As Filed with the Securities and Exchange Commission on November 13, 1995
Registration No. 33-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WHITMAN MEDICAL CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
NEW JERSEY 22-2246554
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
485E U.S. Highway 1 South
Iselin, New Jersey 08830
(908) 636-3640
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
RANDY S. PROTO
President
Whitman Medical Corp.
485E U.S. Highway 1 South
Iselin, New Jersey 08830
(908) 636-3640
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
WILLIAM P. OBERDORF, ESQ.
Robinson, St. John & Wayne
Two Penn Plaza East
Newark, New Jersey 07105-2249
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ].
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
Page 1 of 27 Pages
Exhibit Index on page 23
132099-2
<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of each
class of Amount to Proposed Proposed maximum Amount of
securities to be be Maximum offering aggregate offering registration
registered registered price per share price fee
- ---------------- ---------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock, no par
value per share 609,038 $6.375(1) $3,882,618 $1,339
</TABLE>
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(1) The offering price per share is estimated pursuant to Rule 457(c)
solely for the purpose of calculating the registration fee and is
based upon the average of the high and low price of the
shares of Common Stock as reported on the American Stock Exchange on
November 10, 1995.
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 SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
132099-2
<PAGE>
Subject to Completion, Dated November 13, 1995
PROSPECTUS
WHITMAN MEDICAL CORP.
609,038 Shares of Common Stock
---------------
This Prospectus relates to the sale from time to time by the holder
thereof (the "Selling Security Holder") listed under the caption "Selling
Security Holder" of an aggregate of 609,038 shares (the "Shares" or the
"Securities") of Common Stock, no par value per share ("Common Stock"), of
Whitman Medical Corp. (the "Company").
The 609,038 Shares covered by this Prospectus were originally issued
in a private placement offering made by the Company in connection with its
acquisition of the assets of Sanford Brown College, Inc. ("SBC") to the
Selling Security Holder on December 21, 1994. The private placement offering
made by the Company was exempt from registration under the Act pursuant to
Section 4(2) thereof and Rule 506 of Regulation D promulgated thereunder.
The Company will not receive any of the proceeds from the sale of the
Shares being offered hereby. The Company's Common Stock is presently listed on
the American Stock Exchange ("AMEX") under the symbol "WIX." The
average of the closing price for the Common Stock as reported by AMEX on
November 10, 1995, was $6.37.
The Shares of Common Stock offered by the Selling Security Holder may
be sold from time to time by the Selling Security Holder or by their pledgees,
transferees or other successors-in-interest, in the over-the-counter market or
otherwise, at prices and on terms then prevailing or at prices related to the
then current market price, or in privately negotiated transactions. The
Selling Security Holder and any broker-dealers, agents or underwriters that
participate with the Selling Security Holder in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Act and any
commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Act. See "Plan of Distribution."
To the extent required, the specific Shares to be sold, the purchase
price, the public offering price, the names of any such agents, dealers or
underwriters and any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying Prospectus supplement.
Such Prospectus supplement will also set forth information regarding mutual
indemnification by the Company of the Selling Security Holder against certain
liabilities, including liabilities under the Act and the Securities Exchange
Act of 1934 (the "Exchange Act"). See "Plan of Distribution" for indemnification
arrangements.
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<PAGE>
SEE "RISK FACTORS" FOR
CERTAIN MATTERS TO BE CONSIDERED BY PROSPECTIVE INVESTORS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ________________, 1995.
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<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 (together
with all amendments thereto referred to herein as the "Registration
Statement") under the Act, with the Securities and Exchange Commission (the
"Commission") covering the shares of common stock being offered by this
Prospectus. This Prospectus does not contain all the information set forth or
incorporated by reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the securities offered by this
Prospectus, reference is made to the Registration Statement and the exhibits
and schedules thereto which are on file at the offices of the Commission and
may be obtained upon payment of the fee prescribed by the Commission, or may
be examined without charge at the offices of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
documents referred to are not necessarily complete, and are qualified in all
respects by such reference.
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy and
information statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy and information statements
and other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661- 2511; and 7 World Trade Center, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission, in Washington, D.C. at prescribed rates. Reports,
proxy statements and other information filed by the Company can be inspected
at the office of the National Association of Securities Dealers, 1735 "K"
Street, N.W., Washington, D.C. 20036.
---------------
No person is authorized in connection with the offering made by this
Prospectus to give any information or to make any representations not
contained or incorporated by reference in this Prospectus, and any information
or representation not contained or incorporated by reference in this
Prospectus must not be relied upon as having been authorized by the Company.
This Prospectus is not an offer to sell, or a solicitation of an offer to buy,
by any person in any jurisdiction in which it is unlawful for that person to
make an offer or solicitation. Neither the delivery of this Prospectus nor any
sale made under this Prospectus shall, under any circumstance, create any
implication that the information in this Prospectus is correct as of any time
subsequent to the date of this Prospectus.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-10819)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1995 as filed and as amended from time to
time.
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995 as amended on Form 10-Q/A as filed with
the Commission on October 10, 1995.
3. The Company's Current Report on Form 8-K dated December 21,
1994, as amended on Form 8 as filed with the Commission on
February 22, 1995.
4. The Company's Current Report on Form 8-K dated
September 12, 1995.
5. All other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the
Exchange Act since the date of this Prospectus.
6. The description of the Company's Common Stock as described
in Form 8-A filed with the Commission under the Exchange
Act, on April 12, 1995.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this Prospectus
and to be a part of this Prospectus from the date of filing thereof.
Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein 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 part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of that person, a copy
of all documents incorporated by reference into the Registration Statement of
which this Prospectus is a part, other than exhibits to those documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such documents should be directed to Joseph
Lichtenstein, Secretary, Whitman Medical Corp., 485E U.S. Highway 1 South,
Iselin, New Jersey 08830, (telephone: (908) 636-3640).
132099-2
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<PAGE>
THE COMPANY
In General
Whitman Medical Corp. (the "Company") is engaged in the operation of
twenty proprietary career-oriented degree and non-degree granting
post-secondary schools. Through its wholly-owned subsidiary, Ultrasound
Technical Services, Inc., the company owns and operates the Ultrasound
Diagnostic School, the largest school in the United States for the training of
sonographers for the field of medical diagnostic ultrasound. In addition,
through its wholly-owned subsidiary, Sanford Brown College, Inc., the company
owns and operates Sanford-Brown College, a post-secondary school which offers
health care and business degree and non-degree granting programs.
Ultrasound Diagnostic School
The Ultrasound Diagnostic School ("UDS") is believed by management to
educate more students to be ultrasound technologists in the field of
diagnostic medical ultrasound than any other school in the United States.
Medical ultrasound employs harmless, high frequency sound waves to form a
picture of the internal organs of the body and is employed in various medical
specialties including obstetrics, gynecology, cardiology, internal medicine,
oncology and ophthalmology.
As of November 1, 1995, UDS consisted of fifteen teaching facilities:
three in New York State, three in Florida, two in Pennsylvania, two in Texas,
and one each in Georgia, Maryland, Massachusetts, New Jersey and Ohio. Of
these fifteen facilities, four began operations in fiscal 1993 and one in
fiscal 1994.
UDS's curriculum offers three major programs: general ultrasound,
cardio-vascular technology and medical assisting. UDS's general ultrasound
program teaches students to become diagnostic medical sonographers. The
cardiovascular technology program provides concentrated study and practical
experience in cardiac and vessel anatomy, pathophysiology, biophysiology,
acquired and congenital diseases, ultrasound physics, pharmacology and drug
interaction, electrocardiograms, halter monitoring and stress testing,
echocardiography and cardiac doppler and the entire spectrum of arterial and
venous doppler using ultrasound color flow technology. The medical assisting
program provides concentrated study and practical experience in routine
front-office administrative skills and clinical capabilities performed in a
primary health care setting.
In addition to its three major program offerings, UDS, through its
Division of Continuing Medical Education, offers advanced continuing medical
education courses in diagnostic ultrasound, magnetic resonance imaging ("MRI")
and computed axial tomography ("CAT Scan"). MRI, a non invasive procedure, is
a method of imaging internal body organs, bones and vessels,
132099-2
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<PAGE>
utilizing radio frequency waves. CAT Scan is a method of imaging internal body
organs and bones utilizing X-rays.
The UDS programs are not degree-granting programs. However, the
Program of Non Collegiate Sponsored Instruction of the American Council on
Education ("ACE") evaluated the UDS courses and recommended that universities
and colleges give UDS graduates up to 43 college credits toward a
baccalaureate degree.
At September 30, 1995, 1213 students were enrolled in various UDS
programs.
Sanford-Brown College
Sanford-Brown College ("SBC") operates four schools in Missouri and
one in Illinois organized in two main campuses: Des Peres, Missouri and
Granite City, Illinois. SBC offers programs in physical therapy, occupational
therapy, associate degree, nursing, licensed practical nursing, medical
administration, accounting, secretarial, data processing, travel and
hospitality and paralegal.
SBC is accredited by the Accrediting Commission for Independent
Colleges and Schools, and is a candidate for accreditation by the North
Central Association ("NCA"). The NCA candidacy status allows SBC to issue
accredited associates' degrees, giving a student the ability to transfer
credits earned at SBC towards a baccalaureate degree at many four year
colleges.
At September 30, 1995, 1,505 students were enrolled in various SBC
programs.
Regulation and Financial Aid Programs
Each UDS and SBC teaching facility is regulated and licensed by the
state in which it operates. In addition, although approval of the US
Department of Education is not required for UDS or SBC to operate, both UDS
and SBC derive a substantial portion of their revenues through the Title IV
Student Financial Aid Programs (the "Title IV Programs"). Approval for
participation in Title IV Programs requires as a prerequisite that a school be
licensed by the state in which it operates and accredited by an accrediting
agency approved by the Department of Education. All UDS teaching facilities
are accredited by the Accrediting Bureau of Health Education Schools. All SBC
teaching facilities are accredited by the Accrediting Commission for
Independent Colleges and Schools.
Recent Events
The Company is a party to an Agreement and Plan of Merger (the
"Merger Agreement") dated September 12, 1995 by and among Whitman Medical
Acquisition Corporation and MDJB, Inc. The Merger Agreement provides for the
merger of MDJB, Inc., a Colorado corporation, with and into Whitman Medical
Acquisition Corporation, a Delaware corporation and wholly-
132099-2
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<PAGE>
owned subsidiary of the Company. The Merger Agreement provides for the issuance
by the Company of 1,250,000 shares of its common stock for all of the issued and
outstanding capital stock of MDJB, Inc. The consummation of the Merger Agreement
is subject to a number of conditions, including, without limitation, the
Company's Registration Statement on Form S-4 being declared effective by the
Securities and Exchange Commission, the Merger being treated as a pooling of
interest in accordance with generally accepted accounting principles and the
approval of the Merger Agreement by the shareholders of each of the Company
and MDJB, Inc. In addition, if the conditions to the completion the Merger
Agreement are satisfied and the Merger is closed, the Merger may be rescinded
by the Company within a period of up to 240 days following the effective date
of the Merger in the event Whitman Medical Acquisition Corporation is not
certified by the U.S. Department of Education for participation in Title IV
Student Financial Aid Programs under the Higher Education Act of 1965, as
amended.
MDJB, Inc. is the owner of Colorado Technical University, a
regionally accredited degree granting institution with approximately 1,600
students enrolled primarily in computer science, engineering and management
programs. Colorado Tech confers degrees at the associate, bachelore, master,
and doctoral levels. MDJB also owns Concept Communications, an advertising
agency which provides services to Colorado Technical University and other
clients not affiliated with MDJB, Inc.
The Company was incorporated in 1979 under the laws of the State of
New Jersey. The principal office of the Company is located at 485E U.S.
Highway 1 South, Iselin, New Jersey 08830, and the Company's telephone number
at that address is (908) 636-3640.
132099-2
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<PAGE>
RISK FACTORS
An investment in the Shares involves a high degree of risk.
Prospective investors should carefully consider, along with the other
information contained herein, the following risk factors before purchasing any
Shares offered hereby:
RECENT LOSSES; ADDITIONAL CAPITAL REQUIREMENTS. The Company reported a net
loss of $354,979 on revenues of $11,759,258 for the fiscal year ended March
31, 1995, as compared to net income of $213,561 on revenues of $6,158,203 for
the fiscal year ended March 31, 1994. For the three months ended June 30,
1995, the Company reported a net loss of $840,371 on revenues $6,199,305, as
compared to a net loss of $109,115 on revenues of $1,498,939 for the
comparable period in 1994. Management attributes such losses to increased
costs associated with the current expansion of the UDS teaching facilities to
increase the number of career programs offered, increased salary expense
associated with an increase in the number of full-time employees and the
depreciation expense associated with recently acquired laboratory and computer
equipment and furniture. It is anticipated that the expenditures associated
with the planned expansion of the UDS teaching facilities will cause the
Company to incur operating losses until such time, if any, as the Company
generates sufficient additional revenues from operations. In addition, the
Company has a working capital facility in the amount of $2,500,000 (of which
$1,210,000 was available for use at September 30, 1995) and a $6,000,000 term
loan, each of which mature on April 16, 1996. While the Company management
believes that the cash flow from operations will be sufficient to pay the
balance on the $2,500,000 working capital facility, the Company does not
expect to have sufficient positive cash flow by April 16, 1996 to repay the
$6,000,000 term loan facility. Although the Company has been successful to
date in funding its cash flow deficiencies through private offerings of its
securities, and bank financing, no assurance can be given that the Company
will be successful in completing future offerings of its securities, in
refinancing the existing debt or in obtaining replacement bank financing. In
addition, there can be no assurance that the Company will continue to have the
guaranty of Frost-Nevada, Limited Partnership available to obtain necessary
bank financing. If additional funds are not available from operations or
alternatives sources of financing to refinance the Company's $6,000,000 term
loan and to fund cash flow deficiencies following repayment of the working
capital facility, the Company's business would be materially adversely affected.
Moreover, pursuant to the Merger Agreement with MDJB, Inc., the Company has
agreed to provide to Colorado Technical University certain advances up to the
amount of funding that Colorado Technical University would have received under
Title IV Programs in the absence of Colorado Tech's termination from eligibility
for funding under such programs as a result of the Merger. The Company's
obligation to provide such advances will continue for an additional period of
120 days in the event Whitman rescinds the Merger. In the event the Company is
successful in refinancing its existing working capital and term loan facilities,
management believes it will have sufficient resources available to satisfy its
obligations to make advances to Colorado Technical University as provided in the
Merger Agreement. If, however, the working capital and term loan facilities are
not refinanced or extended, or alternative sources of financing are unavailable,
the Company will be unable to satisfy its obligations in this regard. The
failure of Whitman to provide such advances to Colorado Technical University
will have a material adverse effect on the Company.
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<PAGE>
FEDERAL AND STATE REGULATION. Each school operated by the Company is subject
to regulation (i) by the state in which it operates, (ii) by accrediting
associations and (iii) because it is eligible to participate in Federal
financial aid programs, by the United States Department of Education (the
"DOE").
Accreditation. The Company's schools are accredited by national
accrediting associations recognized by the DOE. Accreditation serves as the
basis for: (1) the recognition and acceptance by employers, other higher
education institutions and governmental entities of degrees and credits earned
by students; (2) the qualification to participate in Title IV Programs and (3)
the qualification for authorization to operate in certain states. The
withdrawal of accreditation from the Company or its schools would have a
material adverse effect on the Company.
State Authorization. The Company is required to have authorization to
operate in each state in which it physically provides educational programs.
Certain states accept accreditation as evidence of meeting minimum state
standards for authorization. Other states require separate evaluations for
authorization. Depending on the state, the addition of a program not offered
previously or the addition of a new location must be included in the
institution's accreditation and/or be approved by the appropriate state
authorization agency. Each of the Company's schools is currently authorized to
operate in each state in which it is physically located. If the Company is
unable to maintain authorization to operate in existing states, it may have a
material adverse effect on the Company.
FEDERAL FINANCIAL AID PROGRAMS. The Company derives a majority of its revenue
from students who participate in Federal financial aid programs ("Title IV
Programs") under Title IV of the Higher Education Act of 1965, as amended
("HEA"), and the regulations promulgated thereunder by the DOE (the
"Regulations"). In order to participate in Title IV Programs, the Company must
comply with complex standards set forth in the HEA and the Regulations. In
1992, in reauthorizing the HEA, Congress imposed more stringent standards upon
proprietary institutions participating in Title IV Programs. The new standards
placed proprietary institutions under increased regulatory scrutiny. The loss
by the Company of its eligibility to participate in Title IV Programs would
have a material adverse effect on the Company.
State Postsecondary Review Equity. The HEA requires each state to
establish a State Postsecondary Review Entity ("SPRE") to review institutions
within its state to determine continued eligibility to participate in the
Title IV Programs. SPRE reviews will be mandatory for institutions meeting
specific criteria. At present, UDS and SBC operate schools in 11 states. Each
state is required to submit its review standards to the DOE for approval. The
review standards promulgated by a state could adversely affect the eligibility
of the Company's schools in that state to participate in the Title IV
Programs.
The 85/15 Rule. The HEA requires that an annual comparison be made
for each proprietary school of the percentage of its Title IV Program receipts
to its total receipts from Title IV eligible programs. Under the 85/15 Rule, a
proprietary school will be ineligible to participate
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in Title IV Programs if, on a cash basis of accounting, more than 85% of its
revenues from Title IV eligible programs for the prior fiscal year were
derived from Title IV Program funds. Although the Company believes that each
of its schools is in compliance with the 85/15 Rule, there could be no
assurance that such compliance will continue in the future.
Student Loan Defaults. If a school's cohort default rate (the rate at
which its student borrowers entering repayment in one federal fiscal year
default on repayment of student loans obtained under the Federal Family
Education Loan Programs ["FFELP"] before the end of the following fiscal year)
exceeds 25% in all of its three most recent federal fiscal years it becomes
ineligible to participate in the FFELP programs. An institution's cohort
default rate is published annually by the DOE. The most recent cohort year
published was 1992. A school may appeal its published rate and/or its loss of
eligibility. UDS' default rates are well below the 25% ceiling, but SBC's 1992
rate exceeded 25% and it is expected that SBC's 1993 default rate will exceed
the 25% ceiling. Stringent measures have been implemented by SBC to reduce its
default rate. The Company does not anticipate that SBC will lose FFELP
eligibility, however, the DOE may place restrictions on SBC until the rate has
been reduced below the 25% ceiling. If SBC does lose FFELP eligibility, it
would have a material adverse affect on the Company.
Standards of Financial Responsibility. Under the Regulations, each
eligible institution must satisfy certain standards of financial
responsibility to continue to participate in Title IV Programs. A failure to
satisfy the standards could result in restrictions being place on an
institution's participation in Title IV Programs or a termination of its
eligibility to participate in Title IV Programs. For purposes of these
standards, at present SBC is evaluated as a distinct entity, while UDS is
evaluated on the basis of the financial performance of the Company as a whole.
The three principal standards are the acid test ratio, profitability and
tangible net worth.
Acid Test Ratio. At the end of the fiscal year, a proprietary
institution must maintain a ratio of at least 1 to 1 of cash, cash
equivalents, restricted cash and current accounts receivable to total current
liabilities. At March 31, 1995, the Company's acid test ratio was 1.36 to 1.00
and SBC's acid test ratio was 1.21 to 1.00. There can be no assurance that the
minimum acid test ratios will be met in the future.
Profitability. An eligible institution may not have operating losses
in either or both of its two most recent fiscal years that, in sum, result in
a decrease in its tangible net worth in excess of 10% of the institution's
tangible net worth at the beginning of the two year period. SBC operated
profitably in fiscal 1995. Although the Company had an operating loss for
fiscal 1995, the sum of its operating results in the 1994 and 1995 fiscal
years did not result in a decrease of its tangible net worth in excess of 10%.
Should the Company experience an operating loss for fiscal 1996, the UDS
schools will likely fail to meet the profitability standard which could have a
material adverse effect on the Company.
Tangible Net Worth. An eligible institution is required to have a
positive tangible net worth at the completion of its fiscal year. At March 31,
1995 SBC and the Company each had a positive net worth. There can be no
assurance that SBC or the Company will continue to maintain a positive
tangible net worth which could have a material adverse effect on the Company.
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RELIANCE ON CURRENT MANAGEMENT AND PERSONNEL. The Company's success is
dependent on its ability to recruit and retain qualified management and
educational personnel. Although the Company has been successful to date in
attracting and retaining skilled management and educational personnel, there
can be no assurance that the Company will be able to attract and retain such
personnel on acceptable terms in the future.
COMPETITION. In almost all the geographic areas in which UDS teaching
facilities are located, hospitals and community colleges operate programs to
train medical sonographers. In addition, both proprietary schools and
community colleges offer Medical Assisting programs similar to that offered by
UDS. Moreover, in each of the areas in which SBC operates, there are many
competitors which provide comparative educational degrees and curriculum.
DIVIDEND POLICY. The Company has not paid dividends on its Common Stock since
its inception and, by reason of its present financial condition and its
projected financial needs, it does not contemplate paying dividends in the
foreseeable future on its Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of the Company's Common Stock in the
public market by current shareholders or the Company could adversely affect
the market price of the Common Stock. Following this offering, the Company
cannot predict the effect, if any, that market sales of the Common Stock or
the availability of such Common Stock will have on the market price for such
stock. However, sales by the Selling Security Holder, existing shareholders
and the Company of substantial amounts of Common Stock in the public market
could adversely affect the prevailing market prices for the Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered by this Prospectus by the Selling Security Holder. The aggregate
proceeds to the Selling Security Holder from the sale of the Shares will be
the purchase price of the Shares sold, less the aggregate agents' commissions
and underwriters' discounts, if any, and any other expenses of issuance and
distribution not borne by the Company. See "Plan of Distribution."
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<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus are being offered for the
account of the Selling Security Holder. Consequently, the Company will not
receive any of the proceeds from the sale of the Securities offered hereby.
The Securities may be sold from time to time by the Selling Security
Holder, or by pledgees, transferees or other successors in interest, on the
American Stock Exchange (or such other exchange on which the Shares are listed
at the time of sale), in the over-the-counter market or otherwise, at prices
and at terms then prevailing or at prices related to the then current market
price, or in privately negotiated transactions. The Shares may be sold by
various methods, including, but not limited to one or more of the following;
(a) directly in a privately negotiated transaction; (b) a block trade in which
the broker or dealer so engaged will attempt to sell the Shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (c) purchased by a broker or dealer as principal and resale by
such broker or dealer for its own account pursuant to this Prospectus; (d) an
exchange transaction in accordance with the rules of such exchange; and (e)
ordinary brokers transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the Selling
Security Holder may arrange for other brokers or dealers to participate.
Alternatively, the Selling Security Holder may from time to time offer the
Shares through underwriters, dealers or agents who may receive compensation in
the form of underwriting discounts, concessions or commissions from the
Selling Security Holder and/or the purchasers of Shares for whom they may act
as agents. In addition, any of the Shares which qualify for sale pursuant to
Rule 144 under the Act, or otherwise pursuant to an applicable exemption under
the Act, may be sold other than pursuant to this Prospectus.
The Selling Security Holder and any such underwriters, dealers or
agents that participate in the distribution of Shares may be deemed to be
underwriters, and any profit on the sale of the Shares by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Act. The Shares may be sold
from time to time in one or more transactions at a fixed offering price, which
may be changed, or at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the Selling Security
Holder or by an agreement between the Selling Security Holder and underwriters
or dealers. Brokers or dealers acting in connection with the sale of the
Shares contemplated by this Prospectus may receive fees or commissions in
connection therewith.
At the time a particular offer of Shares is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate amount of Shares being offered and the
terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for Shares
purchased from the Selling Security Holder, any discounts, commissions and
other items constituting compensation from the Selling Security Holder and/or
the Company and any discounts, commissions or concessions allowed or reallowed
or paid to dealers, including the proposed selling price to the public. Such
supplement to this Prospectus and, if necessary, a post-effective amendment to
the Registration Statement of which this Prospectus is a part, will be filed
with the Commission to reflect the disclosure of additional information with
respect to the distribution of the Shares. The Company will pay all of the
expenses incident to the registration and certain other expenses related
132099-2
-12-
<PAGE>
to this offering with respect to Shares, other than underwriting commissions
and discounts, normal commission expenses and brokerage fees, applicable
transfer taxes and attorney's fees of Selling Security Holder's counsel.
The Selling Security Holder and the Company have entered into
indemnification agreements pursuant to which the Company has agreed to
indemnify and hold the Selling Security Holder harmless against any loss,
claims, damages or liabilities which arise out of or are based on any untrue
statement of material fact contained in the Registration Statement of which
this Prospectus forms a part, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein when necessary
to make the statements therein not misleading. The Company's indemnification
of the Selling Security Holder in this regard excludes losses, claims, damages
or liabilities to the extent they arise out of or are based upon untrue
statements or omission made in the Registration Statement of which this
Prospectus forms a part in reliance upon information furnished in writing to
the Company by the Selling Security Holder or its agents. Similarly, the
Selling Security Holder has agreed to indemnify the Company against losses,
claims, damages or liabilities arising out of or based upon any untrue
statement or omission made in the Registration Statement of which this
Prospectus forms a part based upon written materials furnished to the Company
by the Selling Security Holder or its agents for use therein, or arise out of
or are based upon any untrue statement or omission made by the Selling
Security Holders or its agents in connection with the offer and sale of the
Shares which are not contained in or authorized by this Prospectus.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Shares may not enter bids to purchase,
purchase or engage in similar trading or market making activities with respect
to the Company's securities for a period commencing nine business days prior
to the commencement of such distribution and ending with the completion of
such distribution. In addition, and without limiting the foregoing, the
Selling Security Holder and any person participating in the distribution of
the Shares will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation rules 10b-6
and 10b-7, which provisions may limit the timing of purchases and sales of the
Shares by the Selling Security Holders. All of the foregoing may affect the
marketability of the Shares.
In order to comply with certain states' securities laws, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Shares may
not be sold unless the Shares have been registered or qualified for sale in
such state, or unless an exemption from registration or qualification is
available and is obtained.
There can be no assurance that the Selling Security Holder will sell
any or all of the Shares offered by it hereby.
The Shares originally issued by the Company to the Selling Security
Holder contained legends as to their restricted transferability. Upon the
effectiveness of the Registration Statement
132099-2
-13-
<PAGE>
of which this Prospectus is a part and the transfer by the Selling Security
Holder of any of the Shares pursuant thereto, these legends will no longer be
necessary, and new certificates representing such Shares will be issued to the
transferee, free of any such legends.
SELLING SECURITY HOLDER
The following table provides certain information, as of the date of
this Prospectus, with respect to the Shares owned by the Selling Security
Holder (which information has been furnished to the Company by the Selling
Security Holder) including the number of Shares owned by such holder before
and after this registration (assuming all Shares registered hereby are sold),
and the nature of any position, office or other material relationship between
such holder and the Company (including affiliates) during the past three
years. Because the Selling Security Holder may sell all or a part of the
Shares which it holds pursuant to this Prospectus and the fact that this
offering is not being underwritten on a firm commitment basis, no estimate can
be given as to the amount of Shares that will be held by the Selling Security
Holder upon termination of this offering. See "Plan of Distribution." The
Shares offered by this Prospectus may be offered from time to time in whole or
in part by the person named below or by its transferees, as to whom applicable
information will, to the extent required, be set forth in a prospectus
supplement. See "Plan of Distribution."
<TABLE>
<CAPTION>
Common Stock
Common Stock Owned
Owned Prior to the Offering After the Offering
----------------------------------- --------------------
Number Number
of Shares Percent of Shares of Shares Percent
of Common that may of of
Selling Common Stock be Common Common
Securityholder Stock Offered Stock Stock
- --------------- ------- ---------- -------- ------- -----
<S> <C> <C> <C> <C> <C>
SBC Liquidating, 609,038 13.92 % 609,038 - -
Inc.(1)
</TABLE>
- ---------------
(1) On December 21, 1994, the Company consummated the acquisition of
all the assets of Sanford Brown College, Inc. for $5,900,000 in cash and
609,038 shares of the Company's common stock. At the Closing, the 609,038
shares were deposited in an escrow account maintained at Midlantic Bank N.A.
pursuant to an Escrow Agreement by and among Midlantic Bank, N.A., SBC
Liquidating, Inc. and Whitman Acquisition Corporation. Pursuant to the Escrow
Agreement, 98,232 of the shares have been released from escrow to SBC
Liquidating, Inc. The balance of 510,806 shares remaining in the escrow
account will be released to SBC Liquidating, Inc. upon the occurrence of
certain stated events described in the Escrow Agreement. In the event the
conditions provided in the Escrow Agreement are not satisfied, the balance of
the shares held in the escrow will be returned to the Company for
cancellation. The parties have agreed that neither the Company nor SBC
Liquidating, Inc. has voting power or investment power with respect to the
shares held in escrow. Under the terms of the Company's agreement to purchase
the assets of Sanford Brown College, Inc., the Company is required to register
under the Securities Act all shares subject to distribution to SBC
Liquidating, Inc. from the escrow account.
TRANSFER AGENT
The Transfer Agent for the Company's Common Stock is Continental
Stock Transfer and Trust Company, 2 Broadway, New York, New York 10004.
132099-2
-14-
<PAGE>
LEGAL MATTERS
Certain legal matters relating to the legality of the Shares offered
hereby have been passed upon for the Company by Robinson, St. John & Wayne,
Two Penn Plaza East, Newark, New Jersey 07105-2249.
EXPERTS
The consolidated financial statements of Whitman Medical Corp.
appearing in Whitman Medical Corp.'s Annual Report on Form 10-K for the year
ended March 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The financial statements and schedules of Sanford Brown College, Inc.
at and for the fiscal years ended October 31, 1992, 1993 and 1994, appearing
in the Company's Report on Form 8 filed on February 22, 1995, have been
audited by KPMG Peat Marwick LLP, independent certified public accountants, as
set forth in their report included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance
upon such reports given upon the authority of such firm as experts in auditing
and accounting.
132099-2
-15-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses of Whitman
Medical Corp. in connection with the distribution of the securities being
registered. The Selling Security Holders will not bear any of such expenses.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee.........................................................................$ 1,339
Legal Fees and Expenses...................................................................15,000
Blue Sky Fees and Expenses.................................................................5,000
Accounting Fees and Expenses...............................................................5,000
Miscellaneous Expenses.....................................................................1,000
TOTAL................................................................................... $27,339
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation, as amended, eliminates
the personal liability of Directors to the Company and its Shareholders for
acts or omissions. The provisions of the Company's Certificate of
Incorporation that eliminate the personal liability of Directors do not, in
any way, eliminate or limit the liability of a Director for breaching his duty
of loyalty to the Company or its Shareholders, failing to act in good faith,
knowingly violating the law or obtaining an improper personal benefit.
Section 14A:3-5 of the New Jersey Business Corporation Act (the
"NJBCA") gives the Company power to indemnify each of its directors and
officers against expenses and liabilities in connection with any proceeding
involving him by reason of his being or having been a director or officer if
(a) he acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the Company and (b) with respect to any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. However, in a proceeding by or in the right of the Company, there
shall be no indemnification in respect of any liabilities or expenses if the
officer or director shall have been adjudged liable to the Company unless the
court in such proceeding determines he is entitled to indemnity for such
liabilities and/or expenses. Furthermore, no indemnification shall be made to
or on behalf of a director or officer if a judgment or other final
adjudication adverse to such director or officer establishes that his acts or
omissions (a) were in breach of his duty of loyalty to the Company and its
stockholders, (b) were not in good faith or involved a knowing violation of
law or (c) resulted in receipt by the director or officer of an improper
personal benefit. The NJBCA defines an act or omission in breach of a person's
duty of loyalty as an act or omission which that person knows or believes to
be contrary to the best interests of the Company or its stockholders in
connection with a matter in which he has a material conflict
II-1
<PAGE>
of interest. If a director or officer is successful in a proceeding, the
statute mandates that the
Company indemnify him against expenses.
See also the undertakings set forth in response to Item 17 herein.
ITEM 16. EXHIBITS.
5.1 Opinion of Robinson, St. John & Wayne as to the legality of
the securities to be
registered.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of KMPG Peat Marwick LLP.
23.3 Consent of Robinson, St. John & Wayne (included in Exhibit
5.1)
24.1 Power of Attorney (included on Page II-4 hereof)
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of
1933;
(ii) To reflect in the Prospectus any fact or events arising
after the effective date of the registration statement (or
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;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs 1(i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
II-2
<PAGE>
(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 the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned Registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's Annual Report pursuant to Section 13(a) or 15(d) of
the Securities Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) 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 is 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.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such officer, director 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonably grounds to believe that it meets
all of the requirements of 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 Township of Iselin, State of New Jersey on
October 31, 1995.
WHITMAN MEDICAL CORP.
By: /S/Randy S. Proto
Randy S. Proto, President
(principal executive officer)
By: /S/Joseph Lichtenstein
Joseph Lichtenstein, Vice President
(principal financial and accounting officer)
Each person whose signature appears below constitutes and appoints Randy
S. Proto and Joseph Lichtenstein true and lawful attorneys-in-fact and agents
each acting alone, with full powers of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, full powers and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, each acting alone, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 31, 1995.
Signature Title
--------- -----
/S/Joseph Lichtenstein Vice President, Secretary, Treasurer
Joseph Lichtenstein and Director
II-4
<PAGE>
/S/Marvin Gordon Director
Marvin Gordon
/S/Phillip Frost Director
Phillip Frost, M.D.
/S/Isaac Kaye Director
Isaac Kaye
/S/Richard C. Pfenniger, Jr. Director
Richard C. Pfenniger, Jr.
/S/Peter S. Knight Director
Peter S. Knight
/S/Jack R. Borsting Director
Jack R. Borsting
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description Sequential Page No.
- ------ ----------- --------------------
<S> <C> <C>
5.1 Opinion of Robinson, St. John & Wayne 24
23.1 Consent of Ernst & Young LLP, Independent 26
Auditors
23.2 Consent of KPMG Peat Marwick LLP, Independent 27
Auditors
23.3 Consent of Robinson, St. John & Wayne
(included in Exhibit 5.1)
24.1 Power of Attorney (included on Page II-4
hereof)
</TABLE>
<PAGE>
Exhibit 5.1
November 13, 1995
Whitman Medical Corp.
485E U.S. Highway 1 South
Iselin, New Jersey 08830
RE: WHITMAN MEDICAL CORP.
FORM S-3 REGISTRATION STATEMENT COVERING 609,038 SHARES OF COMMON STOCK
BEING OFFERED BY A SELLING SHAREHOLDER
Gentlemen:
We have acted as counsel for Whitman Medical Corp., a New Jersey
corporation (the "Company"), in connection with the preparation and filing by
the Company of a Registration Statement on Form S-3 filed under the Securities
Act of 1933, as amended (the "Act") (the "Registration Statement"), relating
to the public resale by a Selling Shareholder of up to 609,038 shares (the
"Selling Shareholder Shares") of the Company's common stock, no par value (the
"Common Stock").
In that connection, we have examined the Articles of Incorporation and
By-laws of the Company, the minutes of the various meetings and consents of
the Board of Directors of the Company, certificates representing the Selling
Shareholder Shares, originals or copies of all such records of the Company,
agreements, certificates of public officials, certificates of officers and
representatives of the Company and others, and such other documents,
certificates, records, authorizations, proceedings, statutes and judicial
decisions as we have deemed necessary to form the basis of the opinion
expressed below. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to originals of all documents submitted to us as copies
thereof. As to various questions of fact material to such opinion, we have
relied upon statements and certificates of officers and representatives of the
Company and others.
<PAGE>
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a
corporation under the laws of the State of New Jersey.
2. The Selling Shareholder Shares have been duly authorized and are
validly issued, and when released from escrow to the Selling Shareholder, will
be fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
By giving the foregoing consent, we do not admit that we come within the
category of persons whose consent is required under Section 7 of the Act or
are otherwise within the category of persons described in Section 11(a)(4) of
the Act.
Very truly yours,
/s/ ROBINSON, ST. JOHN & WAYNE
ROBINSON, ST. JOHN & WAYNE
CONSENT OF INDEPENDENT
AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Whitman
Medical Corp. for the registration of 609,038 shares of its Common Stock and
to the incorporation by reference therein of our report dated May 5, 1995
(except for Note 14, as to which the date is June 15, 1995), with respect to
the consolidated financial statements of Whitman Medical Corp. included in its
Annual Report (Form 10-K) for the year ended March 31, 1995, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Metro Park, New Jersey
November 6, 1995
CONSENT OF INDEPENDENT
AUDITORS
As independent public accountants, we hereby consent to the
incorporation by reference in the Prospectus constituting a part of this
Registration Statement of our report dated December 21, 1994, relating to the
financial statements and schedules of Sanford Brown College, Inc. appearing in
the Company's Report on Form 8 filed with the Commission on February 22, 1995
and to all references to our firm included in this Registration Statement.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
St. Louis, Missouri
November 6, 1995
132099-1
