<PAGE>
As filed with the Securities and Exchange Commission on August 24, 1999.
Registration No. 333-85369
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MEDICAL ADVISORY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 52-1233960
<S> <C>
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
</TABLE>
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8050 Southern Maryland Boulevard
Owings, Maryland 20736
Telephone (301)855-8070
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Ronald W. Pickett
Chairman of the Board, President and Treasurer
Medical Advisory Systems, Inc.
8050 Southern Maryland Boulevard
Owings, Maryland 20736
Telephone (301)855-8070
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
Sol Genauer, Esq.
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-5533
Facsimile (215) 569-5555
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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 of 1933, 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 of 1933, 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. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
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Proposed Proposed
Title of each Class of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered registered Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, par value
$.005 per share....... 856,500 shares (1) $13.1875 (2) $11,295,094 (2) $3,140 (2)(3)
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</TABLE>
(1) This Registration Statement covers shares owned by certain selling
stockholders which shares may be offered from time to time by the selling
stockholders.
(2) Estimated solely for the purpose of calculating the registration fee.
Calculated in accordance with Rule 457(c) under the Securities Act of 1933,
as amended, based upon the average of the high and low sale price of the
Common Stock as reported by the American Stock Exchange on August 12, 1999.
(3) This amendment to the Registration Statement is being filed to increase the
number of shares being registered from 847,500 to 856,500. Of the total
registration fee payable for the registration of such shares, $3,108 was
paid upon filing of the original registration statement and the balance of
$32 is being paid with the filing of this amendment.
---------------
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 Section 8(a), may
determine.
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<PAGE>
PROSPECTUS
MEDICAL ADVISORY SYSTEMS, INC.
856,500 Shares of Common Stock
The selling stockholders named in this prospectus under "Selling
Stockholders" are offering and selling 856,500 shares of common stock pursuant
to this prospectus. Medical Advisory Systems, Inc. will not receive any of the
proceeds from the sale of these shares of common stock. Medical Advisory
Systems, Inc. will bear certain expenses incident to the registration of the
shares sold by the selling stockholders. See "Selling Stockholders" and "Plan
of Distribution."
Prospective investors should carefully consider "Risk Factors" beginning on
page 2 of this prospectus.
The selling stockholders, or their pledgees, donees, transferees or other
successors in interest, may sell their Medical Advisory Systems, Inc. common
stock in one or more transactions on the American Stock Exchange at market
prices prevailing at the time of sale or in private transactions at negotiated
prices.
The selling stockholders may use broker, dealers or other agents to sell
their shares. If this happens, the brokers, dealers or other agents may receive
discounts, concessions or commissions from the selling stockholders, or they
may receive commissions from purchasers of common stock for whom they acted as
agents. See "Plan of Distribution."
Our common stock is traded on the American Stock Exchange under the symbol
"DOC". On August 23, 1999, the last sale price of our common stock as reported
on the American Stock Exchange was 12 5/8 per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this Prospectus is August 24, 1999.
<PAGE>
TABLE OF CONTENTS
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Page
----
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About Medical Advisory Systems............................................. 1
Risk Factors............................................................... 2
Forward Looking Statements................................................. 7
Use of Proceeds............................................................ 8
Selling Stockholders....................................................... 8
Plan of Distribution....................................................... 10
Experts.................................................................... 11
Legal Matters.............................................................. 11
Where You Can Find More Information........................................ 11
</TABLE>
----------------
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. The selling stockholders
will not make an offer of their shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front page of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
<PAGE>
ABOUT MEDICAL ADVISORY SYSTEMS
Medical Advisory Systems, Inc. provides medical assistance products and
services, including:
. 24-hour-a-day medical information to the public via the Internet under
an exclusive contract with AmericasDoctor.com, Inc., which provides
real-time live online chats between physicians and Internet users.
. 24-hour-a-day medical information to individuals, groups, and
associations via 800/900 telephone numbers under our Doc-Talk program.
. 24-hour-a-day medical advice to ships at sea through a worldwide
telecommunications system, and ancillary services including training
programs, medical records maintenance, and medical cost containment
services;
. 24-hour-a-day call center services and assistance to Health Maintenance
Organizations (HMO's), multi-national corporations and the international
travel industry, and;
. customized pharmaceutical and medical supply kits which are sold to the
maritime and aviation industries.
We provide our services from our 24 hour-a-day Call Center located in
Owings, Maryland. We also manage an additional Internet call center facility
for AmericasDoctor.com, Inc. in Owings Mills, Maryland. We utilize an agent in
Hong Kong to maintain relations with maritime customers and participate in a
world-wide network of 24-hour call centers in 24 countries. We utilize other
centers in this network to provide certain services outside the United States.
Medical Advisory Systems, Inc. is a Delaware corporation incorporated on
December 1, 1981. Our principal office is located in Owings, Maryland. Our
mailing address is 8050 Southern Maryland Boulevard, Owings, Maryland 20736 and
our telephone number is 301-855-8070.
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RISK FACTORS
In considering whether to acquire shares of our common stock you should
consider carefully the risks associated with the ownership of our common stock.
These risks are described in detail below.
Significant portions of our revenues are generated by a single contract with
AmericasDoctor.com, Inc..
Approximately 21% of our revenues for fiscal year 1998 were derived from
Americas Doctor.com, Inc.. Under the AmericasDoctor call center service
agreement contract, we provide medical professionals who provide medical
information to America Online ("AOL") subscribers. We began to provide services
under the contract with AmericasDoctor during the fourth quarter of fiscal year
1998, and expect that revenue from this agreement during fiscal year 1999 will
substantially exceed revenue received during fiscal year 1998. The terms of the
agreement provide that we will be the exclusive provider of medical
professionals to AmericasDoctor. The agreement expires in 2000, with options to
renew by the Company until July 2003. We believe that our relations with
AmericasDoctor are satisfactory. Nevertheless, we can make no assurances that
AmericasDoctor will not terminate the agreement prior to the expiration of the
term. In addition, there currently exists a dispute between us and
AmericasDoctor over whether AmericasDoctor could refuse to honor the exercise
by us of our option to renew our agreement with AmericasDoctor. Any termination
or nonrenewal of the agreement with AmericasDoctor or the failure by
AmericasDoctor to meet its financial obligations under the agreement with us,
would have a material adverse effect on our business, prospects, results of
operations and financial condition.
Our success depends to a large extent upon the success of our relationships
with AmericasDoctor.com, Inc. and AOL.
We believe that the success of our Internet product offerings will be
largely dependent upon AmericasDoctor.com's agreement with AOL which expires in
June 2001. Termination of AmericasDoctor.com's agreement with AOL, or
termination of our agreement with AmericasDoctor would have a material adverse
effect on our development of Doc-Talk as well as upon our business, results of
operations and financial condition.
If we are not able to attract and keep employees with the requisite levels of
expertise, it could have a material adverse effect on our business, financial
condition and results of operation.
Our success depends on the continued contributions of key management and
technical personnel. We cannot assure you that we will be able to maintain
employees with the requisite levels of expertise or that we will be able to
attract and keep these employees in the future. Additionally, competition for
qualified personnel is intense in the healthcare industry. Our failure to
attract and keep employees with the requisite levels of expertise could have a
material adverse effect on our business, financial condition and results of
operation.
We cannot predict the level of market acceptance of our services.
Although we believe that there is a need for the delivery of medical
information and assistance products and services via the Internet and 800/900
telephone numbers, we are unable to make any assurances with respect to the
level of market acceptance of these products and services.
Our limited access to capital could result in our inability to obtain financing
in adequate amounts and on acceptable terms, which could have an adverse effect
on our business, financial condition and results of operations.
We have limited access to capital and there is no assurance that we will be
able to obtain the capital necessary and appropriate to operate our business.
We will require additional capital in order to:
. market and sell our services;
. develop new services;
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. implement our plan of operations;
. meet our working capital needs; and
. pay for capital expenditures.
Our failure to obtain financing in adequate amounts and on acceptable terms
could have an adverse effect on our business, financial condition and results
of operations.
Our common stock is thinly traded and its price is highly volatile.
Our Common Stock began trading on the American Stock Exchange, on July 28,
1999. Prior to being listed on the American Stock Exchange, our Common Stock
traded on the NASDAQ bulletin board . No active market for our common stock has
developed and there can be no assurance that an active market for the Common
Stock will develop.
The market for our Common Stock is highly volatile. The trading price of the
Common Stock is subject to wide fluctuations in response to a variety of
factors, including:
. quarterly variations in operating and financial results
. the signing or loss of a major contract
. announcements of new products or service offerings by us or our
competitors
. changes in prices of the products and services offered by us or our
competitors
. changes in our revenue and operating income growth rates
. changes in governmental regulation, and
. general conditions in the health care industry and the economy.
Statements or changes in opinions, ratings or earnings estimates made by
brokerage firms or industry analysts relating to the market in which we do
business or relating to us specifically have resulted, and could in the future
result, in an immediate and adverse effect on the market price of our Common
Stock. In addition, the stock market has from time to time experienced extreme
price and volume fluctuations that have particularly affected the market price
for the securities of many health care and Internet service-related companies
and which often have been unrelated to the operating performance of these
companies. These broad market fluctuations may adversely affect the market
price of our Common Stock.
The Internet market in which we and our clients compete may be characterized by
rapidly changing technology, evolving industry standards, frequent new product
and service announcements, introductions and enhancements, and changing
customer demands.
These market characteristics in our Internet service markets are heightened
by the emerging nature of the Internet. Accordingly, our future success will
depend on our ability to adapt to rapidly changing technologies, our ability to
adapt our solutions to meet evolving industry standards and our ability to
continually improve the performance, features and reliability of our products
to both changing customer demands and competitive product offerings. Our
failure to successfully adapt to such changes in a timely manner could have a
material adverse effect on our business, results of operations and financial
condition. Furthermore, there can be no assurance that we will not experience
difficulties that could delay or prevent the successful design, development,
testing, introduction or marketing of solutions, or that any new solutions or
enhancements to existing solutions will adequately meet the requirements of our
prospective customers and achieve any degree of significant market acceptance.
The health care industry has undergone significant changes in recent years,
and changes are expected to continue. Containing health care costs has become a
national priority in the United States. As a result, the
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health care industry has become increasingly dominated by managed health care
plans. We will need to upgrade and enhance our products and services on a
continual basis in order to remain competitive. In addition, we may also be
required to do additional development work to permit the implementation of our
products with increasingly larger customer bases. As part of this ongoing
development basis, we may conduct large scale upgrades which have a significant
impact on our products. There can be no assurance that continued industry
change will not adversely affect our ability to compete or that we will be able
to complete our product development efforts in a timely and efficient manner or
that our products and services will achieve ongoing market acceptance.
Competition is intense in the Internet customer service and health services
industries.
There are a number of competitors that offer products or services that
compete with us and AmericasDoctor.com, Inc., our most significant customer for
medical information and assistance products. Existing and potential clients may
also evaluate our products or services against the cost of internally developed
programs. Increased competition could result in pricing pressure and margin
erosion. In our existing business and as we offer new products or services, or
enter new markets, we may face increased competition from competitors, some of
which may have substantially greater financial, marketing and technical
resources than us. There can be no assurance that we will continue to compete
successfully with our existing competitors or will be able to compete
successfully with new competitors.
Our ability to sustain and grow our business and improve our results of
operations is largely dependent on our continuing ability to secure contracts
with new customers and to retain and expand contracts with existing customers.
Our success in securing new contracts and retaining existing contracts may
be adversely affected by factors outside of our control, such as government
regulatory action or adverse publicity. For example, certain of our contracts
could be subject to early termination by our customers if we were not in
compliance with any applicable government regulation.
Due to concerns arising in connection with the increasing popularity and use of
the Internet, laws and regulations may be adopted in the United States and in
other countries covering issues such as user privacy, acceptable content, or
taxation of services.
Such legislation could affect the growth in use of the Internet generally
and our business, either of which could have a material adverse effect on our
business, results of operations and financial condition. Additionally, future
laws and regulations may affect our ability of our clients to provide our
services through the Internet.
The health care industry is subject to extensive and evolving government
regulation at both the federal and state level relating to many aspects of our
business and the businesses of our clients, including the provision of health
care services, teleservicing, health care referral programs and health
maintenance organizations and other similar plans. These statutes and
regulations in many cases predate the development of Internet and telephone-
based health care information services and other interstate transmission and
communication of medical information and services. The literal language of
certain of these statutes and regulations governing the provision of health
care services including the practice of medicine, could be construed by
regulatory authorities to apply to certain of our activities, including,
without limitation. teleservicing activities which use physicians to provide
out-of-state personal health care services such as assessment and counseling
and information regarding appropriate health care providers and treatment time
frames. These statutes and regulations could also apply to certain activities
of our health care service customers when operating our programs. We have not
been made aware, nor are we aware, that any of our clients with respect to
operation of our programs, nor to our knowledge has any other organization
providing out-of-state teleservicing ever been made the subject of such
requirements by a regulatory authority. In addition, the literal language of
the statutes and regulations governing health maintenance organizations and
other plans that provide or arrange for the provision of health care services
for a prepaid or periodic charge could be construed by regulatory authorities
to apply to certain of our business activities. We have not been made aware,
nor are we aware that any other
4
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company providing teleservicing has ever been made, the subject of such
requirements by a regulatory authority. However, if regulators seek to enforce
any of the foregoing statutory and regulatory requirements, we, our employees
and/or our clients could be required to obtain additional licenses or
registrations, to modify or curtail the operation of our programs, to modify
the method of payment for our programs, or to pay fines or incur other
penalties.
There can be no assurance that we will not be subject to review or challenge
by government regulators under any of the foregoing statutes and regulations
that apply to health care services and products. In addition, additional laws
and regulations could be enacted in the future that would regulate the
Internet, our business or the use of our products and services. Any government
investigative or enforcement actions with respect to our business or the use of
our products or services could generate adverse publicity irrespective of the
final outcome, and could have a material adverse effect on our business.
We may become involved in significant medical liability actions which would
adversely affect our business, financial condition and results of operation.
In recent years, participants in the health care industry, including
physicians, nurses and other health care professionals, have been subject to an
increasing number of lawsuits alleging malpractice, product liability and
related legal theories, many of which involve large claims and significant
defense costs. Due to the nature of our business, we could become involved in
litigation regarding medical advice provided by the health professionals with
whom we have contracts with the risk of adverse publicity, significant defense
costs and substantial damage awards. We have not adopted policies and
procedures intended to reduce the risk of claims and, to date, we have not been
the subject of any claim involving the operation of a teleservicing center that
provides medical information. However, given the nature of the industries in
which we provide services, there can be no assurance that claims will not be
brought against us. Even if such claims ultimately prove to be without merit,
defending against them can be time consuming and expensive, and any adverse
publicity associated with such claims could have a material adverse effect on
our business, results of operations and financial condition.
While we maintain professional liability insurance, there can be no
assurance that claims in excess of our insurance coverage will not arise or
that all claims would be covered by such insurance. In addition, although we
have not experienced difficulty in obtaining insurance coverage in the past, we
expect to seek increased insurance coverage as our business grows. There can be
no assurance that we will be able to maintain existing insurance coverage or
obtain increased coverage on acceptable terms or at all.
Significant damage to our call center could adversely affect our business.
We maintain a medical telecommunications center in Owings, Maryland and
manage an additional AmericasDoctor.com facility in Owings Mills, Maryland. Our
operations depend on the adequate functioning of the computer and telephone
systems in our call centers. Although we have taken precautions to provide for
power, computer and telephone systems redundancy, there can be no assurance
that a fire or other disaster affecting the call center or an equipment failure
would not disable our systems for a significant period of time. Any significant
damage to our facilities or an equipment failure could have a material adverse
effect on our results of operations. Our current telecommunications
infrastructure will not be adequate for our future needs and we will need to
continue to expand such infrastructure to support our continued revenue growth.
Our computer systems and/or the computer systems of our customers or vendors
may not be Year 2000 compliant which could result in an inability to engage in
normal business activities for a period of time after January 1, 2000 which
could have a material adverse effect on our business, financial condition and
results of operation.
Although we believe our information technology systems will be Year 2000
compliant by the end of 1999, we cannot assure you that our information
technology systems will be Year 2000 compliant on a timely basis.
5
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We are in the process of developing a contingency plan in the event our systems
are not Year 2000 compliant on a timely basis.
The occurrence of an event not fully covered by insurance could have a material
adverse effect on our business, financial condition and results of operations.
Our business could be disrupted by a variety of occurrences, including:
. fires, explosions or blow outs;
. environmental hazards;
. hurricanes, floods, fires or other acts of God; or
. product liability occurrences.
Any of these occurrences could result in substantial losses due to:
. injury;
. loss of life;
. severe damage;
. clean-up responsibilities;
. regulatory investigation; or
. penalties and suspension of operations.
We maintain insurance coverage against some, but not all, potential risks.
However, we cannot assure you that:
. insurance will be adequate to cover all losses or exposure for
liability;
. insurance will continue to be available at premium levels that justify
its purchase; or
. insurance will continue to be available at all.
If an event occurs which is not fully covered by insurance, it could have a
material adverse effect on our business, financial condition and results of
operation.
We intend to evaluate future acquisitions of complementary businesses as part
of our business strategy. Our acquisitions may adversely affect you in the
following ways:
. potentially dilutive issuances of equity securities
. the use of our cash resources
. the incurrence of additional debt and increased goodwill
. intangible assets and amortization expense which could negatively impact
our profitability.
In addition, acquisitions involve numerous risks, including difficulties in
the assimilation of the operations and products of the acquired companies, the
diversion of management's attention from other business concerns, risks of
entering markets in which we have no or limited direct prior experience, and
the potential loss of key employees of the acquired company.
Future sales of our common stock in the public market could adversely affect
our stock price and our ability to raise funds in new stock offerings.
There were approximately 4,461,000 million shares of our common stock
outstanding as of August 23, 1999. In addition, we intend to continue to issue
common stock in connection with acquisitions or in other transactions.
6
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Future sales of substantial amounts of our common stock in the public market,
or the perception that these sales could occur, could adversely affect
prevailing market prices of our common stock and could impair our ability to
raise capital through future offerings of equity securities.
Anti-takeover provisions may make it more difficult for a third party to
acquire control of us, could adversely affect the market price of our common
stock and could reduce the amount that our stockholders might receive if we are
sold.
"Anti-takeover" provisions contained in Delaware law and in our articles of
incorporation, bylaws and contracts could make it more difficult for a third
party to acquire control of us, even if that change in control would be
beneficial to our stockholders. These provisions could adversely affect the
market price of our common stock and could reduce the amount that our
stockholders might receive if we are sold.
FORWARD LOOKING STATEMENTS
Some of the information in this prospectus may contain "forward-looking
statements". Forward-looking statements can be identified by the use of
forward-looking language such as "will likely result," "may," "are expected
to," "is anticipated," "estimate," "projected," "intends to" or other similar
words. Our actual results, performance or achievements could differ materially
from the results expressed in, or implied by, these forward-looking statements.
Forward-looking statements are subject to certain risks and uncertainties,
including but not limited to the following risks which are described in detail
under "Risk Factors" beginning on page 2 hereof:
. limited access to capital;
. dilution which could result from issuance of additional shares pursuant
future transactions;
. ability to maintain level of employee expertise;
. risks associated with Year 2000 issues;
. ability to implement growth strategy;
. relationship with AmericasDoctor.com and AOL
. volatility of our common stock
. acceptance of our services
. changing internet environment
. laws affecting the internet
. future acquisitions
. medical liability suits and actions
. anti-takeover restrictions; and
. operating hazards and insurance coverage.
When considering these forward-looking statements, you should keep in mind
these risk factors and other cautionary statements in this prospectus. You
should not place undue reliance on any forward-looking statement which speaks
only as of the date made.
7
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USE OF PROCEEDS
All net proceeds from the sale of our common stock will go to the selling
stockholders selling common stock under this prospectus. We will not receive
any proceeds from the sale of the common stock sold by the selling
stockholders.
SELLING STOCKHOLDERS
The following table provides certain information regarding the beneficial
ownership of our common stock by the selling stockholders prior to and after
the offering. Beneficial ownership is determined under the rules of the SEC,
and generally includes voting or investment power with respect to securities.
After the offering, none of the selling stockholders will own any shares of our
common stock.
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<CAPTION>
Number of Number of Number of
Shares Owned Shares Being Shares Owned
Prior to the Offered for After the
Selling Stockholder Offering Sale Offering
------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Stephen F. Osborne, M.D.................. 4,000 4,000 0
William F. Woodward, M.D................. 4,000 4,000 0
Diana Lee Smith, M.D..................... 4,000 4,000 0
Theodore G. Konen, M.D................... 4,000 4,000 0
F. Jack Brinley, M.D..................... 500 500 0
Robert Cowles............................ 5,000 5,000 0
Frank Kinnett............................ 5,000 5,000 0
Thomas P. Carroll........................ 1,500 1,500 0
Jon D. and Wendy Binnix.................. 10,000 10,000 0
Christopher & Almedena Carroll........... 2,000 2,000 0
John P. Margeson......................... 16,500 16,500 0
James C. Simmons Jr...................... 22,500 22,500 0
David H. Talbot.......................... 5,000 5,000 0
Health Reform Opportunities, LP.......... 60,000 60,000 0
Shawn Casey.............................. 1,500 1,500 0
Tim & Heidi Quinn........................ 5,000 5,000 0
Robert H. & Susan W. Gresham............. 3,750 3,750 0
Louis H. Gump............................ 2,500 2,500 0
Robert L. Callahan III Trust
R.L. Callahan, Profit Sharing Plan, U/A
dtd 3/20/97............................ 3,750 3,750 0
Roger E. Zotti........................... 3,000 3,000 0
James W. Perry........................... 5,000 5,000 0
H. Ross Arnold, Jr....................... 4,000 4,000 0
Verna G. Perry........................... 5,000 5,000 0
Rennie B. Skinner........................ 8,333 8,333 0
Louise B. Shane.......................... 5,000 5,000 0
Jeff Brenner............................. 10,000 10,000 0
Patricia D. Casey........................ 1,500 1,500 0
Dr. James J. or Lenore S. Santoro........ 6,000 6,000 0
Wm. F. & Marian S. Wilhoit............... 5,000 5,000 0
Robert C. & Kathy A LaRose............... 17,000 17,000 0
Catholic Order of Foresters.............. 10,000 10,000 0
David H. Talbot--IRA..................... 9,000 9,000 0
Jack Ray Farm, LP........................ 5,000 5,000 0
Ursula Lohr Trust........................ 5,000 5,000 0
John Ventresca........................... 10,000 10,000 0
</TABLE>
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<TABLE>
<CAPTION>
Number of Number of Number of
Shares Owned Shares Being Shares Owned
Prior to the Offered for After the
Selling Stockholder Offering Sale Offering
------------------- ------------ ------------ ------------
<S> <C> <C> <C>
John C. Alston......................... 5,000 5,000 0
Contract Supplies & Services Inc....... 5,000 5,000 0
Ventresca & Sons Inc. Profit Sharing
Plan --1/1/73......................... 5,000 5,000 0
Virginia W. Lippert.................... 5,000 5,000 0
John Michael Winesette................. 5,000 5,000 0
Eureka Concrete Const. Inc............. 5,000 5,000 0
David Ventresca........................ 2,500 2,500 0
Rodger W. Fauber....................... 15,000 15,000 0
Europa International Inc............... 21,000 21,000 0
Valor Capital Management L.P........... 21,000 21,000 0
Bob Sunness............................ 5,000 5,000 0
Henry Royer............................ 5,000 5,000 0
J. Michael Halwig, M.D................. 2,500 2,500 0
Glazebrook & Geeslin, MDPC Profit
Sharing Trust......................... 5,000 5,000 0
Charles U. Slick....................... 1,700 1,700 0
Jerome L. Rhattigan.................... 5,000 5,000 0
Jan O. & Janice M. Miller.............. 5,000 5,000 0
Timberline Corporation................. 5,000 5,000 0
David L. Jordan........................ 7,500 7,500 0
Terry P. Ginthner...................... 15,000 15,000 0
William A. Pope........................ 1,700 1,700 0
Gary W. Shirley........................ 2,433 2,433 0
Universal Partners, L.P................ 4,000 4,000 0
Real Estate Express of Myrtle Beach.... 5,000 5,000 0
Edna L. Hayden......................... 2,500 2,500 0
Robert R. Shubbs Tte; U/W Carolyn
Thompson Markert;
FBO James Andrew Markert.............. 1,000 1,000 0
Rhonda L. Motley....................... 2,833 2,833 0
Michael E. & Barbara L. Hayden......... 2,500 2,500 0
William P. O'Reilly.................... 17,000 17,000 0
Drax Holdings, L.P..................... 8,000 8,000 0
William McBrayer....................... 1,666 1,666 0
Wachtel & Co........................... 7,335 7,335 0
Henry Partners, L.P.................... 45,000 45,000 0
Jor-El Ltd............................. 60,000 60,000 0
Mathew Hayden.......................... 20,000 20,000 0
Vince Buczek........................... 20,000 20,000 0
First Atlanta Financial Services
Corp.................................. 5,000 5,000 0
Bellfield Carter, Jr. IRA.............. 5,000 5,000 0
Attkisson, Carter & Akers.............. 10,000 10,000 0
Brett Thackston........................ 89,750 89,750 0
Tim Moody.............................. 3,750 3,750 0
Timothy Terry.......................... 1,875 1,875 0
Kristin Montet......................... 1,875 1,875 0
Ethel Ware Carter...................... 61,375 61,375 0
Ronald L. Attkisson.................... 61,375 61,375 0
</TABLE>
9
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders, or their pledgees, donees, transferees or other
successors in interest may, from time to time, sell all or a portion of the
shares at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such market prices or at negotiated prices.
The selling stockholders may offer their shares at various times in one or more
of the following transactions:
. on any national securities exchange, or other market on which our common
stock may be listed at the time of sale, including the American Stock
Exchange;
. in the over-the-counter market;
. through block trades 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;
. through purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
. in ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. through options, swaps or derivatives;
. in privately negotiated transactions;
. in transactions to cover short sales; and
. through a combination of any such methods of sale.
In addition, the selling stockholders may also sell their shares that
qualify for sale pursuant to Rule 144 under the Securities Act of 1933, under
the terms of such rule rather than pursuant to this prospectus.
The selling stockholders may sell their shares directly to purchasers or may
use brokers, dealers, underwriters or agents to sell their shares. In effecting
sales, brokers and dealers engaged by the selling stockholders may arrange for
other brokers or dealers to participate. Brokers or dealers may receive
commissions, discounts or concessions from a selling stockholder or, if any
such broker-dealer acts as agent for the purchaser of such shares, from such
purchaser in amounts to be negotiated. Such compensation may, but is not
expected to, exceed that which is customary for the types of transactions
involved. Broker-dealers may agree with a selling stockholder to sell a
specified number of such shares at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for a selling
stockholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the selling stockholders. Broker-
dealers who acquire shares as principal may thereafter resell such shares from
time to time in transactions, which may involve block transactions and sales to
and through other broker-dealers, including transactions of the nature
described above, in the over-the-counter market or otherwise at prices and on
terms then prevailing at the time of sale, at prices then related to the then-
current market price or in negotiated transactions. In connection with such
resales, broker-dealers may pay to or receive from the purchasers of such
shares commissions as described above.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act of
1933.
From time to time the selling stockholders may be engaged in short sales,
short sales against the box, puts and calls and other hedging transactions in
our securities, and may sell and deliver the shares in connection with such
transactions or in settlement of securities loans. These transactions may be
entered into with broker-dealers or other financial institutions. In addition,
from time to time, a selling stockholder may pledge its shares pursuant to the
margin provisions of its customer agreements with its broker-dealer. Upon
delivery of the shares or a default by a selling stockholder, the broker-dealer
or financial institution may offer and sell the pledged shares from time to
time.
10
<PAGE>
EXPERTS
The consolidated balance sheet as of October 31, 1998 and the consolidated
statements of earnings, stockholders' equity and cash flows for each of the two
years in the period ended October 31, 1998, incorporated by reference in this
prospectus, have been incorporated herein in reliance upon the report of
Stefanou & Company, LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing.
LEGAL MATTERS
An opinion has been rendered by the law firm of Blank Rome Comisky &
McCauley LLP, One Logan Square, Philadelphia, Pennsylvania, to the effect that
the shares of the Company's common stock offered by the selling stockholders
under this prospectus are legally issued, fully paid and non-assessable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC under the Securities Exchange Act. You may read and
copy any reports, statements and other information we file with the SEC at the
SEC's public reference room at 450 Fifth Street, NW, Washington, D.C., 20549
and at the SEC's regional offices in Illinois and New York. You may obtain
information on the operation of the public reference rooms by calling the SEC
at 1-800-SEC-0330. Our SEC filings are also available on the SEC's Internet
site (http://www.sec.gov). You may also inspect our SEC filings and other
information concerning Medical Advisory Systems, Inc. at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006-1881.
We have filed a registration statement on Form S-3 to register the shares of
common stock offered under this prospectus. This prospectus is a part of the
registration statement on Form S-3 and constitutes a prospectus of Medical
Advisory Systems, Inc. As allowed by SEC rules, this prospectus does not
contain all the information you can find in the registration statement on Form
S-3 or the exhibits to the registration statement on Form S-3. For such
additional information, you must read that registration statement along with
its exhibits.
The SEC also allows us to "incorporate by reference" the information we file
with the SEC, which means we can disclose information to you by referring you
to another document filed separately with the SEC. Information incorporated by
reference is deemed to be part of this prospectus. Later information filed by
us with the SEC updates and supersedes this prospectus.
This prospectus incorporates important business and financial information
about Medical Advisory Systems that is not included in or delivered with this
prospectus. Copies of any of that information are available without charge to
any person to whom this prospectus is delivered, upon written or oral request.
Written requests for those documents should be directed to the Secretary,
Medical Advisory Systems, Inc., 8050 Southern Maryland Boulevard, Owings,
Maryland 20736, and telephone requests may be directed to the Secretary at
(301) 855-8070.
We incorporate by reference the documents listed below which we previously
filed with the SEC:
1. Our annual report on Form 10-KSB for the year ended October 31, 1998,
which we filed January 29, 1999;
2. Our quarterly reports on Form 10-QSB for the quarters ended January 31,
1999 and April 30, 1999.
3 The description of our common stock which is contained in our
registration statement on Form 8- A/A, which we filed on August 13,
1999.
All documents we file with the SEC under Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act after the date of this prospectus until this
offering is completed will be deemed to be incorporated by reference in this
prospectus and to be a part of this prospectus from the date that document is
filed.
11
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities being registered, all of which are
being borne by the registrant.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 3,140
Accounting Fees and Expenses..................................... 2,500
Legal Fees and Expenses.......................................... 10,000
Printing Fees and Expenses....................................... 2,000
Miscellaneous.................................................... 1,000
-------
Total.......................................................... $18,640
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law, which enables a corporation in its original certificate of incorporation
or an amendment thereto to eliminate or limit the personal liability of a
director for violations of the director's fiduciary duty, except (i) for any
breach of the director's duty of loyalty to the corporation or it stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the
Delaware General Corporation Law (providing for liability of directors for the
unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit.
Section 145 of the Delaware General Corporation Law empowers the Company to
indemnify, subject to the standards set forth therein, any person in connection
with any action, suit or proceeding brought before or threatened by reason of
the fact that the person was a director, officer, employee or agent of such
company, or is or was serving as such with respect to another entity at the
request of such company. The Delaware General Corporation Law also provides
that the Company may purchase insurance on behalf of any such director,
officer, employee or agent.
The Company's Restated Certificate of Incorporation, as amended, provides in
effect for the elimination of the personal liability of the Company's directors
for breaches of fiduciary duty and for the indemnification by the Company of
each director and officer of the Company, in each case, to the fullest extent
permitted by applicable law.
The Company purchases and maintains insurance on behalf of any person who is
or was a director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise against any liability asserted against him or her and
incurred by him or her in any such capacity, or arising out of his or her
status as such, whether or not the Company would have the power or the
obligation to indemnify him or her against such liability under the provisions
of the Company's Certificate of Incorporation.
Item 16. Exhibits.
<TABLE>
<C> <S>
5.1 Opinion of Blank Rome Comisky & McCauley LLP as to the validity of the
issuance of the
common stock of Medical Advisory Systems, Inc. being registered.
23.1 Consent of Stefanou & Company, LLC, independent auditors.
23.2 Consent of Blank Rome Comisky & McCauley LLP (included in Exhibit 5.1).
</TABLE>
- --------
* Previously filed
II-1
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) include any additional or changed material information on
the plan of distribution.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-3 or
Form S-8, and the information required in a post-effective amendment is
incorporated by reference from periodic reports filed by the small
business issuer under the Exchange Act.
(2) For determining liability under the Securities Act of 1933 treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer 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 small business issuer 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-2
<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 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 of Owings, state of Maryland on August 24, 1999.
Medical Advisory Systems, Inc.
/s/ Ronald W. Pickett
By: _________________________________
Ronald W. Pickett,
Chairman of the Board and
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on August 24,
1999 in the capacities indicated.
Name Title
/s/ Ronald W. Pickett Chairman of the Board and President
_________________________________
Ronald W. Pickett
/s/ Thomas M. Hall Chief Executive Officer and Director
_________________________________ (Principal Executive Officer, Principal
Thomas M. Hall, M.D., M.I.M. Financial Officer and Principal Accounting
Officer)
/s/ Robert P. Crabb Director
_________________________________
Robert P. Crabb
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
5.1 Opinion of Blank Rome Comisky & McCauley LLP as to the validity of the
issuance of the common stock of Medical Advisory Systems, Inc. being
registered.
23.1 Consent of Stefanou & Company, LLC, independent auditors.*
23.2 Consent of Blank Rome Comisky & McCauley LLP (included in Exhibit 5.1).
</TABLE>
- --------
* Previously filed
II-4
<PAGE>
EXHIBIT 5.1
Blank Rome Comisky & McCauley LLP
COUNSELORS AT LAW
One Logan Square
Philadelphia, Pennsylvania 19103-6998
(215) 569-5500
Fax: (215) 569-5555
August 23, 1999
Medical Advisory Systems, Inc.
8050 Southern Maryland Boulevard
Owings, Maryland 20736
Ladies and Gentlemen:
We have acted as counsel to Medical Advisory Services, Inc. (the "Company")
in connection with the preparation of the Registration Statement on Form S-3
("Registration Statement") to be filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the registration of 856,500 shares of common stock, $.005 par value ("Common
Stock"), which have been included in the Registration Statement for the
respective accounts of the persons identified in the Registration Statement as
selling stockholders.
Although as counsel to the Company we have advised the Company in connection
with a variety of matters referred to us by it, our services are limited to
specific matters so referred. Consequently, we may not have knowledge of many
transactions in which the Company has engaged or its day-to-day operations.
In rendering this opinion, we have examined such documents as we deemed
necessary, including: (i) the Company's Restated Certificate of Incorporation
and Bylaws, as amended, (ii) the Company's minute books and (iii) the
Registration Statement. We have assumed and relied, as to questions of fact and
mixed questions of law and fact, on the truth, completeness, authenticity and
due authorization of all documents and records examined and the genuineness of
all signatures.
We have not made any independent investigation in rendering this opinion
other than the document examination described. Our opinion is therefore
qualified in all respects by the scope of that document examination. We make no
representation as to the sufficiency of our investigation for your purposes.
This opinion is limited to the Delaware General Corporation Law. In rendering
this opinion we have assumed (i) compliance with all other laws.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock are legally issued, fully paid and non-assessable.
This opinion is given as of the date hereof. We assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or any changes in laws which may hereafter
occur.
This opinion is strictly limited to the matters stated herein and no other
or more extensive opinion is intended, implied or to be inferred beyond the
matters expressly stated herein.
<PAGE>
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to us under the caption "Legal Matters" in the
Registration Statement.
Sincerely,
/s/ Blank Rome Comisky & McCauley
LLP
_____________________________________
BLANK ROME COMISKY & McCAULEY LLP
