usages of the Internet.
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ADEQUACY OF SECURITY MEASURES. Advances in computer capabilities, new
discoveries in the field of cryptography, or other development may result in a
compromise or breach of the algorithms used by the Company to protect customer
transaction data. Any compromise of our security could have a material adverse
effect on the Company and its reputation in the industry. The Company relies on
encryption and authentication technology licensed from third parties to provide
the security and authentication necessary to effect secure transmission of
confidential information, such as customer credit card numbers. A party who is
able to circumvent our security measures could misappropriate proprietary
information or cause interruptions in the Company's operations. The Company may
be required to expend significant capital and other resources to protect against
such security breaches or to alleviate problems caused by such breaches.
GOVERNMENTAL REGULATION. Due to the increasing popularity and use of the
Internet and other online services, it is possible that a number of laws and
regulations may be adopted with respect to the Internet effecting the business
of the Company. Currently the Company is not subject to regulation by any
domestic or foreign governmental agency, other than regulation applicable to
businesses generally, and laws and regulations directly applicable to access to
online commerce. The adoption of any additional laws and regulations may
decrease the growth of the Internet or other online services which could, in
turn, decrease the demand for the Company's products and services and increase
its costs of doing business or otherwise have a material adverse effect of the
Company.
Additionally, the applicability to the Internet and other online services
of existing laws in various jurisdictions governing issues such as property
ownership, sales and other taxes and personal privacy is uncertain and may take
years to resolve. As the Company's service is available through the Internet in
multiple states and foreign countries, such jurisdictions may claim that the
Company be required to qualify to do business as a foreign corporation in each
such state and foreign country. The Company could be subject to taxes and
penalties for failure to quality as a foreign corporation in a jurisdiction
where the Company is required to do so. Any such new legislation or regulation,
the application of the laws and regulations from jurisdictions whose laws do not
currently apply to the business of the Company, or the application of existing
laws and regulations to the Internet and other online services could have a
material adverse effect on the Company.
INFORMATIONAL LIABILITY. Due to the fact that material may be downloaded
from web sites and subsequently distributed to others, there is a potential that
claims will be made against the Company for negligence, copyright or trademark
infringement or other theories based on the nature and content of such material.
Though the Company carries general liability insurance, this coverage may not
include potential claims of this type or may not be adequate to cover all costs
incurred in defense of potential claims or to indemnify the Company for all
liability that may be imposed. Any costs or imposition of liability that is not
covered by insurance or in excess of insurance coverage could have a material
adverse effect on the Company.
COMPETITION. Many of the current and potential competitors of the Company
have longer operating histories, larger customer bases, greater brand
10
<PAGE>
recognition and significantly greater financial, marketing and other resources
than the Company. In addition, online retailers may be acquired by, receive
investments from or enter into other commercial relationships with larger,
well-established and well financed companies as the use of the Internet and
other online services increases. Certain of the Company's competitors may be
able to secure merchandise from manufactures on more favorable terms and devote
greater resources to market the same. Barriers to entry are minimal and current
and new competitors can launch new sites at a relatively low cost. Increased
competition may result in reduced operating margins, loss of market share and
diminished brand franchise. The Company cannot be sure that it will be able to
compete successfully against current and future competitors. New technologies
and the expansion of existing technologies may increase the competitive
pressures on the Company.
NO DISTRIBUTIONS AND/OR DIVIDENDS ANTICIPATED. The Company does not expect
to pay any cash dividends on its securities in the foreseeable future.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares by the Selling Stockholders.
THE SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders
(except for certain Selling Stockholders that are not affiliates of the Company,
own less than 1,000 shares and may use this prospectus for sale of shares up to
that amount), the number of shares of Common Stock owned by each Selling
Stockholder prior to this offering, the number of shares of Common Stock being
offered for the account of each Selling Stockholder and the number of Common
Shares to be owned by each Selling Stockholder after completion of this
offering. This information is based upon information provided by the Selling
Stockholders. Because the Selling Stockholders may offer all, some or none of
their shares of Common Stock, no definitive estimate as to the number of shares
that will be held by the Selling Stockholders after the offering can be
provided.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
SELLING STOCKHOLDER OWNED PRIOR TO OFFERING SHARES BEING OFFERED OWNED AFTER OFFERING
- ------------------- ----------------------- -------------------- --------------------
<S> <C> <C> <C>
Sharon Polk 6,000 6,000 0
Monique Irmen 1,000 1,000 0
Brendan Hildreth 1,000 1,000 0
Fred Timberlake 1,250 1,250 0
Rick Katz 500 500 0
Karen Brown 250 250 0
Eli Levitin 15,000 15,000 0
Norman Werthwein 15,000 15,000 0
11
<PAGE>
David Mullikin 200,000 200,000 0
Neal Polan 165,000 165,000 0
Toni Todres 1,000 1,000 0
Terri Mullikin 500 500 0
</TABLE>
Each of the Selling Stockholders is a former employee of the Company. Prior to
the Merger, Messrs. Levitin, Mullikin, Polan and Werthwein were directors of the
Company, Mr. Mullikin was the President of the Company and Mr. Polan was the
Chairman and Chief Executive Officer of the Company.
PLAN OF DISTRIBUTION
The Selling Stockholders may offer their shares at various times in one or more
of the following transactions:
- on the Nasdaq Small Cap Market on which the Company's Common Stock is
currently traded (symbol "ADTM");
- on any of the United States securities exchanges where the Common Stock
may be listed and traded in the future;
- in the over-the-counter market;
- in transactions other than on such exchanges or in the over-the-counter
market;
- in connection with short sales of the Common Shares;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in standardized or over-the-counter options; or
- in a combination of any of the above transactions.
The Selling Stockholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The Selling Stockholders may use
broker-dealers to sell the shares. If this happens, broker-dealers will either
receive discounts or commissions from the Selling Stockholders, or they will
receive commissions from purchasers of shares for whom they acted as agents.
12
<PAGE>
EXPERTS
The consolidated financial statements of the Company as of September 30, 1999
incorporated in this prospectus by reference to the Company's Annual Report on
Form 10-KSB for the year ended September 30, 1999 have been so incorporated in
reliance on the report of Richard A. Eisner & Company, LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting. The consolidated financial statements of Adatom, Inc. as of December
31, 1998 incorporated in this prospectus by reference to the Current Report on
Form 8-K dated October 22, 1999 (as amended by Amendment No. 1) have been so
incorporated in reliance on the report of Ireland San Filippo, LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
We are a Delaware corporation. Section 102(b)(7) of the General Corporation Law
of the State of Delaware (the GCL) allows a corporation to include in its
charter a provision eliminating or limiting the personal liability of a director
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty subject to the limitations in that section. Article EIGHTH of our
Certificate of Incorporation provides that the personal liability of directors
of the Corporation is eliminated to the full extent permitted by Section
102(b)(7) of the GCL.
Section 145 of the GCL provides that a Delaware corporation has the power to
indemnify its officers and directors in certain circumstances. Subsection (a) of
Section 145 of the GCL empowers a corporation to indemnify any director or
officer, or former director or officer, who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit or proceeding, provided
that such director or officer acted in good faith in a manner reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, provided that such director
or officer had no cause to believe his or her conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any director
or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred in connection with the
defense or settlement of such action or suit provided that such director or
officer acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such director
or officer shall have been adjudged to be liable to the corporation, unless and
only to the extent that the Court of Chancery or the court in which such action
was brought shall determine that despite the adjudication of liability, such
13
<PAGE>
director or officer is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and the corporation may purchase and maintain insurance on behalf of a director
or officer of the corporation against any liability asserted against him or her
or incurred by him or her in any such capacity or arising out of his or her
status as such whether or not the corporation would have the power to indemnify
him or her against such liabilities under Section 145.
Article SIXTH of our Certificate of Incorporation and Article V of our Bylaws
provide that we shall indemnify and advance expenses to the fullest extent
permitted by Section 145 of the GCL to directors and officers and their heirs,
executors and administrators.
We also have indemnification agreements with each of our officers and directors.
We presently maintain directors' and officers' liability insurance coverage with
an aggregate policy limit of $15,000,000 for each policy year.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
14
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
*The documents containing the information specified in Part 1 of Form S-8
(plan information and registrant information and employee plan annual
information) will be sent or given to employees as specified by Securities and
Exchange Commission Rule 428(b)(1). Such documents need not be filed with the
Securities and Exchange Commission either as part of this registration statement
or as prospectuses or prospectus supplements pursuant to Rule 424. These
documents and the documents incorporated by reference in this registration
statement pursuant to Item 3 of Form S-8 (Part II hereof), taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933. Adatom.com, Inc. (the "Company") will provide a written
statement to participants advising them of the availability without charge, upon
written or oral request, of the documents incorporated by reference in Item 3 of
Part II of this registration statement and including the statement in the
preceding sentence. The written statement to participants will indicate the
availability without charge, upon written or oral request, of other documents
required to be delivered to employees pursuant to Rule 428(b), and will include
the address and telephone number to which the request is to be directed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission by the Company are incorporated by reference in this registration
statement:
1. Our Annual Report on Form 10-KSB for the fiscal year ended September 30,
1999 (the "Registrant 10-K");
2. The Form S-4 Registration Statement filed on September 16, 1999, and
declared effective on September 20, 1999 (Registration No. 333-87207) (the
"Registration Statement") and the prospectus dated September 20, 1999 filed
pursuant to Rule 424(b).
3. All reports filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 since September 30, 1999.
4. The description of capital stock contained in the Registration
Statement.
15
<PAGE>
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this registration
statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, are deemed to be incorporated by reference into this
registration statement and to be a part hereof from the respective dates of
filing of such documents. Any statement contained in this registration statement
or in a document incorporated by reference shall be deemed modified or
superseded to the extent that a statement contained in any subsequently filed
document which also is or is deemed to be incorporated by reference herein or
therein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed to constitute a part hereof, except as so
modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
See "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities" in the Prospectus.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The restricted securities to be reoffered or resold pursuant to this
registration statement consist of stock options and shares of common stock
purchased on the exercise of stock options granted to employees and non-employee
directors of the Company, and shares of common stock issued to employees, under
the 1997 Stock Option Plan, the Option Plan for former Executive and the
Employment Agreement Modification Plan. The securities were issued pursuant to
the exemption provided by Section 4(2) of the Securities Act.
ITEM 8. EXHIBITS.
See Exhibit Index which is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
16
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement,
provided, however, that subparagraphs (i) and (ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference 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.
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.
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 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
17
<PAGE>
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milpitas, State of California on December 28, 1999.
ADATOM.COM, INC.
By:/s/
-------------------------------------
Richard Barton
Chief Executive Officer and President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard Barton and Sridhar Jagannathan,
or either of them, each with the power of substitution, his or her
attorney-in-fact, to sign any amendments to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorney-in-fact, or his or her substitute, may
do or choose to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated, effective December 28, 1999.
SIGNATURE TITLE
/s/
- ------------------------- Chief Executive Officer, Chief Financial Officer,
Richard Barton President and Director
/s/
- ------------------------- Executive Vice President and Director
Sridhar Jagannathan
/s/
- ------------------------- Director
Neal J. Polan
/s/
- ------------------------- Director
Ralph Kennedy Frasier
19
<PAGE>
/s/
- ------------------------- Principal Accounting Officer
Michael Wheeler
20
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION
- -------------- -------------------
4.1 1997 Stock Option Plan as amended (1)
4.2 1999 Incentive And Non-Qualified Stock Option Plan (2)
4.3 1999 Stock Bonus Plan
4.4 Option Plan for Former Executive
4.5 Employment Agreement Modification Plan (3)
4.6 1997 Employee Warrant Plan (4)
5.1 Opinion of McCutchen, Doyle, Brown & Enersen, LLP
23.1 Consent of McCutchen, Doyle, Brown & Enersen, LLP
(included in Exhibit 5.1)
23.2 Consent of Ireland San Filippo, LLP
23.3 Consent of Richard A. Eisner & Company, LLP
24.1 Powers of Attorney (included on the signature page hereto)
(1) Incorporated by reference to Exhibit 10.10(a) filed with Registrant's
quarterly report on Form 10QSB filed with the Securities and Exchange Commission
for the quarter ended March 31, 1999.
(2) Incorporated by reference to Exhibit 10.18 filed with Registrant's
Registration Statement on Form S-4 (File N. 33-87207) filed with the Securities
and Exchange Commission on September 16, 1999.
(3) Incorporated by reference to Exhibit 10.11 filed with Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission on May 3,
1999.
(4) Incorporated by reference to Exhibit 4.1 filed with Registrant's
Registration Statement on Form S-3 (File No. 33-68557) filed with the Securities
and Exchange Commission on December 8, 1998.
21
<PAGE>
EXHIBIT 4.3
ADATOM.COM, INC.
1999 STOCK BONUS PLAN
DECEMBER 7, 1999
Management of the Company is pleased to announce that the Board of
Directors has adopted the 1999 Stock Bonus Plan for eligible employees and
consultants of the Company. Under the Plan, a bonus pool of up to 5,000 shares
of common stock has been created. The final number of shares in the bonus pool
will be equal to the lesser of 5,000 or the number of customer orders shipped
between November 29, 1999 and December 24, 1999. In January 2000, the final
number of shares in the pool will be determined and announced. The number of
shares will be divided evenly among the eligible employees and consultants of
the Company. Part-time employees who are eligible will be allocated shares based
on the average number of hours worked per week during the period pro rated to an
assumed 40-hour week for full-time employees.
Rich Barton, Sri Jagannathan, Mike Wheeler, Mike Vetterli and Michele Ware
will not participate in the Plan. In addition, any employee or consultant who
was not hired before December 12, 1999 or who is no longer employed or providing
services as a consultant for any reason at the time of the determination of the
final number of shares in the pool will not be eligible to receive any shares in
the pool.
/s/
-------------------------
Richard Barton, President
<PAGE>
Optionee: DAVID L. MULLIKIN
Number of Options: 56,500
HEALTHCORE MEDICAL SOLUTIONS, INC.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of October 12, 1999, by and between
HealthCore Medical Solutions, Inc., a Delaware corporation (the "Company"), and
David L. Mullikin (the "Optionee").
WHEREAS, the Optionee and the Company have agreed to terminate the
Optionee's employment with the Company on the date hereof in partial
consideration for the grant of this Option.
IT IS AGREED as follows:
1. Grant of Option. The Company hereby grants to the Optionee on the date
hereof the right and option to purchase up to an aggregate of 56,500 of its
shares of Common Stock ("Shares") at an exercise price per share of $.10 (the
"Exercise Price") as set forth below.
2. Option Period. The option granted hereby each shall expire at 5:00 p.m.
on January 12, 2000 (the "Expiration Date").
3. Exercise of Option.
A. The number of shares set forth under the column entitled
"Incentive" shall be Incentive Stock Options and the number of shares set forth
under the column entitled "Non-Statutory" shall be Non-Statutory Options. The
Optionee may exercise the option hereby granted to the extent and from and after
the dates set forth below on a cumulative basis:
<PAGE>
Number of Shares
as to which
Initial Exercise Date Option is Exercisable
Incentive Non-Statutory
October 12, 1999 -0- 56,500
This option may not be exercised at any time after the Expiration Date.
B. The Optionee may exercise the option (to the extent then exercisable)
by delivering to the Company a written notice duly signed by the stating the
number of Shares that the Optionee has elected to purchase, and accompanied by
payment (by certified or cashiers check) of an amount equal to the full purchase
price for the Shares to be purchased.
The notice must also contain a statement (if required and in a form
acceptable to the Company) that the Optionee is acquiring the Shares for
investment and not with a view toward their distribution or resale. Following
receipt by the Company of such notice and payment, the Company shall issue, as
soon as practicable, the Shares in the name of the Optionee and deliver the
certificate therefor to the Optionee. No Shares shall be issued until full
payment therefor has been made and until the Company has complied with all
requirements of the Securities Act of 1933, the Securities Exchange Act of 1934,
any securities exchange on which the Company's stock may then be listed and all
applicable state laws in connection with the issuance of the Shares or the
listing of the Shares on said securities exchange. All shares purchased upon
exercise of the Option in accordance with this Section shall be fully paid and
nonassessable.
4. Employment. Nothing contained in this Option Agreement shall confer upon
the Optionee any right to be employed by the Company nor prevent the Company
from terminating its current relationship with the Optionee at any time, with or
without cause.
2
<PAGE>
5. Non-Transferability of Option. This option shall not be transferable
other than by will or by the laws of descent and distribution, and may be
exercised during the Optionee's lifetime only by the Optionee.
6. Tax Status. The options set forth under the column entitled "Incentive"
in Section 3 hereof are intended to qualify as incentive stock options within
the meaning of Section 422 of the Code and the options set forth under the
column entitled "Non-Statutory" in Section 3 hereof are not intended to qualify
as incentive stock options within the meaning of Section 422 of the Code.
7. Purchase for Investment. As a condition to the exercise in whole or in
part of the option hereby granted, each written notice of election shall include
a representation by the Optionee that the shares are being purchased for
investment and not for distribution or resale.
8. Notices. Any notice to be given by the Optionee hereunder shall be sent
to the Company at its principal executive offices, and any notice form the
Company to the Optionee shall be sent to the Optionee at his address set forth
below; all such notices shall be in writing and shall be delivered in person or
by registered or certified mail. Either party may change the address to which
notices are to be sent by notice in writing given to the other in accordance
with the terms hereof.
9. Governing Law. The parties hereto hereby acknowledge and agree that the
option hereby is granted in the State of Delaware and any Shares issued upon
exercise of the option will be issued in the State of Delaware. This Agreement,
as well as the grant of such option and issuance of such Shares, is and shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to the agreements made and to be performed entirely within such
State.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
HEALTHCORE MEDICAL SOLUTIONS, INC.
By: /s/
--------------------------------
Neal J. Polan, Chairman
OPTIONEE
/s/
--------------------------------
Dave L. Mullikin
Address:
12817 Woodson
Overland Park, Kansas 66209
--------------------------------
--------------------------------
--------------------------------
4
<PAGE>
EXHIBIT 5.1
December 28, 1999
Adatom.com, Inc.
920 Hillview Court, Suite 160
Milpitas, CA 95035
Ladies and Gentlemen:
We have acted as counsel to Adatom.com, Inc., a Delaware corporation (the
"Company"), in connection with its registration statement on SEC Form S-8 of the
offering of up to 1,562,000 shares of common stock, par value $.01 per share
(the "Common Stock"), under the Company's 1997 Stock Option Plan, as amended,
1999 Incentive and Non-Qualified Stock Option Plan, 1999 Stock Bonus Plan and
1997 Employee Warrant Plan (collectively the "Plans").
In this regard, we have examined the Company's Amended and Restated
Certificate of Incorporation and Bylaws, each as amended to date, and records of
meetings of and written consents by the Board of Directors of the Company. In
addition, we have made such examinations of matters of law as we deemed
appropriate for purposes of this opinion. As to certain factual mattes we deem
relevant to this opinion, we have relied upon certificates and have not sought
to independently verify the matters stated therein.
Based upon the foregoing, it is our opinion that the 1,562,000 shares of
Common Stock, when issued under the Plans, will be validly issued, fully paid
and non-assessable.
This opinion is rendered solely to you in connection with the registration
of the shares of Common Stock under the Registration Statement.
We consent to being named as counsel to the Company in the registration
statement and to the inclusion of a copy of this opinion letter as an exhibit to
<PAGE>
the registration statement. In giving this consent, however, we do not thereby
admit that we are an "expert" within the meaning of the Securities Act of 1933,
as amended.
Very truly yours,
McCUTCHEN, DOYLE, BROWN & ENERSEN, LLP
By: /s/
A Member of the Firm
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of our report dated March
18, 1999, with respect to the financial statements of Adatom, Inc. as of
December 31, 1998 and 1997, and for each of the years then ended and for the
period from inception, October 10, 1996 to December 31, 1998.
/s/
IRELAND SAN FILIPPO, LLP
December 27, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement on
this Form S-8, relating to the 1997 Stock Option Plan, 1999 Incentive and
Non-qualified Stock Option Plan, the Option Plan for Former Executive, the 1999
Stock Bonus Plan, the Employment Agreement Modification Plan and the 1997
Employee Warrant Plan, of our report dated November 19, 1999 on our audit of the
financial statements of HealthCore Medical Solutions, Inc. included in the
Company's Annual Report of Form 10-KSB for the year ended September 30, 1999.
/s/ Richard A. Eisner & Company, LLP
Florham Park, New Jersey
December 27, 1999
