<PAGE> 1
PROSPECTUS SUPPLEMENT FILED UNDER RULE 424(B)(3)
REGISTRATION NUMBER 333-91619
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PROSPECTUS SUPPLEMENT NO. 1, DATED MAY 22, 2000
(TO PROSPECTUS, DATED APRIL 7, 2000)
MD2PATIENT, INC.
34,000,000 SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK
This prospectus supplement to the prospectus dated April 7, 2000 relates to
our offering of up to 34,000,000 shares of Series B Convertible Preferred Stock,
which is being conducted simultaneously with an offering of up to 2,000,000
shares of Series A Convertible Preferred Stock and Warrants to purchase up to
4,000,000 shares of Series A Convertible Preferred Stock.
-------------------------
This prospectus supplement should be read in conjunction with the
prospectus dated April 7, 2000, which is to be delivered with this prospectus
supplement. The information in this prospectus supplement updates and supercedes
certain information contained in the prospectus dated April 7, 2000.
-------------------------
INVESTING IN THE SERIES B CONVERTIBLE PREFERRED STOCK INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THE PROSPECTUS DATED
APRIL 7, 2000 TO WHICH THIS SUPPLEMENT RELATES.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
(WR HAMBRECHT & CO. LOGO)
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<PAGE> 2
Persons in Iowa and West Virginia are now authorized to purchase our
securities under this prospectus supplement and the prospectus dated April 7,
2000.
On May 22, 2000, MD2patient, Inc. filed with the Securities and Exchange
Commission the attached Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2000.
<PAGE> 3
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
<TABLE>
<C> <S>
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
.
</TABLE>
COMMISSION FILE NUMBER 333-91619
MD2PATIENT, INC.
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
GEORGIA 62-1798114
(state or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
501 CORPORATE CENTRE DRIVE, SUITE 200,
FRANKLIN, TENNESSEE 37067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 383-8400
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [X]
The number of shares outstanding of the issuer's only class of Common
Stock, $0.01 par value, as of March 31, 2000 was 24,347,500.
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<PAGE> 4
MD2PATIENT, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS........................................ 1
Condensed Balance Sheets at December 31, 1999 and March 31,
2000 (Unaudited)............................................ 1
Condensed Statement of Operations for the three month period
ended March 31, 2000 (Unaudited)............................ 2
Condensed Statement of Cash Flows for the three month period
ended March 31, 2000 (Unaudited)............................ 3
Notes to Condensed Financial Statements..................... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................... 6
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK... 8
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS........................................... 9
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS................... 9
ITEM 3. DEFAULTS UPON SENIOR SECURITIES............................. 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 9
ITEM 5. OTHER INFORMATION........................................... 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................ 10
</TABLE>
i
<PAGE> 5
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
MD2PATIENT, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1999 MARCH 31, 2000
----------------- --------------
(AUDITED) (UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $4,025,058 $ 2,364,447
Prepaid and other......................................... 107,168 223,719
---------- -----------
Total current assets................................... 4,132,226 2,588,166
Deferred offering costs................................... 184,328 344,407
Computer software costs................................... 259,283 1,086,957
Equipment and furniture, net.............................. 92,073 180,843
---------- -----------
Total assets........................................... $4,667,910 $ 4,200,373
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................... $ 257,292 $ 410,000
Deferred subscription fees................................ 80,333 324,165
---------- -----------
Total current liabilities.............................. 337,625 734,165
Deferred subscription fees................................ 144,667 648,428
---------- -----------
Total liabilities...................................... 482,292 1,382,593
---------- -----------
STOCKHOLDERS' EQUITY:
Convertible preferred stock, $.01 par value, 300,000,000
shares authorized:
Series A Convertible; 50,000,000 shares designated;
5,000,000 shares issued and outstanding (liquidation
preference of $5,000,000 at December 31, 1999)....... 50,000 50,000
Series B Convertible; 50,000,000 shares designated; no
shares issued and outstanding........................ -- --
Common stock, $.01 par value, 300,000,000 shares
authorized; 10,000,000 and 24,347,500 shares issued and
outstanding at December 31, 1999 and March 31, 2000,
respectively........................................... 100,000 243,475
Unearned stock grant compensation......................... -- (127,500)
Additional paid-in capital................................ 4,686,087 4,686,087
Deficit accumulated during development stage.............. (650,469) (2,034,282)
---------- -----------
Total stockholders' equity............................. 4,185,618 2,817,780
---------- -----------
Total liabilities and stockholders' equity............. $4,667,910 $ 4,200,373
========== ===========
</TABLE>
1
<PAGE> 6
MD2PATIENT, INC.
CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 2000
--------------
(UNAUDITED)
<S> <C>
REVENUE..................................................... $ --
OPERATING EXPENSES:
Selling, general and administrative....................... (1,408,839)
Loss from operations...................................... (1,408,839)
-----------
Interest income........................................... 25,026
-----------
Net loss............................................... $(1,383,813)
===========
Basic and diluted net loss per share........................ $ (0.07)
===========
Basic and diluted weighted average shares outstanding....... 20,924,669
===========
</TABLE>
2
<PAGE> 7
MD2PATIENT, INC.
CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, 2000
--------------
(UNAUDITED)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(1,383,813)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.......................... 15,000
Stock grant compensation............................... 15,975
Change in assets and liabilities:
Prepaid and other.................................... (116,551)
Accounts payable and accrued expenses................ 152,708
Deferred subscription fees........................... 747,593
-----------
Net cash used in operating activities............. (569,088)
CASH FLOWS USED BY INVESTING ACTIVITIES:
Capital expenditures...................................... (931,444)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred offering costs................................... (160,079)
-----------
Net cash used in financing activities............. (160,079)
-----------
Net decrease in cash.............................. (1,660,611)
-----------
Cash, beginning of period................................. 4,025,058
-----------
Cash, end of period....................................... $ 2,364,447
===========
</TABLE>
3
<PAGE> 8
MD2PATIENT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. ORGANIZATION AND NATURE OF BUSINESS
MD2patient, Inc. ("the Company") is a Georgia corporation which was incorporated
and capitalized by Heritage Group LLC ("Heritage") in July 1999 under the name
of MDpathways, Inc. The Company changed its name to MD2patient, Inc. in December
1999. The Company is developing a web site to provide access to selected on-line
healthcare content and services and to develop web pages for its physician
subscribers.
MD2patient, Inc. is in the development stage as its operations principally
involve the building of its web site infrastructure, market analysis, capital
raising and other business planning activities. No revenue has been generated.
Since MD2patient, Inc. is in the development stage, the accompanying financial
statements should not be regarded as typical for normal operating periods.
2. BASIS OF PRESENTATION
The condensed financial statements included herein are unaudited and reflect all
adjustments, consisting only of normal recurring adjustments, which in the
opinion of management are necessary to fairly state the Company's financial
position, results of operations and cash flows for the periods presented. These
financial statements should be read in conjunction with the Company's financial
statements and notes thereto for the year ended December 31, 1999, which are
contained in the Company's Registration Statement filed on Form S-1 with the
Securities and Exchange Commission (File No. 333-91619). The results of
operations for the three-month period ended March 31, 2000, are not necessarily
indicative of results that may be expected for any other interim period or for
the full fiscal year.
3. NET LOSS PER SHARE
Basic net loss per share is computed by dividing the net loss available to
common shareholders for the period by the weighted average number of common
shares outstanding during the period. Diluted loss per share is computed by
dividing the net loss for the period by the weighted average number of common
and common equivalent shares outstanding during the period. Common equivalent
shares, composed of incremental common shares issuable upon an assumed
conversion of outstanding Series B Convertible Preferred Stock and an assumed
exercise of outstanding Warrants, are included in diluted net loss per share
only when these shares are dilutive. The total number of shares excluded from
the calculations of dilutive loss per share was 6,000,000 at March 31, 2000.
4. EMPLOYMENT AGREEMENTS
During January 2000, the Company entered into employment agreements with five
executive officers. The agreements generally continue until terminated with
notice by the Company or the executive, and provide for severance payments under
certain circumstances. The agreements include a covenant against competition
with the Company, which extends for a period of one year after termination. As
of January 1, 2000, if all employees under contract were to be terminated
without good cause (as defined) under these contracts, the Company's liability
would be approximately $950,000.
5. 2000 LONG-TERM INCENTIVE PLAN
Effective January 13, 2000, the Board of Directors and shareholders approved the
2000 Long-term Incentive Plan which provides for the grant of nonqualified and
incentive stock options, stock appreciation rights, performance shares,
restricted stock and other stock-based awards. There are 10,000,000 shares
available under this plan for future grants at March 31, 2000. Under the
provisions of the 2000 plan, incentive stock options are to be granted at an
exercise price of not less than fair market value of our Common Stock on the
date of grant, and nonqualified stock options are to be granted at an exercise
price not less than 85% of the
4
<PAGE> 9
fair market value of our Common Stock on the date of grant. To date no grants
have been made under this plan.
6. RESTRICTED STOCK GRANTS
During January, February and March 2000, the Company granted 13,750,000
restricted shares of common stock to certain of its employees and directors.
Shares were awarded in the name of the employee, who has all rights of a
shareholder, subject to certain restrictions on transferability and a risk of
forfeiture. The forfeiture provisions expire monthly, over a period not to
exceed five years. Restricted shares subject to forfeiture provisions have been
recorded as unearned stock grant compensation totaling $137,500 in stockholders'
equity and, accordingly, $10,000 has been recognized as compensation expense for
the three months ending March 31, 2000.
7. STOCK GRANTS
During February 2000, the Company granted 597,500 shares of common stock to
seven individuals who had been instrumental in the Company's initial start-up
activities during 1999. Accordingly, $5,975 of compensation expense was recorded
relating to these grants.
5
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
We are a development stage company recently formed to develop and operate a
web site to provide access to selected on-line healthcare content and services
to our physician subscribers and their patients. We recently completed the
initial development and launch of our web site during April 2000, and have begun
to offer limited Internet services.
ANTICIPATED SOURCES OF REVENUE
Our web site became operational during April 2000. We anticipate that we
will generate revenue primarily from the following sources:
- Fees paid by physician subscribers;
- Fees paid by web vendors in connection with installing and managing
content and services on or through our site;
- Advertising revenue from businesses desiring to access our physician
subscribers and their patients;
- Fees paid by vendors in connection with business-to-business e-commerce
transactions generated through our site;
- Fees paid by vendors in connection with business-to-consumer e-commerce
transactions generated through our site; and
- Fees paid by pharmaceutical research and drug manufacturing companies in
connection with medical research and/or participation in on-line clinical
drug trials.
Physician Subscriptions. We plan to build and to retain a physician
subscriber base by offering an evolving array of content and services selected
by our physician specialty panels. Subscriptions will be sold for three years of
service to be paid in a single lump sum of $1,000 or three annual installments
of $400. As of March 31, 2000, we had 1,386 physician subscribers, of which 139
received free subscriptions in connection with their purchase of shares of
Series A Convertible Preferred Stock in our November 1999 private placement.
Web Vendors. For an ongoing fee plus participation in revenues generated
from traffic originating from our site, we anticipate entering into agreements
with vendors to install and manage selected healthcare content and services on
or through our site with links to their site. Such content and services will
have been reviewed and selected by our physician specialty panels for inclusion
on or through our site. As of May 15, 2000, we had entered into one agreement
with a vendor, Healthwise, Incorporated, to provide content for our site.
However, our agreement with Healthwise requires us to pay Healthwise a license
fee for the use of their content and does not provide for any fees or other
revenues payable to us.
Advertising. The key factors in attracting advertising revenue is the size
of our physician subscriber base, our ability to capture demographic information
valuable to advertisers, and the frequency with which our web site is accessed.
In connection with the development of our web site, we are also developing the
databases necessary to capture and present the information that we believe will
be particularly valuable to advertisers. As of May 15, 2000, we have not entered
into any relationships or agreements with advertisers.
Business-to-Business e-commerce Transactions. In connection with the
development of our web site, we plan to offer our physician subscribers and
their practice staffs content and services that will assist them in the
day-to-day management and operation of their practices. We believe this category
of services will allow us to generate additional revenues from
business-to-business e-commerce transactions originating from our site and
enhance our ability to improve the efficiency of our physician subscribers'
practices. Some of the services
6
<PAGE> 11
offered through our site will be targeted to all physicians, while other
services will be targeted to specific medical specialties.
Business-to-Consumer e-Commerce Transactions. We believe our physician
subscribers will include a large number of affluent consumers with significant
disposable income which will be attractive to vendors. We will attempt to secure
relationships with selected vendors that desire to offer consumer products and
services to our physician subscribers through our site. We believe we will be
able to structure these relationships in a manner that will allow us to charge
access fees and otherwise participate in the revenues generated from such
transactions.
We also believe that the patients of our physician subscribers will
represent a consumer base that will be attractive to vendors of consumer
healthcare products and services. Accordingly, we will seek to generate
additional revenue by charging access fees and/or a percentage of the revenues
generated by transactions between vendors and patients that occur through our
site.
Medical Research and Clinical Drug Trials. We plan to promote our
physician subscriber base to pharmaceutical research and drug manufacturing
companies interested in enrolling physicians in on-line surveys and clinical
drug trials. If we are successful in these efforts, we believe participating
companies will pay us a fee for information generated from our database, access
to our subscribing physicians and advertisements of their surveys and drug
trials on our web site. As of May 15, 2000, we have not entered into any
agreements with pharmaceutical research or drug manufacturing companies.
CURRENT AND ANTICIPATED FINANCIAL COMMITMENTS
Beginning in late March 2000, we accelerated our efforts to implement our
business plan and our associated spending. Arthur Andersen LLP continues to
assist us in developing our technical infrastructure and web site. In addition,
we continue to lease from Arthur Andersen the servers and related computer
hardware and equipment that support our web site. Presently, these leases are on
a month-to-month basis and these costs are expensed as incurred. Under our
arrangements with Arthur Andersen, costs are expected to average $320,000 per
month until such time as the Company takes the programming and maintenance
functions in-house.
As of May 15, 2000, we employed 52 persons, including senior personnel who
supervise operations, content management and information services. We also
anticipate a need in the near future to hire additional personnel, especially in
the area of field operations to service our physician subscribers and their
offices.
As a result of these activities, we anticipate incurring substantial
additional costs and expenses related to the continued development of our web
site and the hiring of qualified personnel. Future costs and expenses will
include sales and marketing expenses incurred to attract physician subscribers
to our web services, ongoing technology costs to enhance the content and
services available to our physician subscribers and their patients, and costs
associated with field operations which service our physicians and their offices.
LIQUIDITY AND CAPITAL RESOURCES
During 1999, we raised $5,000,000 through a private placement of 5,000,000
shares of our Series A Convertible Preferred Stock and warrants. We also raised
$100,000 through the private placement of Common Stock to Heritage Group, LLC.
As of March 31, 2000, our principal commitments consisted of our agreements with
Arthur Andersen, our web site consultants, and the costs and expenses incurred
in connection with the private placements and our currently on-going public
offering registered on Form S-1 (File No. 333-91619). We believe that we have
sufficient existing capital resources to maintain our presently existing web
site for the next 12 months. Our web site presently includes physician web
pages, which allow patients access to information relating to individual
physician practices. The web site also makes limited content and services
available to our physician subscribers, including the development of customized
web pages and links to medical societies and various clinical information
databases. If we are successful in selling at least the minimum number of shares
of Series B Convertible Preferred Stock available in our ongoing
7
<PAGE> 12
public offering, we believe we will have sufficient capital to meet our
anticipated long-term working capital needs.
While the minimum net proceeds of our on-going public offering are expected
to be sufficient to meet our anticipated long-term working capital needs,
additional capital could be required if unexpected costs arise or if we seek to
enhance the content or services to be provided through our web site or
accelerate the implementation of our business plan through the acquisition of
complementary businesses. If additional capital requirements arise, we may need
to raise additional funds sooner than expected. If we raise additional funds
through the issuance of equity or convertible debt securities, these securities
may have rights, preferences or privileges that are superior to those of the
shares available in this offering and may result in substantial dilution to
existing shareholders. If additional funding is needed, there is no assurance
that such funding will be available on terms acceptable to us, if at all.
Our losses from inception to March 31, 2000 total $2,034,282, consisting
principally of costs incurred in the form of direct expenses primarily
consisting of payroll, legal and consulting fees. These costs relate to the
development of our web site, sales and marketing expenses incurred to attract
physician subscribers, and our capital-raising activities to date.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
8
<PAGE> 13
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
(D) USE OF PROCEEDS
The effective date of our first registration statement, filed on Form S-1
under the Securities Act of 1933, as amended (File No. 333-91619), and relating
to the initial public offering of (i) Series B Convertible Preferred Stock, (ii)
Series A Convertible Preferred Stock, and (iii) Warrants to purchase Series A
Convertible Preferred Stock, was April 5, 2000. The following securities may be
sold pursuant to the registration statement: (a) a minimum of 5,000,000 shares
of Series B Convertible Preferred Stock and a maximum of 34,000,000 shares of
Series B Convertible Preferred Stock, (b) a maximum of 6,000,000 shares of
Series A Convertible Preferred Stock (including the shares for which the
Warrants are exercisable), and (c) Warrants to purchase a maximum of 4,000,000
shares of Series A Convertible Preferred Stock. All payments for the shares and
Warrants are being deposited into an escrow account at SunTrust Bank until we
receive payments for at least 5,000,000 shares of Series B Convertible Preferred
Stock. If we do not receive payments for at least 5,000,000 shares of Series B
Convertible Preferred Stock by December 31, 2000, we will terminate the offering
and promptly return all payments plus interest, if any.
The offering commenced on April 7, 2000 and has not been terminated. We
have engaged W. R. Hambrecht & Company, LLC to assist in the sale of shares and
Warrants in the offering. The minimum aggregate offering price for the Series B
Convertible Preferred Stock is $5,000,000 and the maximum aggregate offering
price for the Series B Convertible Preferred Stock is $34,000,000. The aggregate
offering price for the Series A Convertible Preferred Shares and Warrants to
purchase shares of Series A Convertible Preferred Stock is $6,000,000 (including
the exercise price of the Warrants). None of the shares of Series B Convertible
Preferred Stock, Series A Convertible Preferred Stock or Warrants have been sold
to date and, therefore, we have not yet received any offering proceeds.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Acting by unanimous written consent in lieu of a meeting, effective January
13, 2000, the holder of 100% of our issued and outstanding shares of Common
Stock approved and adopted the MD2patient, Inc. 2000 Long-Term Incentive Plan
(the "2000 Plan").
VOTED FOR: 10,000,000 VOTED AGAINST: none
Acting by unanimous written consent in lieu of a meeting, effective January
13, 2000, the holder of 100% of our issued and outstanding shares of Common
Stock approved an amendment to our Articles of Incorporation to change the rate
at which shares of Series B Convertible Preferred Stock automatically convert
into shares of Series A Convertible Preferred Stock (or into Common Stock if a
Qualified Public Offering has occurred on or before the date of conversion) from
a rate of one-fifth per year to a rate of one-third per year on each anniversary
of the date of their issuance.
VOTED FOR: 10,000,000 VOTED AGAINST: none
Acting by written consent in lieu of a meeting, effective January 13, 2000,
holders of 64% of all of our issued and outstanding shares of Series A
Convertible Preferred Stock approved an amendment to our Articles of
Incorporation to change the rate at which shares of Series B Convertible
Preferred Stock automatically convert into shares of Series A Convertible
Preferred Stock (or into Common Stock if a Qualified Public
9
<PAGE> 14
Offering has occurred on or before the date of conversion) from a rate of
one-fifth per year to a rate of one-third per year on each anniversary of the
date of their issuance.
CONSENTED: 3,200,000 DID NOT CONSENT: 1,800,000
ITEM 5. OTHER INFORMATION.
In April 2000, Joseph B. Crace, our Chief Executive Officer, assumed the
additional office of President from John E. Blount. At that time, Mr. Blount
became our Executive Vice President of Physician Services and retained his
position as a member of our Board of Directors. Mr. Crace has also been elected
to serve as an additional member of our Board of Directors, bringing the overall
size of our Board of Directors to seven.
Nicholas A. Balog, 44, joined us on March 8, 2000 as Executive Vice
President of Operations. From March 1990 until March 2000, Mr. Balog worked at
PhyCor, Inc., a publicly traded physician practice management company in
Nashville, Tennessee, where he served as Vice President of operations and was
responsible for strategic planning, operations and operational profitability and
achieving and maintaining positive physician, hospital and third party payer
relationships for several affiliated multispecialty medical groups. Prior to
that role he was Executive Director for affiliated multispecialty medical group
practices in Florida and Virginia. From 1980 until 1990, he served as Executive
Vice President with Choate Symmes Health Services, Inc., Woburn, Massachusetts,
a health system that included several hospitals and a comprehensive ambulatory
care facility. From 1978 until 1980 he served as Assistant Administrator for the
Easter Seal Rehabilitation Center of Eastern Fairfield County in Bridgeport,
Connecticut. Mr. Balog holds a Master of Public Health Degree from Yale
University and a B.S. in Business Administration from Bryan College in Rhode
Island. Mr. Balog has 23 years of health industry experience.
We have entered into an employment agreement with Mr. Balog, which contains
substantially the same terms as the employment agreements we have with our other
executive officers. The initial term of Mr. Balog's employment agreement expires
on March 8, 2002, subject to automatic renewal for additional one-year terms. We
may terminate the agreement at any time. In the event that we terminate the
agreement without "cause" (as defined in the agreement), Mr. Balog will continue
to receive his then current salary as a severance benefit for a period of one
year following such termination. "Cause" includes fraud, misappropriation,
embezzlement, engaging in competition with us and improperly disclosing our
proprietary information. The employment agreement prohibits Mr. Balog from
competing with us or disclosing our proprietary information for a period of 12
months following termination of employment. The agreement entitles Mr. Balog to
an annual base salary of $175,000 and provides that our Board of Directors may
grant Mr. Balog a bonus from time to time. In addition, the agreement provides
that Mr. Balog will receive a restricted stock award of 500,000 shares of common
stock. Pursuant to this requirement, we intend to enter into a restricted stock
award agreement with Mr. Balog with respect to the issuance of such shares. The
restricted stock award vests over a three-year period that commenced March 8,
2000. The consideration for the issuance of these shares is future services that
we expect to receive from Mr. Balog. The offer and sale of these shares is
deemed to be exempt from registration under the Securities Act of 1933 in
reliance on Rule 701 promulgated under such Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
Exhibit 10.1 [Intentionally Left Blank]
Exhibit 10.2 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and John E. Blount (Incorporated by
reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.3 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and John Thomas A. Gallagher
(Incorporated by reference to Exhibit 10.3 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
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<PAGE> 15
Exhibit 10.4 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and Albert Rodewald (Incorporated by
reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.5 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and James G. Petway,
Jr.(Incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1, File No.
333-91619)
Exhibit 10.6 MD2patient, Inc. 2000 Long-Term Incentive Plan (Incorporated
by reference to Exhibit 10.6 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.7 Restricted Stock Award Agreement dated as of January 14, 2000
by and between MD2patient, Inc. and John E. Blount
(Incorporated by reference to Exhibit 10.7 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.8 Restricted Stock Award Agreement dated as of January 14, 2000
by and between MD2patient, Inc. and Thomas A. Gallagher
(Incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.9 Restricted Stock Award Agreement dated as of January 14, 2000
by and between MD2patient, Inc. and Albert Rodewald
(Incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.10 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and James G. Petway,
Jr. (Incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1, File No.
333-91619)
Exhibit 10.11 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and Rock A. Morphis
(Incorporated by reference to Exhibit 10.11 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.12 Employment Agreement dated as of January 24, 2000 by and
between MD2patient, Inc. and Joseph B. Crace (Incorporated
by reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.13 Restricted Stock Award Agreement dated as of February 11,
2000 by and between MD2patient, Inc. and Joseph B. Crace
(Incorporated by reference to Exhibit 10.13 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.14 Employment Agreement dated as of March 8, 2000 by and
between MD2patient, Inc. and Nicholas A. Balog
Exhibit 27.1 Financial Data Schedule (for SEC use only)
(B) REPORTS ON FORM 8-K
None.
11
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MD2PATIENT, INC.
/s/ JOSEPH B. CRACE
--------------------------------------
Joseph B. Crace
President and Chief Executive Officer
/s/ JAMES G. PETWAY, JR.
--------------------------------------
James G. Petway, Jr.
Executive Vice President and Chief
Financial Officer
May 22, 2000
12
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
- -------------- -----------------------
<S> <C>
Exhibit 10.1 [Intentionally Left Blank]
Exhibit 10.2 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and John E. Blount (Incorporated by
reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.3 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and John Thomas A. Gallagher
(Incorporated by reference to Exhibit 10.3 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.4 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and Albert Rodewald (Incorporated
by reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.5 Employment Agreement dated as of January 1, 2000 by and
between MD2patient, Inc. and James G. Petway,
Jr.(Incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1, File No.
333-91619)
Exhibit 10.6 MD2patient, Inc. 2000 Long-Term Incentive Plan (Incorporated
by reference to Exhibit 10.6 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.7 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and John E. Blount
(Incorporated by reference to Exhibit 10.7 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.8 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and Thomas A. Gallagher
(Incorporated by reference to Exhibit 10.8 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.9 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and Albert Rodewald
(Incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.10 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and James G. Petway,
Jr. (Incorporated by reference to Exhibit 10.10 to the
Company's Registration Statement on Form S-1, File No.
333-91619)
Exhibit 10.11 Restricted Stock Award Agreement dated as of January 14,
2000 by and between MD2patient, Inc. and Rock A. Morphis
(Incorporated by reference to Exhibit 10.11 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.12 Employment Agreement dated as of January 24, 2000 by and
between MD2patient, Inc. and Joseph B. Crace (Incorporated
by reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1, File No. 333-91619)
Exhibit 10.13 Restricted Stock Award Agreement dated as of February 11,
2000 by and between MD2patient, Inc. and Joseph B. Crace
(Incorporated by reference to Exhibit 10.13 to the Company's
Registration Statement on Form S-1, File No. 333-91619)
Exhibit 10.14 Employment Agreement dated as of March 8, 2000 by and
between MD2patient, Inc. and Nicholas A. Balog.
Exhibit 27.1 Financial Data Schedule (for SEC use only)
</TABLE>
