As filed with the Securities and Exchange Commission on May 8, 1996
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MEDICAL DYNAMICS, INC.
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(Exact name of Registrant as specified in charter)
Colorado 84-0631765
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.
Van A. Horsley, President
99 Inverness Drive East 99 Inverness Drive East
Englewood, Colorado 80112 Englewood, Colorado 80112
(303) 790-2990 (303) 790-2990
(Address, including zip code (Name, address, including
and telephone number, including zip code and telephone
area code, of registrant's number, including area
principal executive offices) code, of agent for service)
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It is requested that copies of all correspondence be sent to:
Herrick K. Lidstone, Jr., Esq.
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
1400 Glenarm Place
Denver, Colorado 80202
Telephone Number (303) 571-1400
Facsimile Number (303) 595-3159
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Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Proposed
Title of each Amount Maximum Maximum Amount of
class of to be to be offering aggregate registration
registered registered per unit offering price fee (1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 2,243,131 $3.75 $8,411,741 $2,900.60
$.001 par value shares
(1) Registration fee is based on the closing sale price reported by NASDAQ on May 3, 1996 (a date within five
business days prior to the filing hereof) pursuant to Rule 457(b)(1).
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay
its effective date until the registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said section 8(a), may determine.
-i-
</TABLE>
<PAGE>
PROSPECTUS
MEDICAL DYNAMICS, INC.
2,243,131 Shares of Common Stock
An aggregate of 2,243,131 shares ("Shares") of Common Stock, $.001 par
value (the "Common Stock"), of Medical Dynamics, Inc. (the "Company) is being
offered hereby by persons who hold shares of restricted Common Stock or who hold
options or warrants to acquire shares of restricted Common Stock (the "Selling
Shareholders") through broker/dealers or in private transactions (see "Plan of
Distribution"). Certain of the options are not currently exercisable. See
"Recent Events." All proceeds from the sale of the Shares will be for the
benefit of the Selling Shareholders; only proceeds from the exercise of certain
options and warrants (if any) will accrue to the Company.
THESE SECURITIES INVOLVE A HIGH
DEGREE OF RISK. (See "RISK FACTORS.")
The Common Stock is traded in the over-the-counter market and is quoted on
the National Association of Securities Dealers Automated Quotation Service
("NASDAQ-Small Cap") under the symbol "MEDY." On May 3, 1996, the closing bid
and asked prices of the Common Stock, as reported by NASDAQ, were $3.75 and
$3.88 per share, respectively.
The expenses related to the filing of the registration statement to which
this offering relates are being paid by the Company.
The Shares will be offered by the Selling Securityholders through
underwriters, dealers or brokers in the over-the-counter market. The Shares may
also be sold in privately negotiated transactions. Sales through dealers or
brokers will be made with customary commissions being paid by the Selling
Shareholders. Payments to persons assisting the Selling Shareholders with
respect to privately negotiated transactions will be negotiated on a
transaction-by-transaction basis. See "Plan of Distribution." The expenses
related to the filing of the registration statement to which this offering
relates are being paid by the Company, although any commissions and/or discounts
on the sale of shares offered by the Selling Shareholders will be paid by the
Selling Shareholders.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<PAGE>
No underwriter has been engaged for this offering. No proceeds from the
sale of the shares offered will be placed in escrow and no proceeds will be
accepted until the Company is able to qualify the sale of securities in the
state in which the exercising option-holder resides. All proceeds from the
exercise of the options and warrants, if any, will be delivered to the Company.
The Company expects to incur offering expenses estimated at $28,000 for
printing, legal, accounting, transfer agent and miscellaneous expenses.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE TO
ANY PERSON IN ANY STATE, TERRITORY, OR POSSESSION OF THE UNITED STATES IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED BY THE LAWS THEREOF, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
The date of this Prospectus is May 8, 1996
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("the 1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The Company's Common Stock is quoted on
NASDAQ and therefore, copies of such documents and other information are
provided to the National Association of Securities Dealers, Inc. Such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission, at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices in Chicago, Room 1204 Everett McKinley Dirksen Building, 219 South
Dearborn Street, Chicago, Illinois 60604; in New York, 7 World Trade Center, New
York, New York 10048; and in Los Angeles, 5757 Wilshire Boulevard, Los Angeles,
California 90036. Copies of such materials can be obtained at prescribed rates
by written request addressed to the Commission, Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended,
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto, as permitted by the rules and regulations of the Commission.
For further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement, including the exhibits
filed or incorporated as a part thereof, copies of which can be inspected at, or
obtained at prescribed rates from, the Public Reference Section of the
Commission at the address set forth above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission are incorporated into
this Prospectus by reference:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1995.
(2) The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended December 31, 1995.
(3) All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act after the date hereof and prior to
the termination of the offering of the Shares.
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<PAGE>
Each of the foregoing documents shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing such documents.
Any statement contained herein or in any documents incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that statements contained herein,
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any and all of the documents
incorporated by reference herein (not including exhibits to those documents,
unless such exhibits are specifically incorporated by reference into the
information that the Prospectus incorporates). Requests for such documents
should be directed to Shareholder Relations, Medical Dynamics, Inc., 99
Inverness Drive, Englewood, Colorado 80112, telephone (303) 790-2990.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the information,
including the financial statements, referred to elsewhere in this Prospectus.
The Company
The Company was incorporated under the laws of the State of Colorado on
March 23, 1971, and began operations in 1973 with the distribution of various
medical products. In August 1981, the Company introduced its first
self-manufactured medical video camera. Thereafter, the Company has continued to
develop and manufacture its own camera systems, incorporating the newest
technological advances. Since 1981, the Company has introduced many different
models of the same basic camera, each technologically superior to prior models.
Since 1986, the Company has substantially redesigned its product line to
increase reliability, and in one product line, take advantage of advancements in
the utilization of fiber optics technology.
The Company also markets and manufactures the Model 5500 Electronic Video
Laparoscope ("EVL") which utilizes the latest imaging processing techniques
without the need for multiple optical coupling lenses or separate light source
enhancement. This product was first introduced in October 1992.
In 1987, the Company entered into an exclusive license arrangement with its
Chairman to acquire the manufacturing and marketing rights to its Model 5990
Optical Catheter(TM) System (the "System"). Management believes that the patents
related to the System, which are covered by the exclusive license arrangement,
may have strategic importance in the utilization of fiber optics in diagnosis
and surgery. Due to the small size of the micro-invasive instrument and the
System's capability for monitoring and measuring pressure, temperature,
capillary blood flow and other functions through the same catheter, some of
which is an integral part of the viewing system, management believes its System
is technologically superior to other medical camera systems available on the
market.
In addition to the EVL and the System, the Company is marketing numerous
other medical devices, including its model 5940, 5960 and 5970 video cameras as
well as a variety of peripherals. (See "Item 1 - Business" in the Company's
Annual Report on Form 10- KSB for the fiscal year ended September 30, 1995,
which report is incorporated herein by reference).
The Company's executive and administrative offices and manufacturing plant
are located at 99 Inverness Drive East, Englewood, Colorado, 80112, and its
telephone number is (303) 790- 2990.
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<PAGE>
The Offering
Exercise Price per Option....................... Varies, from $1.00 per share
to $4.775 per share
Securities offered.............................. 2,198,131 shares of Common
Stock underlying the
Options. Each Option
entitles the holder thereof
to purchase one share of
Common Stock.
45,000 shares of restricted
Common Stock
(See "Description of Securities.")
Shares of Common Stock outstanding:
At March 31, 1996...................... 6,885,411 shares (3)
After exercise of the
Options (1) (3)...................... 9,093,542 shares
Estimated net proceeds
to the Company (1)(2)................ $5,945,827
- ----------
(1) Assumes the exercise of all of the Options. There can be no assurance that
any or all of the Options will be exercised.
(2) Before deduction of the expenses of this offering, which are estimated at
approximately $28,000.
(3) Does not include, 35,000 shares to be issued to High Tech Medical
Instrumentation, Inc., a selling shareholder herein, upon completion of a
license agreement and OEM Agreement between HTMI and the Company, if such
agreement is completed. See "Recent Events."
6
<PAGE>
Securities Being Offered
The Selling Shareholders are offering to the public an aggregate of
2,243,131 shares of Medical Dynamics, Inc. Common Stock. The Company will
receive proceeds from the exercise of the options and warrants (if any are
exercised), but will receive no proceeds from the sale of the Shares being
offered hereby.
Risk Factors
This offering involves substantial risks, and prospective investors should
understand that they may lose all or part of their investment. Specific risk
factors include, but are not limited to, lack of sustained profitability,
product liability, substantial industry competition, reliance on significant
customers, dependence on management, and governmental regulation by the Food and
Drug Administration. (See "Risk Factors.")
7
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, among other factors, the
other considerations relating to the Company and this offering set forth below.
Lack of Profitability. The Company has a history of net operating losses,
that when accumulated total, $14,291,000 through December 31, 1995. This has
resulted in working capital shortages from time to time. The Company can give no
assurance that it will be able to operate profitably in the future. 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 regulatory environments in which the Company
operates, the problems related to research and development of new products
subject to Food and Drug Administration ("FDA") and other government approvals
and regulations, and substantial competition from other companies as to those
products. (See the Financial Statements and related notes included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended September 30,
1995, and Form 10-QSB for the quarter ended December 31, 1995, which report is
incorporated herein by reference.)
1. Product Liability. The Company could be subjected to claims for personal
injuries resulting from the use of its products. In the event any claims for
substantial amounts were successful, they could substantially affect the
Company's viability. Although the Company does have product liability insurance,
there can be no assurance that the amount of coverage would be sufficient to
cover any potential claims. In the event coverage proves insufficient, the
Company's viability would be materially adversely affected.
2. No Dividends Paid or Contemplated. No dividends have been paid by the
Company in the past and dividends are not contemplated in the foreseeable
future. Dividends will be dependent upon earnings of the Company, financial
needs, and other similar unpredictable factors and will be declared solely at
the discretion of the Board of Directors. Investors who anticipate the need of
either immediate or future income by way of dividends from their investment
should refrain from the purchase of shares offered hereby.
3. Need for Additional Financing. Although management believes that the
capital available to the Company is sufficient to fund its short-term
operations, the Company will eventually have to finance its operations out of
earnings. The Company has not generated earnings in the past and there can be no
assurance that the Company will be able to do so in the future. It is impossible
to predict what additional expenses will be incurred beyond those contemplated
since research, development, and marketing programs frequently involve
unanticipated expenditures. In such event, the Company would seek financing
through (1) sale of additional equity securities, which would dilute the
ownership interest of prior shareholders, including investors in this Offering
or (2) debt financing, which would result in interest expense and risks of loss
of assets of the Company in the event of default.
8
<PAGE>
A majority of the Company's products are manufactured and sold under a
license agreement with the Chairman of the Company's Board of Directors. This
license agreement provides for minimum annual royalties of $120,000. This cash
payment was foregone for the fiscal year ended September 30, 1996 and replaced
with 120,000 of the Registrants common stock options at $1.00 per share. Should
the Company be unable to pay the required royalties beginning October 1, 1996,
then under the terms of the licensing agreement the majority of patent rights
under the agreement to manufacture and sell the Company's products could revert
to the Chairman of the Board of Directors, unless further compensatory
arrangements are made.
4. Going Concern Qualification. It should be noted that the Company's
auditors stated in their report on the Company's financial statements for the
year ended September 30, 1995, that the Company's recurring net losses from
operations and the lack of assurance that the Company will be able to obtain
project financing raise substantial doubt about the entity's ability to continue
as a going concern.
5. Competition. The Company's operations and product lines are subject to a
high level of competition from foreign, as well as domestic, manufacturers of
color medical video cameras and other medical devices which are currently
manufactured and sold by the Company, or which the Company may develop in the
future. Some competitors are affiliated with large companies with substantial
economic and personnel resources which greatly exceed those of the Company.
There can be no assurance that the Company will be able to compete successfully
with other companies to achieve sustained profitable operations. (See "Item 1 -
Business" in the Company's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1995, which report is incorporated herein by reference.)
6. New Line of Business. The Company has recently entered into a new line
of business involving the manufacturing of intra-oral dental cameras, and plans
sales of the cameras on an OEM basis. There can be no assurance that the Company
will be able to market these new products successfully. See "Recent Events,"
below.
7. Potential Conflicts of Interest. There are significant conflicts of
interest in the operation and management of the Company, including the purchase
by the Company of certain equipment and patents from its directors and executive
officers, granting of royalties, loans made available to the Company through its
Chairman, and the employment by the Company of sons of two of the Company's
directors. These transactions were not negotiated at arms' length, although the
Board of Directors believes that all of these transactions were fair to the
Company. (See "Item 1 - Business" and "Item 13 - Certain Relationships and
Related Transactions" in the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1995, which report is incorporated herein by
reference.)
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<PAGE>
8. Dependence on Principal Customers. The Company is largely dependent on a
limited number of principal customers, one of which contributed 10% or more of
the gross revenues of the Company for fiscal year 1995. (See the Company's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 1995, and
"Item 1 - Business" of "Management's Discussion and Analysis of Financial
Condition and Results of Operations" therein, which report is incorporated
herein by reference.)
9. Dependence on Management. At present, the success of the Company is
dependent upon the active participation of its management, the Company's
Chairman and principal shareholder, Dr. Adair, and its Chief Executive Officer,
Van Horsley, Dr. Adair's step-son. In the event the services of either person
are lost for any reason, the Company's business operations would be severely
disrupted. In the event of such a loss, the Company can give no assurance that
it could replace either person without incurring substantial additional expense.
The Company does not have employment contracts with either of these persons,
although it does carry key man life insurance coverage of $100,000 on Dr. Adair.
10. Government Regulation. Because the products that the Company
manufactures are used in surgery and other medical applications, the products
are subject to close scrutiny from agencies of the federal government, including
the FDA. The Company can give no assurance that it will be able to comply fully
with all of the government regulations to which it is subject. (See "Item 1 -
Business" in the Company's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1995, which report is incorporated herein by reference.)
11. Protection of Technology. Although the Company obtains secrecy
agreements from its employees and others having access to its trade secrets and
holds patents on certain of its technology, such agreements and patents do not
afford complete protection against the use of such information by others.
Furthermore, the costs of prosecuting persons who may accidentally or
intentionally infringe on the Company's patents or divulge its trade secrets can
be expensive and time consuming. (See "Item 1 - Business" in the Company's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 1995, which
report is incorporated herein by reference.)
12. Limited Public Market. There currently is a limited public market for
the Company's Common Stock. No assurance can be given that a market for the
Common Stock will continue subsequent to this offering or that purchasers will
be able to resell their securities at the respective exercise prices, or
liquidate their investment without considerable delay, if at all. If a market
does continue, the price may be highly volatile. Factors such as those discussed
in this "Risk Factors" section may have a significant impact on the market price
of the securities offered. Also, some brokerage firms may not effect
transactions in securities that trade below a stipulated price. Further, most
lending institutions will not permit the use of low-priced or thinly traded
securities as collateral for loans.
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<PAGE>
THE COMPANY
Overview of the Company
The Company is engaged in the design, development, manufacture and
marketing of medical devices. The Company's principal products are small, color,
medical video camera systems for use in medical diagnosis and surgical
procedures. The Company has been manufacturing such cameras since August of
1981.
The Company was incorporated under the laws of the State of Colorado on
March 23, 1971, and began operations in 1973. During 1979, the Company began its
involvement with medical video camera systems. Initial operations relating to
such cameras consisted of the Company's purchase of completed cameras from their
manufacturer and the retail sale of those products to the medical community.
Exclusive marketing rights to a camera system manufactured by another company
were acquired, and the Company served as the distributor of that product until
the arrangement was terminated in July of 1981. In August of 1981, the Company
introduced its first medial video camera, which it manufactured. Thereafter,
additional cameras were acquired or developed by the Company.
On October 1, 1989, the Company acquired all of the outstanding shares of
MedPacific Corporation from Viox Corporation in exchange for 195,000 shares of
the Company's Common Stock. Included in this acquisition was a trademark and
exclusive license to produce, market and distribute the Laser Doppler through
March 1994. This investment was fully written-off in the fourth quarter of
Fiscal 1992.
As of September 30, 1995 and 1994, the Company had approximately $60,400
and $98,600, respectively, in firm backlog orders for its products. Backlogs are
not recorded in sales revenue until the order is shipped.
Overview of the Business
The Company's principal business is the design, development, manufacture
and marketing of medical video cameras and related surgical disposable products.
Those products are used in surgical, diagnostic, research and teaching
applications by physicians and other health care professionals.
In recent years, a variety of less invasive diagnostic and surgical
techniques have been developed. Such techniques enable operations to be
performed or observation to occur with minimum surgical incisions. Among the
most common of such surgical techniques is the arthroscopic operation used by
orthopedic surgeons. That surgical technique is made possible by means of a
rigid endoscope known as an arthroscope. The arthroscope is a high quality
optical instrument which is a tube approximately four millimeters in diameter. A
light source is attached to the arthroscope and it is inserted through a small
incision made in the patient's body. The surgeon is able to observe inside the
joints through the lenses of the arthroscope and special surgical instruments
are used to perform corrective surgery without open surgery. Arthroscopy has
obtained widespread acceptance by orthopedic surgeons and is commonly used to
remove damaged cartilage tissue which may result from athletic and other
injuries. The use of the technique is less destructive of healthy tissue and
thereby decreases the time necessary for healing of the damaged area and reduces
the costs of hospitalization and rehabilitation.
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A much more common surgical technique involves the use of a rigid endoscope
known as a laparoscope. The laparoscope is used in much the same way as the
arthroscope, but is limited primarily to use in the abdominal area. The latest
technique involves the use of the laparoscope to remove the gall bladder, a
procedure commonly known as laparoscopic cholecystectomy. The laparoscope also
is used to perform appendectomies, kidney removal and certain gynecologic
procedures. The gynecologic usage accounts for the majority of all laparoscopic
procedures at this time.
The Company's camera systems are utilized in conjunction with arthroscopes,
laparoscopes and other endoscopes. They may also be connected with a microscope
for use in microscopic surgery such as hand or eye surgery. The image which may
be seen by the surgeon through the endoscope or microscope is viewed by the
camera and transmitted to a television monitor. This use of a video camera
provides an image which may be viewed by all persons in the operating room,
diagnostic laboratory or classroom. The ability to observe the surgery permits
the support staff to anticipate the needs of the surgeon and provides a
mechanism which facilitates instruction of others. Additionally, the surgeon is
provided with a television screen used to reduce intervals of viewing through
the endoscope, thereby attenuating eye fatigue. The video camera may also be
attached to peripheral equipment which enables the image to be recorded. The
procedure and the patient may thereby be studied at a later time.
The Company's Offices
The Company's principal executive offices and manufacturing facilities are
at 99 Inverness Drive East, Englewood, Colorado 80112. Its telephone number at
that address is (303) 790-2990.
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<PAGE>
USE OF PROCEEDS
All proceeds from the sale of the Shares will be for the benefit of the
Selling Shareholders; only proceeds from the exercise of outstanding options (if
any are exercised, of which there can be no assurance) will accrue to the
Company from the exercise of certain options and warrants. To the extent that
the Company does receive any proceeds from the exercise of certain options, the
Company will add the proceeds to its working capital.
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1996, and as adjusted to
reflect the sale of the shares offered hereby, by (i) each person known by the
Company to be the beneficial owner of 5% or more of the Company's Common Stock,
(ii) each of the Company's directors, (iii) each named executive officer, (iv)
all directors and executive officers as a group, and (v) each Selling
Shareholder. The information set forth below is based upon information provided
to the Company by each Selling Shareholder. Except as otherwise indicated below,
each of the persons named in the table has sole voting and investment power with
respect to the shares set forth opposite such person's name.
Officers, Directors, and 5%
Security Holders Not Selling
None
Selling Shareholders
<TABLE>
<CAPTION>
Name Number of Percent Number of Shares Number of Shares Percent
Shares Owned being offered to be owned after
(Total) hereby after offering offering
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Edwin L. Adair and 1,366,898 15.0% 487,600 879,298 9.7%
Pat Horsley Adair (2)
Van A. Horsley (3) 253,858 2.8% 133,506 120,352 1.3%
I. Dean Bayne (4) 40,000 * 40,000 -0- *
Leroy Bilanich (5) l40,000 * 40,000 -0- *
Jovanina Brehm (6) 74,800 * 64,800 10,000 *
Jeffrey Adair (7) -0- * 110,081 -0- *
Randall Adair (8) 126,576 * 114,576 12,000 *
John Adair 77,068 * 77,068 -0- *
Craig Carr (10) 3,500 * 3,500 -0- *
Kristine Dando (10) 11,600 * 11,600 -0- *
Steve Desautels (10) 1,900 * 1,900 -0- *
Cindy Dickey (10) 1,200 * 1,200 -0- *
David Goto 2,600 * 2,600 -0- *
David Greiner (10) 2,200 * 2,200 -0- *
Rachel Harris (10) 2,000 * 2,000 -0- *
Judy Melendez (10) 1,200 * 1,200 -0- *
Jeanne Phegley (10) 1,500 * 1,500 -0- *
James Schmied (10) 2,200 * 2,200 -0- *
William Schouten (10) 2,200 * 2,200 -0- *
David Sowa (10) 2,400 * 2,400 -0- *
Pfeiffer Public 12,000 * 12,000 -0- *
Relations, Inc. (11)
Brian Snow (12) 9,000 * 4,000 5,000 *
Michael Ashton (13) 10,000 * 10,000 -0- *
Medical Technica 10,000 * 10,000 -0- *
High Tech Medical 515,000 5.7% 485,000 30,000 *
Instrumentation, Inc. (14)
Michael Williams (15)(17) 320,000 3.5% 320,000 -0- *
David Wilson (16) 300,000 3.3% 300,000 -0- *
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* Less than one percent.
(1) Based on the 6,885,411 shares of Common Stock outstanding as of April 30, 1995. This does not
include 35,000 shares issuable to HTMI upon completion of a proposed transaction described
below in "Recent Events."
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</TABLE>
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(2) Dr. and Mrs. Adair are offering shares underlying options exercisable as
follows. Dr. Adair is Chairman of the Board of Directors; Mrs. Adair is
Corporate Secretary and a Director of the Company. The first three lines
describe options exercisable by Dr. Adair. The third line describes an
option exercisable by Mrs. Adair.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
10/1/2002 300,000 $4.00
6/1/2000 44,000 $1.50
9/30/2000 120,000 $1.00
6/1/2000 23,600 $1.50
This includes options to acquire 120,000 shares granted to Dr. and Mrs.
Adair in October 1995, in lieu of royalty payments due and directors fees.
(3) Mr. Horsley is offering shares underlying options exercisable as follows.
Mr. Horsley is President of the Company and a Director and son of Mrs.
Adair.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
1/20/2003 42,606 $2.75
4/21/1999 50,000 $1.125
6/1/2000 40,900 $1.50
(4) Dr. Bayne is offering shares underlying options exercisable as follows. Dr.
Bayne is a director of the Company.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
6/11/2003 20,000 $4.00
6/2/2000 20,000 $1.50
(5) Mr. Bilanich is offering shares underlying options exercisable as follows.
Mr. Bilanich is a director of the Company.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
6/11/2003 20,000 $1.50
6/2/2000 20,000 $1.50
14
<PAGE>
(6) Mrs. Brehm is offering shares underlying options exercisable as follows.
Mrs. Brehm is a officer and employee of the Company.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
4/21/1999 50,000 $1.125
6/2/2000 14,800 $1.50
(7) Mr. Jeffrey Adair is offering shares underlying options exercisable as
follows. Mr. Adair is an employee of the Company and is the son of Dr.
Adair.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
1/20/2003 50,881 $2.75
6/11/2003 50,000 $1.50
6/2/2000 9,200 $1.50
(8) Mr. Randall Adair is offering shares underlying options exercisable as
follows. Mr. Adair is an employee of the Company and is the son of Dr.
Adair.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
1/20/2003 55,376 $2.75
6/11/2003 50,000 $1.50
6/2/2000 9,200 $1.50
(9) Mr. John Adair is offering shares underlying options exercisable as
follows. Mr. Adair is a past employee and a consultant to the Company and
is the son of Dr. Adair.
15
<PAGE>
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
1/20/2003 27,068 $3.15
6/11/2003 50,000 $4.775
(10) In each case, such persons are employees of or consultants to the Company,
and their options are exercisable at $1.50 per share through June 2, 2000.
(11) Pfeiffer Public Relations is a consultant to the Company. These options to
acquire 12,000 shares at $2.75 expire on November 30, 1998.
(12) Mr. Snow and his wholly owned consulting firm is offering shares underlying
options exercisable as follows. Mr. Snow is a consultant to the Company.
Expiration Date Number of Shares Exercise Price
--------------- ---------------- --------------
4/28/1997 4,000 $1.91
6/2/2000 10,000 $1.50
(13) Mr. Ashton received these shares in exchange for certain laboratory
equipment he sold to the Company in 1994. Mr. Ashton is not an employee of
the Company.
(14) Upon completion of the transaction described in "Recent Events," below,
High Tech Medical Instrumentation, Inc. ("HTMI") will receive 35,000 shares
in consideration for a license agreement by which HTMI licensed certain
technology to the Company. Medical will also issue HTMI options to acquire
450,000 shares which may vest in the future depending on purchases HTMI
makes from the Company under the OEM Agreement. See "Recent Events."
(15) Mr. Williams, a significant shareholder, officer, and director of HTMI (see
note (14)), received these options to acquire stock subject to certain
vesting provisions in a consulting agreement between Mr. Williams and the
Company. See "Recent Events."
(16) Mr. Wilson was recently retained by the Company as a consultant with
respect to the Company's new intra-oral dental camera. These options vest
based on sales of the camera made by Mr. Wilson through June 30, 2000. See
"Recent Events," below.
(17) Does not include shares beneficially owned by HTMI even though such shares
have not vested and are not currently exercisable.
16
<PAGE>
RECENT EVENTS
The Company is in the process of negotiating a license agreement and OEM
Agreement with HTMI. The following description treats the transaction as though
it has been completed. If it has not been completed by the effective date of the
registration statement of which this prospectus is a part, this description will
be deleted and the shares issuable to HTMI will be deleted from this
registration statement. In May 1996 the Company entered into a license agreement
with High Tech Medical Instrumentation, Inc. ("HTMI"). Under this agreement, the
Company licensed US patent 4,858,001 (expiring August 15, 2006) covering certain
technology used to manufacture intra-oral dental cameras. At the same time, HTMI
entered into an original equipment manufacturer (OEM) agreement by which it
appointed the Company as its exclusive manufacturer of intra-oral dental cameras
at negotiated prices.
As consideration for the license agreement, the Company granted HTMI 35,000
shares of its restricted common stock. As consideration for the OEM agreement,
the Company issued to HTMI 450,000 options to purchase its common stock. These
options vest and become exercisable only after HTMI achieves certain purchase
goals:
Exercise Become Exercisable when sales
Options Price under the OEM Agreement Exceed
- ------- -------- -------------------------------
50,000 $2.75 $1,000,000 before expiration of the option
50,000 $2.75 $2,000,000 by June 30, 1998
75,000 $3.00 $3,000,000 before expiration of the option
75,000 $3.00 $4,000,000 by June 30, 1999
200,000 $3.25 $7,000,000 by June 30, 2000
The options expire unless exercised by June 30, 2001. Thus, in order for HTMI to
realize value from the options, it must achieve certain minimum sales
performance. The Company also retained the right to sell its own intra-oral
dental cameras (not using the technology licensed from HTMI) directly.
In April 1996, the Company entered into a consulting agreement with
Michael Williams, a significant shareholder, and director of and researcher for
HTMI. Pursuant to the consulting agreement, Mr. Williams agreed to engage in
engineering, new product design and development, and marketing of the Company's
line of intra-oral dental cameras. As consideration, the Company granted Mr.
Williams 75,000 five-year stock options exercisable at $2.00 per share and an
additional 225,000 which vest and become exercisable upon his achieving certain
sales goals of the Company's camera as follows:
17
<PAGE>
Exercise Become Exercisable
Options Price When Sales Exceed
- ------- -------- -------------------
75,000 $2.75 $1,000,000 before expiration of the option
75,000 $3.00 $4,000,000 before expiration of the option
75,000 $3.75 $9,000,000 before expiration of the option
In each case, the options expire April 17, 2001. Mr. William's consulting
agreement provides for commissions on the sale of dental cameras to the extent
such sales generate acceptable gross margins.
At the same time, the Company entered into an agreement with another
consultant in terms similar to Mr. Williams pursuant to which the Company issued
the consultant 75,000 options and an additional 225,000 contingent options on
the same terms as those issued to Mr. Williams and agreed to pay him commissions
for sales generated on a similar basis.
18
<PAGE>
PLAN OF DISTRIBUTION
Sale of Shares by Selling Shareholders
Michael Ashton, a Selling Shareholder, exercised his right to require the
Company to register the Shares which he acquired from the Company in exchange
for his interest in a laboratory he operated. The Company has also granted
certain other Selling Shareholders the right to participate in this
registration. The Company has been advised by the Selling Shareholders that the
Shares may at any time or from time to time be offered for sale either directly
by the Selling Shareholders or by their transferees or other successors in
interest. Such sales may be made in the over-the-counter market or in privately
negotiated transactions.
Shares may be sold from time to time to purchasers directly by any of the
Selling Shareholders. Alternatively, the Selling Shareholders may from time to
time offer the Shares through underwriters, dealers or agents, who may receive
compensation in the form of discounts and commissions. Such compensation, which
may be in excess of ordinary brokerage commissions, may be paid by the Selling
Shareholders and/or the purchasers of Shares for whom such underwriters, dealers
or agents may act. The Selling Shareholders and any dealers or agents which
participate in the distribution of the Shares may be deemed to be "underwriters"
as defined in the 1933 Act and any profit on the sale of the Shares by them and
any discounts, commissions or concessions received by any such dealers or agents
might be deemed to be underwriting discounts and commissions under the 1933 Act.
The Selling Shareholders have advised the Company that prior to the date of this
Prospectus they have not made any agreements or arrangements with any
underwriters, brokers or dealers regarding the resale of the Shares.
If the Company is notified by the Selling Shareholders that any material
arrangement has been entered into with an underwriter or broker/dealer for the
sale of Shares, a supplemental prospectus will be filed, if required, disclosing
such of the following information as the Company believes appropriate: (i) the
name of the participating underwriter; (ii) the number of Shares involved; (iii)
the price at which such Shares are sold; (iv) the commissions paid or discounts
or concessions allowed to such underwriter; and (v) other facts material to the
transaction.
Shares may be sold from time to time in one or more transactions at a fixed
offering price, which may be changed, at varying prices determined at the time
of sale, or at negotiated prices.
Sales of Shares in the over-the-counter market may be by means of one or
more of the following: (i) a block trade in which a broker or dealer will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (ii) purchases by a dealer as
principal and resale by such dealer for its account pursuant to this Prospectus;
and (iii) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
19
<PAGE>
The Company has agreed to maintain a current registration statement to
permit public sale of the Shares for a period of three months from the date of
this Prospectus or until the Shares have been sold, whichever first occurs. The
Company will pay all of the expenses incident to the offering and sale of the
Shares to the public by the Selling Shareholders other than commissions and
discounts of underwriters, dealers or agents, if any. Such expenses include
legal and accounting fees in connection with the preparation of the Registration
Statement of which this Prospectus is a part, legal fees in connection with the
qualification of the sale of the Shares under the laws of certain states,
registration and filing fees, printing expenses, and other expenses. The Company
will not receive any proceeds of the sale of the Shares by the Selling
Shareholders.
The Company is unable to predict the effect which sales of the Shares by
the Selling Shareholders might have upon the market price of the Company's
Common Stock or the Company's ability to raise further capital.
In connection with this offering the Company and the Selling Shareholders
have agreed to indemnify each other against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
DESCRIPTION OF SECURITIES
Common Stock
Authorized. The Company is authorized to issue 15,000,000 shares of $.001
par value common stock (the "Common Stock"). No holder of any shares of Common
Stock has any preemptive right to subscribe to any of the Company's securities.
Upon dissolution, liquidation or winding up of the Company, the assets will be
divided pro rata on a share-for-share basis among holders of the shares of
Common Stock or Preferred Stock if any shares are outstanding. All shares of
Common Stock outstanding are fully paid and nonassessable and, when issued, the
shares offered hereby will be fully paid and nonassessable.
Issued and Outstanding. On April 30, 1996, the Company had issued and
outstanding 6,885,411 shares of Common Stock. This does not include 35,000
shares issuable to HTMI upon completion of certain transactions described above
in "Recent Events."
20
<PAGE>
Dividends. Holders of Common Stock are entitled to dividends when, as and
if declared by the Board of Directors out of funds legally available therefor,
subject to the rights, if any, of holders of any outstanding shares of Preferred
Stock. The Company has not declared or paid any divi dends on its Common Stock
and does not anticipate the declaration or payment of dividends in the
foreseeable future.
No Cumulative Voting. Each holder of Common Stock is entitled to one vote
per share with respect to all matters that are required by law to be submitted
to stockholders. The stockholders are not entitled to cumulative voting in the
election of directors. Accordingly, the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors if they
choose to do so; and, in such event, the holders of the remaining less than 50%
of the shares voting for the election of the directors will be unable to elect
any person or persons to the Board of Directors.
Preferred Stock
The Company is authorized to issue up to 5,000,000 shares of $.001 par
value Preferred Stock, in series to be designated by the Board of Directors (the
"Preferred Stock"). No shares of Preferred Stock have been issued and it is not
contemplated that any shares of Preferred Stock will be issued by the Company in
the immediate future; however, the Board may use its ability to issue Preferred
Stock to effect the business purposes of the Company.
Material provisions concerning the terms of any series of Preferred Stock
such as dividend rate, conversion features and voting rights, will be determined
by the Board of Directors of the Company at the time of such issuance. The
ability of the Board to issue Preferred Stock also could be used by the Company
as a means of resisting a change of control of the Company and therefore could
be considered an "anti-takeover" device.
Stock Options
On April 30, 1996 the Company had outstanding stock options to purchase
2,198,131 shares of Common Stock exercisable at exercise prices ranging between
$1.00 and $4.775 per share. The holders of these options are Selling
Shareholders herein. See "Principal and Selling Shareholders." In addition, the
Company has reserved 212,376 shares for issuance in connection with future stock
options granted under its 1988 Plan; as of May 8, 1996 there were 58,771 options
currently outstanding under that plan. (See "Item 11 -- Management - Executive
Compensation -- Stock Option Plans" and "Item 12 -- Certain Relationships and
Related Transactions" in the Company's Annual Report on Form 10-KSB for the
fiscal year ended September 30, 1995 and Form 10-QSB for the quarter ended
December 31, 1995, which report is incorporated herein by reference.)
21
<PAGE>
Transfer and Warrant Agent
The transfer agent for the Company's Common Stock and Warrant Agent for the
Company's Common Stock is Continental Stock Transfer & Trust Co., 72 Reade
Street, New York, New York 10007.
MATERIAL CHANGES
Any and all material changes in the Company's affairs which have occurred
since the end of the latest fiscal year ending September 30, 1995, the Company's
latest annual report to shareholders for which audited financial statements were
included, are incorporated herein by reference and are described in the
Company's report on Form 10-QSB for the quarter ended December 31, 1995, which
report is incorporated herein by reference.
INFORMATION WITH RESPECT TO THE COMPANY
This Prospectus is accompanied by the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1995 and its Form 10-QSB for the
quarter ended December 31, 1995.
LEGAL MATTERS
The firm of Friedlob, Sanderson, Raskin, Paulson & Tourtillott, LLC 1400
Glenarm Place, Denver, Colorado 80202, has acted as counsel for the Company in
connection with this offering.
EXPERTS
The financial statements of Medical Dynamics, Inc. for the years ended
September 30, 1995 and 1994 incorporated into the Registration Statement by
reference have been audited by McGladrey & Pullen, LLP, independent certified
public accountants, upon the authority of that firm as experts in accounting and
auditing.
22
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME
DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
MEDICAL DYNAMICS, INC.
TABLE OF CONTENTS
AVAILABLE INFORMATION................. 3
DOCUMENTS INCORPORATED BY
REFERENCE........................... 3 2,243,131 Shares
PROSPECTUS SUMMARY.................... 5
RISK FACTORS.......................... 8
THE COMPANY...........................11 of Common Stock
USE OF PROCEEDS.......................13
PRINCIPAL AND SELLING SHAREHOLDERS....13
RECENT EVENTS.........................17
PLAN OF DISTRIBUTION................. 19
DESCRIPTION OF SECURITIES............ 20 PROSPECTUS
MATERIAL CHANGES..................... 22
INFORMATION WITH RESPECT TO
THE COMPANY........................ 22 May 8, 1996
LEGAL MATTERS........................ 22
EXPERTS.............................. 22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection with
the issuance and distribution of the securities being offered. All expenses are
estimated except the registration fee and NASD filing fee.
Registration and filing fee $ 3,100
NASD filing fee -0-
Printing 1,000
Accounting fees and expenses 5,000
Legal fee and expenses 10,000
Blue sky filing fees and expenses 5,000
Transfer and Warrant Agent fees 500
Miscellaneous 3,400
---------
Total $ 28,000
=========
Item 15. Indemnification of Directors and Officers.
Section 7-109-102 of the Colorado Revised Statutes and the Registrant's
Articles of Incorporation, under certain circumstances provide for the
indemnification of the Registrant's officers, directors and controlling persons
against liabilities which they may incur in such capacities. A summarization of
the circumstances in which such indemnification is provided for is contained
herein, but that description is qualified in its entirety by reference to the
Registrant's Articles of Incorporation and the relevant Section of the Colorado
Revised Statutes.
In general, the statute provides that any director may be indemnified
against liabilities (including the obligation to pay a judgment, settlement,
penalty, fine or expense), incurred in a proceeding (including any civil,
criminal or investigative proceeding) to which the director was a party by
reason of such status. Such indemnity may be provided if the director's actions
resulting in the liabilities: (i) were taken in good faith; (ii) were reasonably
believed to have been in the Registrant's best interest with respect to actions
taken in the director's official capacity; (iii) were reasonably believed not to
be opposed to the Registrant's best interest with respect to other actions; and
(iv) with respect to any criminal action, the director had no reasonable grounds
to believe the actions were unlawful. Unless the director is successful upon the
merits in such an action, indemnification may generally be awarded only after a
determination of independent members of the Board of Directors or a committee
thereof, by independent legal counsel or by vote of the shareholders that the
applicable standard of conduct was met by the director to be indemnified.
II-1
<PAGE>
The statutory provisions further provide that unless limited by a
corporation's articles of incorporation, a director or officer who is wholly
successful, on the merits or otherwise, in defense of any proceeding to which he
was a party, is entitled to receive indemnification against reasonable expenses,
including attorneys' fees, incurred in connection with the proceeding. In
addition, a corporation may indemnify or advance expenses to an officer,
employee or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract. The provision of indemnification to persons other than
directors is subject to such limitations as may be imposed on general public
policy grounds.
In addition to the foregoing, unless hereafter limited by the Registrant's
articles of incorporation, a court, upon petition by an officer or director, may
order the Registrant to indemnify such officer or director against liabilities
arising in connection with any proceeding. A court may order the Registrant to
provide such indemnification, whether or not the applicable standard of conduct
described above was met by the officer or director. To order such
indemnification the court must determine that the petitioner is fairly and
reasonably entitled to such indemnification in light of the circumstances. With
respect to liabilities arising as a result of proceedings on behalf of the
Registrant, a court may only require that a petitioner be indemnified as to the
reasonable expenses incurred.
Indemnification in connection with a proceeding by or in the right of the
Registrant in which the director is successful is permitted only with respect to
reasonable expenses incurred in connection with the defense. In such actions,
the person to be indemnified must have acted in good faith, in a manner believed
to have been in the Registrant's best interest and must not have been adjudged
liable for negligence or misconduct. Indemnification is otherwise prohibited in
connection with a proceeding brought on behalf of the Registrant in which a
director is adjudged liable to the Registrant, or in connection with any
proceeding charging improper personal benefit to the director in which the
director is adjudged liable for receipt of an improper personal benefit.
Colorado law authorizes the Registrant to reimburse or pay reasonable
expenses incurred by a director, officer, employee or agent in connection with a
proceeding, in advance of a final disposition of the matter. Such advances of
expenses are permitted if the person furnishes to the Registrant a written
statement of his belief that he met the applicable standard of conduct required
to permit such indemnification. The person seeking such expense advances must
also provide the Registrant with a written agreement to repay such advances if
it is determined the applicable standard of conduct was not met. A determination
must also be made that the facts known to the Registrant would not preclude
indemnification.
II-2
<PAGE>
The statutory section cited above further specifies that any provisions for
indemnification of or advances for expenses to directors which may be contained
in the Registrant's Articles of Incorporation, Bylaws, resolutions of its
shareholders or directors, or in a contract (except for insurance policies)
shall be valid only to the extent such provisions are consistent with the
Colorado statutes and any limitations upon indemnification set forth in the
Articles of Incorporation.
The statutory provision cited above also grants the power to the Registrant
to purchase and maintain insurance policies which protect any director, officer,
employee, fiduciary or agent against any liability asserted against or incurred
by them in such capacity arising out of his status as such. Such policies may
provide for indemnification whether or not the corporation would otherwise have
the power to provide for it. No such policies providing protection against
liabilities imposed under the securities laws have been obtained by the
Registrant.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits. The following is a complete list of exhibits filed as a part
of this Registration Statement, which Exhibits are incorporated herein.
Number Description
- ------ -----------
5.1 Opinion and Consent of Friedlob, Sanderson, Raskin, Paulson &
Tourtillott, LLC. **
13.1 Registrant's Annual Report on Form 10-KSB for the Fiscal Year Ended
September 30, 1995, including exhibits thereto.*
13.2 Registrant's Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1995.*
23.1 Consent of Friedlob, Sanderson, Raskin, Paulson & Tourtillott, LLC.
(See Exhibit 5.1) **
23.2 Consent of McGladrey & Pullen, LLP.
- ----------
* Previously filed.
** To be filed by Amendment.
II-3
<PAGE>
Item 17. 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
the Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (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; and (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, including (but not limited to) any addition or deletion of a managing
underwriter; (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; and (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 to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered, to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
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 Registrant's Articles of Incorporation, 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 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.
II-4
<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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Denver, State of Colorado, on May 1, 1996.
MEDICAL DYNAMICS, INC.
By /S/ VAN A. HORSLEY
----------------------------------
Van A. Horsley, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/S/ EDWIN L ADAIR, M.D.
- ----------------------- Director May 1, 1996
Edwin L. Adair, M.D.
/S/ PAT HORSLEY ADAIR
- ----------------------- Director May 1, 1996
Pat Horsley Adair
/S/ DEAN BAYNE, M.D.
- ----------------------- Director May 1, 1996
I. Dean Bayne, M.D.
/S/ VAN A. HORSLEY
- ----------------------- Director, Chief Principal May 1, 1996
Van A. Horsley Financial Officer and
Executive Officer
- --------------------- Director May __, 1996
Leroy Bilanich
II-5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Medical Dynamics, Inc.
Englewood, Colorado
We hereby consent to the incorporation by reference in this Form S- 3
Registration Statement of Medical Dynamics, Inc. (the "Company") of our report
dated November 27, 1995 relating to the financial statements of the Company
appearing in the Company's Annual Report on Form 10-QSB for the fiscal year
ended September 30, 1995.
We also consent to the reference to our firm under the caption "Experts" in such
Registration Statement.
McGLADREY & PULLEN, LLP
Denver, Colorado
May 7, 1996
