<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1998
Registration No. ________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERICAN HEALTHCHOICE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 11-2931252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1300 WEST WALNUT HILL LANE, SUITE 275 DR. JOSEPH W. STUCKI
IRVING, TEXAS 75038 1300 WEST WALNUT HILL LANE, SUITE 275
(972) 751-1900 IRVING, TEXAS 75038
(972) 751-1900
(Address, including zip code, and telephone number, (Name, address, including zip code, and
including area code, of registrant's principal executive offices) telephone number, including area code,
of agent for service)
</TABLE>
Copies to:
RONALD L. BROWN, ESQ.
GLAST, PHILLIPS & MURRAY, P.C.
2200 ONE GALLERIA TOWER, 13355 NOEL ROAD
DALLAS, TEXAS 75240
(972) 419-8300
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of the Registration Statement,
as determined by market conditions
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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, as amended (the "Securities Act"), 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. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================== ========================= ========================= ========================= =========================
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered(1) Share(2) Price(2) Registration Fee(2)
- -------------------------- ------------------------- ------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 Par Value 95,000,000 shares $0.1094 $10,393,000 $3,066
========================== ========================= ========================= ========================= =========================
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act, this
Registration Statement also covers an indeterminate number of
additional shares that may be issuable in connection with changes in
the conversion price and resulting from stock splits, stock dividends
or similar transactions.
(2) Represents the average of the bid and asked prices of the Registrant's
Common Stock on October 5, 1998, in accordance with Rule 457(c) under
the Act.
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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, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION
95,000,000 SHARES
AMERICAN HEALTHCHOICE, INC.
COMMON STOCK
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This is a public offering of shares of common stock of American
HealthChoice, Inc. Selling stockholders identified in this Prospectus are
offering all of the shares to be sold in the offering. American HealthChoice
will not receive any of the proceeds from the offering and will pay its expenses
of the offering.
The selling stockholders may use brokers or dealers to sell the shares
for them. Sales may be made at the market price on the date of sale or at
negotiated prices. See "Plan of Distribution" on page 8 for more information.
Our common stock is traded on the Nasdaq SmallCap Market under the
symbol "AHIC". On October 5, 1998, the closing bid price of our common stock was
$.094 per share and the closing asked price was $.125 per share.
--------
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------
American HealthChoice's principal executive offices are located at 1300
West Walnut Hill Lane, Suite 275, Irving, Texas 75038, and its telephone number
is (972) 751-1900.
Prospectus dated ___________, 1998
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION .................. 2
RISK FACTORS ........................... 3
THE COMPANY ............................ 7
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE ............... 7
SELLING STOCKHOLDERS ................... 8
PLAN OF DISTRIBUTION ................... 8
DESCRIPTION OF CAPITAL STOCK ........... 9
LEGAL MATTERS .......................... 10
EXPERTS ................................ 10
</TABLE>
AVAILABLE INFORMATION
American HealthChoice has filed under the Securities Act of 1933, as
amended (the "Securities Act"), with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") with respect to its shares of common stock offered hereby. This
Prospectus was filed as a part of the Registration Statement. As permitted by
the rules and regulations of the Commission, this Prospectus omits certain
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with respect to
American HealthChoice and its common stock.
American HealthChoice is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy and information statements, and other
information with the Commission. Reports, proxy statements and other information
filed by American HealthChoice with the Commission pursuant to the informational
requirements of the Exchange Act may be read and copied, at prescribed rates, at
the Commission's Public Reference Room maintained at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. This information should also be available for
inspection and copying at the Commission's New York regional office, Seven World
Trade Center, Suite 1300, New York, New York 10007, and at its Chicago regional
office, Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission also maintains an Internet site that
contains reports, proxy and information statements and other information
regarding issuers, like American HealthChoice, that file electronically with the
Commission. The address of the Commission's Internet site is http://www.sec.gov.
No person has been authorized to give any information or to make any
representation other than as contained or incorporated by reference in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by American HealthChoice. Neither the
delivery of this Prospectus nor any sale of common stock made hereunder shall,
under any circumstances, create any implication that the information contained
herein is correct as of any date subsequent to the date hereof. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy the
securities offered by this Prospectus to any person or by anyone in any
jurisdiction in which it is unlawful to make such an offer or solicitation.
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<PAGE> 4
RISK FACTORS
You should carefully consider the following factors and other
information in this Prospectus before deciding to invest in shares of common
stock.
LACK OF LIQUIDITY; ONGOING OPERATING LOSSES
American HealthChoice has operated at a loss for the last three years.
It has a cash flow deficit and substantial net capital deficiency. There is no
assurance it will operate profitably in the future. The company must raise
additional funds to meet company obligations. Funds may be raised through sales
of debt or equity, or sales of assets. The terms of such sales could be
detrimental to current stockholders. Failure to raise additional funds and
reduce its cash flow deficit could cause the company to cease operating as an
ongoing concern.
DELAY IN COLLECTING RECEIVABLES
American HealthChoice depends on the revenues from its existing clinics
to fund operations. A significant part of these revenues comes from treatment of
patients involved in accidents. Payment is often delayed until a personal injury
claim or lawsuit is settled by the patient. The delay causes cash flow
shortages. Also, there is a risk of nonpayment if the claims or lawsuits are not
settled.
CHANGE IN MARKETING LAWS
In September 1997, the laws changed to prevent the company from
directly marketing its services to potential patients who are accident victims.
The change has resulted in fewer patients. It also has resulted in an increase
in the number of patients who do not pay their bills. This has magnified the
company's cash flow problems and operating losses.
ASSETS PLEDGED AS SECURITY FOR DEBENTURES; DEFAULT
In August 1998, American HealthChoice issued $3,385,000 in debentures
to the selling stockholders. The company pledged all of its tangible and
intangible personal property as collateral for repayment of the debentures.
Default by the company under the debentures could result in foreclosure on the
collateral. Events of default include:
o the company's stockholders failure to approve the issuance of
common stock upon conversion of the debentures; the
stockholders will vote on this matter at the annual meeting on
November 20, 1998;
o the company' failure to maintain its listing on the Nasdaq
Small Cap Market;
o failure to make required payments;
o bankruptcy, insolvency or receivership of the company;
o judgments against the company in excess of $500,0000 in any
lawsuit; and
o failure to maintain this Prospectus in effect until all of the
shares are sold;
Upon any default, the selling stockholders may elect a number of
remedies. The remedies include the right to declare the full amount of the
debentures due, with 15% interest, and foreclose on the collateral. If the
default is due to the stockholders' failure to approve the issuance of shares on
conversion, the remedies also include the right to convert principal and
interest for up to 20% of the outstanding common stock, declare the remaining
debentures payable at 125% of the sum of principal and accrued interest, and
foreclose on the collateral.
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CONVERSION OF DEBENTURES; NEGATIVE EFFECT ON STOCK PRICE
The debentures convert into common stock at a price equal to 80% of the
average closing bid price of the common stock for the five trading days
preceding each conversion date. Less than all of the debentures may be
converted, so there may be multiple conversions. Debentures cannot be converted
if the holder and its affiliates would beneficially own more than 4.9% of the
outstanding common stock after the conversion. The selling stockholders will
most likely convert a portion of the debentures and then sell shares under this
Prospectus before converting additional debentures. Assuming all of the
debentures had been converted on October 6, 1998, the selling stockholders would
own approximately 52.1 million shares of common stock. The selling stockholders'
right to convert into this number of shares has a negative effect on the trading
price of the common stock. This negative effect reduces the trading price, which
results in more shares being issuable on conversion. The company can convert the
unpaid portion of the debentures into common stock on August 24, 2001.
LOSS OF NASDAQ LISTING IF STOCK PRICE NOT MAINTAINED
The company's stock must trade for at least $1.00 per share for the
company to maintain its listing on the Nasdaq SmallCap Market. Nasdaq has
notified the company it does not meet the minimum listing requirements. The
company had a hearing before Nasdaq on September 17, 1998. No decision has been
rendered by Nasdaq. The stockholders will vote on a proposed 1-for-25 reverse
stock split at the annual meeting on November 20, 1998. If approved, the company
expects the common stock to trade for at least $1.00 per share, although there
can be no assurance. The convertibility of the debentures could cause the stock
to trade at less than the required price. In such event, the company could lose
its listing. Failure to maintain its listing is an event of default under the
debentures. See "Assets Pledged as Collateral; Default", above, for a discussion
of ramifications of default.
COMPETITION
The health care industry in general is highly competitive. Many
companies have been organized to pursue the acquisition of medical clinics. Many
of these manage such clinics, employ clinic physicians or provide services to
practice associations. Many of these companies have longer operating histories
and greater resources than the company. Large hospitals, other
multi-disciplinary clinics and health care companies, HMOs, and insurance
companies are also engaged in activities similar to those of the company. The
industry is also subject to continuing changes regarding how services are
provided and how care providers are selected. Patients have many choices of
primary care providers. The primary care providers at the Company's clinics
represent only a small percentage of the providers in a given geographical area.
In addition, potential patients may be required to see physicians that have
contracts with particular managed care companies. The company's clinics do not
have contracts with all managed care companies. Consequently, the company's
clinics may not be a viable option for some patients. There can be no assurance
that the company will be able to compete effectively in this market,
particularly as additional competition enters the market, or that such
competition will not impact the company's ability to operate profitably.
CONFLICTS OF INTEREST
Dr. Joseph W. Stucki, the President and Chief Executive Officer of the
company, owns a minority interest in other medical clinics, none of which
compete with the company's clinics. In addition, Dr. Stucki owns United Health
Services, a provider of management services to chiropractors throughout the
United States.
GOVERNMENT REGULATION
The provision of health care services is subject to numerous Federal,
state and local laws, regulations and rules. These laws, regulations and rules
are subject to change. Many of them contain ambiguous standards that have seldom
or never been interpreted authoritatively by the courts or administrative
agencies. The company believes it is in substantial compliance with applicable
laws and regulations. However, situations may arise in which a third party or
governmental agency argues that the company is not in compliance. The penalties
for non compliance could include denial of the right to conduct business in the
jurisdiction or other significant civil or criminal penalties.
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<PAGE> 6
The laws of a number of states prohibit a corporation from engaging in
the practice of medicine or otherwise exercising control over professionals who
are engaged in the practice of medicine or other disciplines. Certain state laws
also prohibit "fee splitting" between physicians and non-physicians. Federal law
prohibits the offer, payment, solicitation or receipt of any form of
remuneration in return for the referral of Medicare or state health program
patients or patient care opportunities, or in return for the purchase, lease or
order of items or services that are covered by Medicare or state health program.
The company does not believe that its operations constitute the practice of
medicine so long as licensed physicians exercise complete control over the
provision of all medical services. All medical services performed in the
company-owned clinics are conducted or supervised by licensed physicians who
have sole control over and are solely responsible for the treatment of patients.
IMPACT OF HEALTH CARE REFORM AND CHANGES IN PAYMENT FOR MEDICAL SERVICES
There are numerous initiatives at the Federal and state levels for
comprehensive reforms affecting the payment for and availability of health care
services. Certain of these health care proposals, if adopted, could adversely
affect the company. The reform movement may also effect cost containment
decisions of third party payors and other payment factors over which the company
has no control. Because the company derives its revenues from the revenues
generated by its clinics, further reductions in payment to physicians generally
or other changes in payment for health care services could have an adverse
effect on the company. Concern about the potential effect of the proposed reform
measures has contributed to the volatility of stock prices of companies in
health care and related industries and may similarly affect the price of the
common stock following this offering.
RISKS ASSOCIATED WITH CAPITATED FEE ARRANGEMENTS
An increasing percentage of patients are coming under the control of
managed care entities. American HealthChoice believes its success will, in part,
be dependent on its ability to negotiate contracts with HMOs, employer groups,
and other private third-party payors to provide services on a risk-sharing or
capitated basis by some or all of the physicians affiliated with the company's
clinics. Under some agreements, the healthcare provider accepts a pre determined
amount per month per patient (a capitated fee) in exchange for providing all
necessary covered services to the patient covered under the agreement. Such
contracts pass much of the risk of providing care from the payor to the
provider. The proliferation of such contracts in markets served by the company
should result in greater predictability in revenues, but greater
unpredictability of expenses. The company may not be able to negotiate
satisfactory arrangements on a risk-sharing or capitated basis. In addition to
the extent that patients or enrollees covered by such contracts require more
frequent or extensive care than is anticipated, operating margins may be
reduced, or in the worst case, revenues derived from such contracts may be
insufficient to cover the costs of the services provided. As a result, the
company's clinics may incur additional costs, which would reduce or eliminate
anticipated earnings under such contracts. Any such reduction or elimination of
earnings could have a material adverse effect on the company.
DEPENDENCE ON A CERTAIN MANAGED CARE ORGANIZATION
A significant portion of the revenues of the company's business is
derived from shared-risk capitated arrangements and traditional fee-for-service
contracts. The company may enter into significant additional capitation
arrangements. The loss of any existing or future arrangements or contracts or a
significant decline in the number of enrollees could have a material adverse
effect on the company's business.
RISKS ASSOCIATED WITH MEDICAL SERVICES
The company's clinics are involved in the delivery of health care
services to the public. Therefore, the individual physicians are exposed to the
risk of professional liability claims. Claims of this nature, if successful,
could result in substantial damage awards to the claimants which may exceed the
limits of any applicable insurance coverage. The company does not control the
practice of medicine by individual physicians affiliated with its clinics or
other compliance with certain regulatory and other requirements directly
applicable to physicians. The physicians at the company's clinics are not
obligated to indemnify the company in the event of any loss sustained by the
company in connection with such physicians' malpractice or other liability.
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DEPENDENCE ON KEY PERSONNEL
The company believes that its future success will depend to a
significant extent on the efforts and abilities of Dr. Joseph W. Stucki,
Chairman of the Board of Directors, Chief Executive Officer and President of the
Company. The loss of the services of any or all of its key personnel could have
a material adverse effect on the company. The company has entered into an
employment agreement with Dr. Stucki, although Dr. Stucki may terminate his
employment at any time without penalty.
CONTROL BY PRESENT STOCKHOLDERS
Neither the Company's Certificate of Incorporation (as amended, the
"Certificate") nor its Bylaws (the "Bylaws") provide for cumulative voting. The
company's Directors are elected by a majority vote of holders of the company's
common stock. The company's present stockholders will control the company
through their ownership of a majority of the company's outstanding shares of
common stock and, thus will have the ability to elect all of the company's
Directors.
NO DIVIDENDS
Since its formation, American HealthChoice has not paid any cash
dividends on its common stock. The company intends to retain earnings, if any,
to help fund operations and finance future growth of its business. Accordingly,
the company does not anticipate paying any cash dividends n the foreseeable
future.
POSSIBLE VOLATILITY OF STOCK PRICE
The common stock is currently traded on the Nasdaq SmallCap Market
under the symbol "AHIC". Sales of a substantial number of shares of common
stock, or the perception that such sales could occur, could adversely affect
prevailing market prices for common stock. No prediction can be made regarding
the effect that future sales of common stock will have on the market price of
shares. Various factors, such as the company's operating results, introduction
of products or services by competitors, changes in laws, rules or regulations,
or allegations of stock manipulation, may have a significant impact on the
market price of the company's securities. Further, the market prices for the
securities of public companies often experience wide fluctuations which are not
necessarily related to the operating performance of such public companies.
LIMITATION ON OFFICER AND DIRECTOR LIABILITY
As permitted by, and subject to the limitations set forth in, the New
York Business Corporation Law, the company's Bylaws provide that the company
may, at the discretion of the Board of Directors, indemnify the directors and
officers of the company against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred as a result of any action or proceeding, civil or criminal, including
an action by or in the right of any other corporation of any type or kind,
domestic or foreign, which any director or officer of the company served in any
capacity at the request of the company, by reason of the fact that he was a
director or officer of the company, or served such other corporation in any
capacity. In addition, the company may, at the discretion of the Board of
Directors, pay, in advance of final disposition of any such action or
proceeding, expenses incurred by such person in defending such action or
proceeding. The company has elected and agreed to pay in advance all legal fees
for its officers and directors for any litigation related to the company.
If this indemnification relates to liabilities arising under the
Securities Act, American HealthChoice has been advised that the Commission
believes such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
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THE COMPANY
American HealthChoice is a medical management organization that
acquires, organizes and manages primary care medical clinics and other physician
groups. It currently owns and provides broad-based management and marketing
services to 16 clinics located in Texas, Louisiana and Georgia (4 clinics
combine physical therapy clinics at or close to the same location). The company
has primary care clinics in San Antonio, Texas, McAllen, Texas, New Orleans,
Louisiana, and Atlanta, Georgia. Additionally, the company owns one center that
provides diagnostic services.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by American HealthChoice with the
Commission are hereby incorporated by reference:
(i) The Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1997.
(ii) The Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1997.
(iii) The Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1998.
(iv) The Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1998.
(v) The Current Report on Form 8-K filed November 26, 1997.
(vi) The Current Report on Form 8-K filed July 20, 1998.
(vii) The Current Report on Form 8-K filed September 4, 1998.
In addition, all documents filed by American HealthChoice pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or subsequent to the
date of this Prospectus but prior to the termination of the offering shall be
deemed to be incorporated herein by reference and made a part of this Prospectus
from the respective dates of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded to
the extent that a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
American HealthChoice will provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or oral request of
such person, a copy of any document described above, other than exhibits (unless
such exhibits are specifically incorporated by reference in any such document).
Requests for such copies should be directed to Jay R. Stucki, Secretary,
American HealthChoice, Inc., 1300 West Walnut Hill Lane, Suite 275, Irving,
Texas 75038, (972) 751-1900.
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SELLING STOCKHOLDERS
The following table sets forth the name of and the number of shares of
common stock beneficially owned by each of the selling stockholders before and
after the offering, and the number of shares offered hereby.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
NAME OF SELLING ORIGINAL AMOUNT OWNED BEFORE OWNED AFTER
STOCKHOLDER OF DEBENTURES OWNED OFFERING(1) OFFERING(1)
- --------------- ------------------- ---------------- ----------------
<S> <C> <C> <C>
Dominion Capital Fund, Ltd. $1,985,000 30,538,461 -0-
Sovereign Partners, L.P. 1,000,000 15,384,615 -0-
Canadian Advantage Lt. 200,000 3,076,923 -0-
Partnership
Atlantis Capital Fund, Ltd. 200,000 3,076,923 -0-
</TABLE>
- --------------
(1) The table assumes conversion in full of the debentures on October 6,
1998, which would yield a conversion price of $0.065 per share.
However, no debentures have been converted as of the date of this
Prospectus. The conversion price will vary. Under the terms of the
debenture, the conversion price is equal to 80% of the average of the
closing bid price of the common stock on the Nasdaq SmallCap Market for
the five trading days preceding each conversion date. The number of
shares issuable upon conversion will vary depending on the conversion
price. This Prospectus also covers resale of additional shares of
common stock if the conversion price is less than $0.065 per share and
the number of shares issuable upon conversion exceeds the amounts set
forth above for each selling stockholder.
No selling stockholder may convert debentures that would
result in such selling stockholder or its affiliates owning more than 4.9% of
the outstanding common stock. Consequently, not all of the debentures will be
converted at once, as reflected in the table. American HealthChoice has the
right to force conversion of any unpaid debentures on August 24, 2001.
PLAN OF DISTRIBUTION
The shares may be sold from time to time by the selling stockholders or
by pledgees, donees, transferees or other successors in interest. Such sales may
be made in the over-the-counter market, the Nasdaq Small Cap Market or on any
stock exchange on which the common stock of American HealthChoice may be listed
at the time of sale or otherwise at prices and terms then prevailing or at
prices related to the then current market price, or in negotiated transactions.
The share may be sold by one or more of the following:
(a) 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;
(b) Purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus;
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(c) Ordinary brokerage transactions and transactions in which
the broker solicits purchasers; or
(d) Privately negotiated transactions between the selling
stockholder and a purchaser.
There is no underwriter or coordinating broker acting in connection
with this offering. Each selling stockholder may be deemed an "underwriter"
within the meaning of the Securities Act with respect to the shares of common
stock offered by such selling stockholder. The company and each selling
stockholder have agreed to indemnify one another against certain liabilities,
including liabilities under the Securities Act.
In effecting sales, brokers or dealers engaged by a selling stockholder
may arrange for other brokers or dealers to participate. Brokers and dealers
will receive commissions or discounts from the selling stockholder in amounts to
be negotiated immediately prior to the sale. Such brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act, in connection with such sales. In addition,
any shares of common stock covered by this Prospectus which qualify for sale
pursuant to Rule 144 or Rule 144A promulgated by the Commission under the
Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to
this Prospectus.
Upon the company being notified by a selling stockholder that any
material arrangement has been entered into with a broker or dealer for the sale
of shares through a block trade, special offering or secondary distribution or a
purchase by a broker or dealer, a supplement to this Prospectus will be filed
with the Commission, if required, pursuant to Rule 424 under the Securities Act,
disclosing: (a) the name of the participating broker(s) or dealer(s); (b) the
number of shares involved; (c) the price at which such shares were sold; (d) the
commissions paid or discounts or concessions allowed to such broker(s) or
dealer(s), where applicable; (e) that such broker(s) or dealer(s) did not
conduct any investigation to verify the information set out in this Prospectus;
and (f) other facts material to the transactions.
American HealthChoice will pay all of its expenses in connection with
this offering, and the selling stockholders will be solely responsible for
paying any sales or brokerage commissions or discounts with respect to sales of
the shares offered hereby.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the company presently consists of
115,000,000 shares of common stock, par value of $.001 per share (the "Common
Stock"), and 5,000,000 shares of preferred stock, par value $.001 per share
(the "Authorized Preferred Stock"). The Authorized Preferred Stock may be
designated in series. As of the date of this Prospectus, no series of
Authorized Preferred Stock had been designated and no shares of Authorized
Preferred Stock were outstanding. As of September 30, 1998, there were issued
and outstanding 14,679,901 shares of Common Stock. At the annual meeting of
stockholders scheduled for November 20, 1998, the stockholders will vote on a
proposed 1-for-25 reverse stock split and a subsequent amendment to the
Certificate of Incorporation to approve 100,000,000 shares of authorized Common
Stock and 5,000,000 shares of Authorized Preferred Stock.
COMMON STOCK
GENERAL. The holders of Common Stock have no preemptive, conversion or
redemption rights. The outstanding shares of Common Stock are fully paid and
nonassessable.
DIVIDENDS. The holders of Common Stock are entitled to receive such
dividends as may be declared from time to time by the Board of Directors of
American HealthChoice out of funds legally available therefor. The company has
not paid cash dividends on Common Stock since its inception and the Board of
Directors of the company currently intends to retain earnings for further
development of the company's business and, therefore, does not intend to pay
cash dividends on Common Stock in the foreseeable future.
9
<PAGE> 11
VOTING RIGHTS. The holders of Common Stock are entitled to one vote per
share on all matters submitted to a vote of stockholders and do not possess
cumulative voting rights.
REGISTRAR AND TRANSFER AGENT. The registrar and transfer agent for the
Common Stock is Corporate Stock Transfer, Denver, Colorado.
AUTHORIZED PREFERRED STOCK
The company's Board of Directors has the authority to divide the
Authorized Preferred Stock into series, the shares of each series to have such
relative rights and preferences as shall be fixed and determined by the Board of
Directors. The provisions of a particular series of Authorized Preferred Stock,
as designated by the Board of Directors, may include restrictions on the payment
of dividends on Common Stock. Such provisions may also include restrictions on
the company's ability to purchase shares of Common Stock or to purchase or
redeem shares of a particular series of Authorized Preferred Stock. Depending
upon the voting rights granted to any series of Authorized Preferred Stock,
issuance thereof could result in a reduction in the voting power of the holders
of Common Stock. In the event of any dissolution, liquidation or winding up of
the Company, whether voluntary or involuntary, the holders of each series of the
then outstanding Authorized Preferred Stock may be entitled to receive, prior to
the distribution of any asset or funds to the holders of Common Stock, a
liquidation preference established by the Board of Directors, together with all
accumulated and unpaid dividends. Depending upon the consideration paid for
Authorized Preferred Stock, the liquidation preference of Authorized Preferred
Stock and other matters, the issuance of Authorized Preferred Stock could result
in a reduction in the assets available for distribution to the holders of Common
Stock in the event of the liquidation of the company.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered by
this Prospectus will be passed upon for American HealthChoice by Glast, Phillips
& Murray, a Professional Corporation, Dallas, Texas.
EXPERTS
The financial statements of American HealthChoice, Inc. as of September
30, 1997 and for the year ended September 30, 1997, as included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 1997, have
been incorporated by reference in this Prospectus and the Registration Statement
in reliance on the report of Lane Gorman Trubitt, L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
The consolidated statement of operations of American HealthChoice, Inc.
and the related consolidated statements of stockholders' equity and cash flows
for the year ended September 30, 1996, as included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended September 30, 1997, have been
incorporated by reference in this Prospectus and the Registration Statement in
reliance on the report of Hein +Associates LLP, independent accountants, given
on the authority of that firm as experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration Fee .......................................... $ 3,066
Printing Expenses* ........................................ 1,000
Legal Fees and Expenses* .................................. 7,500
Accounting Fees and Expenses* ............................. 3,500
Blue Sky Fees* ............................................ 500
Nasdaq Listing Fees ....................................... 7,500
Miscellaneous ............................................. 2,000
-------
Total ............................................ $25,066
=======
</TABLE>
- ------------------------
* Estimated
All of the above expenses will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the New York Business Corporation Law, Articles 9
and 10 of the Registrant's Certificate of Incorporation provide as follows:
NINTH: Except as may otherwise be specifically provided in this
certificate of incorporation, no provision of this certificate of incorporation
is intended by the corporation to be construed as limiting, prohibiting,
denying, or abrogating any of the general or specific powers or rights conferred
under the Business Corporation Law upon the corporation, upon its shareholders,
bondholders, and security holders, and upon its directors, officers, and other
corporate personnel, including, in particular, the power of the corporation to
furnish indemnification to directors and officers in the capacities defined and
prescribed by the Business Corporation Law and the defined and prescribed rights
of said persons to indemnification as the same are conferred by the Business
Corporation Law.
TENTH: No director of this corporation shall be personally liable to
the corporation or any of its shareholders for damages for any breach of duty in
such capacity except if a judgment or other final adjudication adverse to him
establishes that his acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of the law, or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled
or that his acts violated Sections 719 of the New York Business Corporation Law.
Article V of the Registrant's Bylaws further provides as follows:
On the terms, to the extent, and subject to the conditions prescribed
by statute any by such rules and regulations not inconsistent with statute, as
the board may in its discretion impose in general or particular cases or classes
of cases: (a) the corporation shall indemnify any person made or threatened to
be made a party to an action or proceeding, civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, which any director or officer of the corporation served in any
capacity at the request of the corporation, by reason of the fact that he, his
testator or intestate, was a director or officer of the corporation, or served
such other corporation in any capacity, against judgments, fines, amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred as a result of such action or proceeding or any appeal
therein, and (b) the corporation may pay, in advance of final disposition of any
such action or proceeding, expenses incurred by such person in defending
II-1
<PAGE> 13
such action or proceeding, expenses incurred by such person in defending such
actions or proceeding. The corporation shall indemnify and make advancements to
any person made or threatened to be made a party to any such action or
proceeding by reason of the fact that he, his testator or intestate, was an
agent or employee (other than a director or officer) of the corporation or
served another corporation at the request for the corporation in any capacity,
on the terms, to the extent and subject to the conditions prescribed by statute,
and by any rules and regulations of the board which would have been applicable
if he had been a director or officer of the corporation.
Each selling stockholder has agreed to indemnify, among others, the
Registrant, the officers and directors and controlling persons of the
Registrant, and the employees of the Registrant who sign the Registration
Statement against certain liabilities incurred in connection with this offering
as the result of claims made under the Securities Act of 1933 (the "Securities
Act"), the Securities Exchange Act of 1934 (the "Exchange Act") or state law.
ITEM 16. EXHIBITS.
Exhibit
Number Description of Exhibits
- ------- -----------------------
4.1 Form of Debenture for $3,385,000 of 8% convertible debentures due
August 24, 2001 (filed as Exhibit (c)(ii) to the Registrant's
Current Report on Form 8-K dated August 24, 1998, and incorporated
herein by reference).
4.2 Form of Subscription Agreement between Registrant and
the holders of the debentures referenced in Exhibit 4.1 (filed as
Exhibit (c)(i) to the Registrant's Current Report on Form 8-K dated
August 24, 1998, and incorporated herein by reference).
4.3 Form of Security Agreement entered into between the Registrant and
the holders of the debentures referenced in Exhibit 4.1 (filed as
Exhibit (c)(iii) to the Registrant's Current Report on Form 8-K
dated August 24, 1998, and incorporated herein by reference).
4.4 Form of Registration Rights Agreement between the Registrant and
the holders of the debentures referenced in Exhibit 4.1 (filed as
Exhibit (c)(iv) to the Registrant's Current Report on Form 8-K
dated August 24, 1998, and incorporated herein by reference).
5.1 Opinion of Glast, Phillips & Murray, a Professional Corporation,
concerning legality.*
23.1 Consent of Glast, Phillips & Murray, a Professional Corporation
(contained in Exhibit 5.1).
23.2 Consent of Lane Gorman Trubitt, L.L.P. regarding the Registrant.*
23.3 Consent of Hein + Associates LLP regarding the Registrant.*
24.1 Power of attorney from directors and officers (see signature pages
to this Registration Statement).
- -----------------------------
* Filed herewith.
II-2
<PAGE> 14
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made of the securities registered hereby, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events which, individually or together, represent
a fundamental change in the information set forth in
this Registration Statement; and
(iii) To include any additional or changed
material information on the plan of distribution;
provided, however, that the undertakings set
forth in paragraphs (1)(i) and (1)(ii) above 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 the Registrant
pursuant to the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) Insofar as indemnification for liabilities arising under
the Securities Act 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 Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dallas, State of Texas, on October 6, 1998.
AMERICAN HEALTHCHOICE, INC.
By: /s/ Joseph W. Stucki, D.C.
----------------------------------------
Joseph W. Stucki, D.C., President,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature to the
Registration Statement appears below hereby appoints Joseph W. Stucki, D.C. and
Jay R. Stucki, or either one of them, as such person's attorney-in-fact with
full power to act alone, with full power of substitution or resubstitution, for
such person and in such person's name, place and stead, in any and all
capacities to sign on such person's behalf, individually and in the capacities
stated below, and to file any and all amendments and post-effective amendments
to this Registration Statement, which amendment or amendments may make such
changes and additions as such attorney-in-fact may deem necessary or
appropriate.
<TABLE>
<CAPTION>
Name Office Date
---- ------ ----
<S> <C> <C>
/s/ Joseph W. Stucki, D.C. President, Chief Executive October 6, 1998
- ----------------------------- Officer and Director
Joseph W. Stucki, D.C. (Principal Executive
Officer)
/s/ Jay R. Stucki Principal Financial October 6, 1998
- ----------------------------- Officer
Jay R. Stucki
/s/ Elena M. Knight Controller October 6, 1998
- -----------------------------
Elena M. Knight
/s/ Jeffrey Jones, D.C. Director October 6, 1998
- -----------------------------
Jeffrey Jones, D.C.
/s/ Michael R. Smith, M.D. Director October 6, 1998
- -----------------------------
Michael R. Smith, M.D.
/s/ John V. Mansfield Director October 6, 1998
- -----------------------------
John V. Mansfield
/s/ James Roberts Director October 6, 1998
- -----------------------------
James Roberts
</TABLE>
II-4
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
- ------- -----------------------
<S> <C>
4.1 Form of Debenture for $3,385,000 of 8% convertible debentures
due August 24, 2001 (filed as Exhibit (c)(ii) to the Registrant's
Current Report on Form 8-K dated August 24, 1998, and
incorporated herein by reference).
4.2 Form of Subscription Agreement between Registrant and the holders
of the debentures referenced in Exhibit 4.1 (filed as Exhibit (c)(i)
to the Registrant's Current Report on Form 8-K dated August 24, 1998,
and incorporated herein by reference).
4.3 Form of Security Agreement entered into between the
Registrant and the holders of the debentures referenced in
Exhibit 4.1 (filed as Exhibit (c)(iii) to the Registrant's Current
Report on Form 8-K dated August 24, 1998, and incorporated
herein by reference).
4.4 Form of Registration Rights Agreement between the Registrant
and the holders of the debentures referenced in Exhibit 4.1
(filed as Exhibit (c)(iv) to the Registrant's Current Report
on Form 8-K dated August 24, 1998, and incorporated herein
by reference).
5.1 Opinion of Glast, Phillips & Murray, a Professional Corporation,
concerning legality.*
23.1 Consent of Glast, Phillips & Murray, a Professional Corporation
(contained in Exhibit 5.1).
23.2 Consent of Lane Gorman Trubitt, L.L.P. regarding the Registrant.*
23.3 Consent of Hein + Associates LLP regarding the Registrant.*
24.1 Power of attorney from directors and officers (see signature
pages to this Registration Statement).
</TABLE>
- -----------------------------
* Filed herewith.
II-5
<PAGE> 1
EXHIBIT 5.1
[GLAST, PHILLIPS & MURRAY LETTERHEAD]
October 6, 1998
American HealthChoice, Inc.
1300 West Walnut Hill Lane
Suite 275
Irving, Texas 75038
Re: Form S-3 Registration Statement relating to the registration
of 95,000,000 shares of common stock, $.001 par value of
American HealthChoice, Inc.
Gentlemen:
We are acting as counsel for American HealthChoice, Inc., a New York
corporation (the "Company"), in connection with the filing under the Securities
Act of 1933, as amended, of a Registration Statement for the Company on Form S-3
filed with the Securities and Exchange Commission ("SEC") (the "Registration
Statement"), covering an aggregate of 95,000,000 shares (the "Shares") of common
stock, par value $.001 per share (the "Common Stock").
In that connection, we have examined the Form S-3 Registration
Statement in the form to be filed with the SEC. We have also examined and are
familiar with the originals or authenticated copies of all corporate or other
documents, records and instruments that we have deemed necessary or appropriate
to enable us to render the opinion expressed below.
We have assumed that all signatures on all documents presented to us
are genuine, that all documents submitted to us as originals are accurate and
complete, that all documents submitted to us as copies are true and correct
copies of the originals thereof, that all information submitted to us was
accurate and complete and that all persons executing and delivering originals or
copies of documents examined by us were competent to execute and deliver such
documents. In addition, we have assumed that the Shares will not be issued for
consideration less than the par value thereof and that the form of consideration
to be received by the Company for the Shares will be lawful consideration under
the New York Business Corporation Law.
Based on the foregoing and having due regard for the legal
considerations we deem relevant, we are of the opinion that the Shares, or any
portion thereof, when issued as described in the Registration Statement, will be
validly issued by the Company, fully paid and nonassessable.
<PAGE> 2
American HealthChoice, Inc.
October 6, 1998
Page 2
This opinion is limited in all respects to the laws of the United
States of America and the New York Business Corporation Law.
We hereby consent to the fling of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Glast, Phillips & Murray, P.C.
GLAST, PHILLIPS & MURRAY, P.C.
MDP/jsk
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference of our report dated December
24, 1997, covering the consolidated balance sheet of American HealthChoice, Inc.
as of September 30, 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year ended September 30, 1997 into
the Form S-3 registration statement filed with the Securities and Exchange
Commission on October 8, 1998.
/s/ Lane Gorman Trubitt, L.L.P.
- -------------------------------
Lane Gorman Trubitt, L.L.P.
Dallas, Texas
October 6, 1998
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
American HealthChoice, Inc.
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3, and the accompanying Prospectus, of our report dated
January 17, 1997 for the year ended September 30, 1996 and to the reference to
our Firm under the heading "Experts" in the Prospectus filed herewith.
/s/ Hein + Associates LLP
- -------------------------
HEIN + ASSOCIATES LLP
Houston, Texas
October 7, 1998
