As filed with the Securities and Exchange Commission on June 25, 1996.
File No.
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MEDMARCO, INC.
(Exact name of registrant as specified in its charter)
Utah 48-1092064
(State or other jurisdiction (IRS Employer Identification
of incorporation) Number)
215 South State Street, Salt Lake City, Utah 84111 (801) 532-7525
- ------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area
code of registrant's principal executive offices)
---------------------------------------
William V. Trowbridge, Chief Financial Officer
215 South State Street, Suite 535
Salt Lake City, Utah 84111
(801) 538-2424
- ------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------------
Copies of all communications to:
Kevin R. Pinegar
Durham, Evans, Jones & Pinegar, P.C.
50 South Main Street, Suite 850
Salt Lake City, Utah 84144
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Approximate date of commencement of proposed sale to the public: As soon
as possible after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Amount to be Proposed Proposed Amount
Class of Registered Maximum Maximum of
Securities to be Offering Price Aggregate Registration
Registered Per Share* Price* Fee
- ------------------ --------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C>
Common Stock 303,000 Shares $ 1.65 $ 499,950 -
$.001 Par Value
Common Stock 500,000 Shares 1.75 875,000 -
$.001 Par Value
- ------------------ --------------- ----------------- ------------- --------------
Total 803,000 Shares - $1,374,950 $ 474.12
</TABLE>
* Estimated solely for purposes of calculating the registration fee under
Rule 457(h)(1).
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a) may determine.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION
MEDMARCO, INC.
(a Utah corporation)
803,000 Shares of Common Stock
$.001 Par Value
-------------------------------
The shares (the "Shares") include shares held by the selling
shareholders or are otherwise issuable by Medmarco, Inc. (the "Company" or
"Medmarco") to the selling shareholders upon exercise of certain warrants
issued by the Company (the "Warrants") and held by the Selling
Shareholders. The Shares have been registered for resale to the public,
in the case of the Shares issuable upon exercise of the Warrants,
following their issuance to the Selling Shareholders, by the holders of
the Shares (the "Selling Shareholders"). See "SELLING SECURITY HOLDERS."
The form of the option and warrant agreements pursuant to which the Shares
are to be issued and certain other documents are incorporated in and made
a part of this Prospectus by reference. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
The estimated expenses of the registration of the Shares, including
accounting and legal fees, total approximately $22,000 and will be paid by
the Company. No commissions or fees will be paid by the Company in
connection with the issue of Shares to the Selling Shareholders upon
exercise of their Warrants. Selling Shareholders will pay all commissions
on resale of the Shares and will bear their individual selling expenses.
See "PLAN OF DISTRIBUTION." The common stock of the Company is included
in the National Association of Securities Dealers Automated Quotation
system ("Nasdaq") "SmallCap Stock Market" under the symbol MDMC. The
Shares will be offered for resale by the Selling Shareholders at prices
approximating the market price as reported by Nasdaq at the time of sale.
See "SELLING SECURITY HOLDERS."
<TABLE>
<CAPTION>
Proceeds to Company (3)
Discounts and
Price to Public (1) Underwriting (2) Commissions
---------------------- ------------------ ------------------------
<S> <C> <C> <C>
Per Share $ 1.00 $ .00 $ .00
Total $ 803,000.00 $ .00 $ .00
</TABLE>
(1) The price at which the Selling Shareholders sell the
Shares will vary based on the market for such Shares. For
purposes of this table, the average of the high and low market
price of the Company's common stock on June 12, 1996 has been
used.
(2) Commissions or other costs of sale will be the sole
responsibility of the Selling Shareholders and may vary.
(3) None of the proceeds from the sale of the Shares by the
Selling Shareholders will be received by or are payable to the
Company. All proceeds, net of commissions and other expenses
payable by the Selling Shareholders in connection with such sale
will be received by the Selling Shareholders. The Company will
receive payment for those Shares issued to the Selling Shareholders
upon exercise of their warrants.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 25, 1996.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
HEREIN. ANY INFORMATION OR REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN
OR MADE, MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION WITH RESPECT
TO THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS SHALL
NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and has registered
its securities pursuant to Section 12(g) of that Act (Commission File No.
1-11534). In accordance therewith, the Company files reports, proxy and
information statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements
and other information concerning the Company can be inspected and copied
at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and the Commission's Regional
Offices in New York (Jacob Javits Building, 26 Federal Plaza, New York,
New York 10278), Los Angeles (5757 Wilshire Boulevard, Suite 500 East, Los
Angeles, California 90036-3648), and Chicago (219 South Dearborn Street,
Room 1204, Chicago, Illinois 60604). Copies of such material can be
obtained by written request to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549, at prescribed rates.
INCORPORATION BY REFERENCE
This prospectus incorporates documents by reference which are not
presented herein or delivered herewith. These documents (not including
exhibits thereto unless such exhibits are specifically incorporated by
reference into such information incorporated into this Prospectus) are
available without charge to each person, including any beneficial owner,
to whom a Prospectus is delivered, upon written or oral request of such
person directed to William V. Trowbridge, Chief Financial Officer,
Medmarco, Inc., 215 South State Street, Suite 535, Salt Lake City, Utah
84111, telephone (801) 532-7525. See "Incorporation of Certain Documents
by Reference."
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and the financial statements appearing elsewhere in
the Prospectus and/or incorporated herein by reference.
See "RISK FACTORS" for reasons an investment in the shares offered
hereby involves significant risks.
The Company
Medmarco, Inc. (hereinafter the "Company") was incorporated under
the laws of the State of Georgia on May 1, 1990 under the name "M.M.
Associates, Inc." The name of the Company was changed in February 1992 to
Medmarco, Inc. The Company was re-domesticated as a Utah corporation in
September 1995. The Company has four wholly-owned subsidiaries (the
"Subsidiaries"): Medmart of Nevada, Inc., a Nevada corporation
("Medmart"), Oxycare, Inc., an Arizona corporation ("Oxycare"), Dignicare,
Inc., a Nevada corporation ("Dignicare"), and Health Industries, Inc., an
Arizona corporation ("HII"). The Company also owns a 50% interest in
Total HME of Southern Nevada LLC, a Utah limited liability company. The
Subsidiaries are engaged in providing home medical, respiratory and
infusion therapy and treatments, operating retail and closed door
pharmacies, and renting and selling durable medical equipment ("DME") and
medical supplies to patients in Arizona, Nevada and Utah. The
Subsidiaries market their products and services to patients for treatment
in private homes, extended care facilities and subacute hospitals. The
Subsidiaries also sell pharmaceutical and medical supplies, and provide
EKG services, pharmacy consultation and home nursing visits. Their
referral base includes unaffiliated primary care practitioners, as well as
hospitals, long-term care companies, third-party payers, managed care
groups and utilization review specialists. The Subsidiaries use a sterile
mixing room for compounding solutions for infusion therapy used in homes,
extended care facilities, and other treatment settings.
The principal executive offices of the Company are located at 215
South State Street, Suite 535, Salt Lake City, Utah 84111, and its
telephone number is (801) 532-7525. See "THE COMPANY."
Authorized Capital Stock
The Company is authorized to issue 50,000,000 Shares, divided into
30,000,000 shares of common stock and 20,000,000 shares of preferred
stock. As of June 12, 1996, the Company had 3,903,909 shares of common
stock issued and outstanding. Assuming the exercise of all of the
warrants pursuant to which the Shares covered by the registration
statement of which this Prospectus forms a part, the Company would have
4,431,909 shares of common stock issued and outstanding. There are no
shares of preferred stock issued or outstanding. See "RISK FACTORS."
RISK FACTORS
The Company and its business are subject to a number of significant
risks, among which are the following:
Reimbursement and Cost Containment Policies. A substantial portion
of the revenues of the Company are derived from reimbursement by third-
party payers, including Medicare and Medicaid, private insurance and self-
funded employer groups. These payers have implemented, from time to time,
and may be expected in the future to implement cost containment measures
in an effort to reduce the expense of health care for their insureds.
Such measures include establishment of rate schedules and limitations on
amounts reimbursed by the insurers and restrictions on the types of
therapies, medications and illnesses covered by their insurance or benefit
plans. Such policies may adversely affect the business of the Company by
reducing or limiting the amounts it may charge for its services and
products. The home health care industry generally provides patient
treatments and therapies at lower costs to third-party payers than
comparable hospital care providers. As a result, home health care
providers and suppliers such as the Company have benefited from cost
containment policies which are intended to encourage the use of home
health treatment and care. While the Company believes that the trend in
health care reform is toward increasing home health care and managed care
programs, the need to reduce health care expense in general may lead to
additional limitations on reimbursement levels and cost containment
policies affecting the home health care industry. Such limitations,
changes in reimbursement levels and other cost containment measures could
have a material adverse effect on the Company's business and
profitability.
Regulation and Reimbursement. The federal government and most
states regulate various aspects of the home medical care, pharmacy, DME
and health care industry. In particular, the business of the Company is
subject to laws governing pharmacies and standards relating to the
provision of services to and obtaining reimbursement of services and
equipment expenses for, Medicare and Medicaid patients. In addition, the
failure to obtain or renew any required regulatory approvals, licenses or
certificates may have a material adverse effect on the continued expansion
of the Company and its profitability. It is possible that changes in the
law or new interpretations of existing laws may have an adverse effect on
permissible activities, the cost of doing business, and the amount of
reimbursement by government and private third party payers. Changes in
federal and state laws regulating coverage and permissible reimbursement
rates are frequently considered. The Company cannot predict whether new
or proposed legislation will be enacted and there can be no assurance that
federal or state governments will not in the future impose additional
restrictions on part or all of the Company's business or its intended
business which might adversely affect such business.
Product Liability and Malpractice Liability; Insurance. Providers
in the health care industry, including those operating in the same
segments as the Company, are from time to time subject to lawsuits
alleging malpractice, product liability or related legal theories, which
have become an increasingly frequent risk of doing business for
physicians, hospitals, and other medical care providers. The
manufacturers and distributors of products such as DME owned or leased by
the Company would be partly, if not fully, responsible for any claims
alleging defects in their products. Although no such claims have been
brought in the past or are currently pending against the Company, there
can be no assurance that such claims may not be raised in the future. The
Company attributes the absence of such claims to its on-going quality
control, continuing education and employee training policies and practices
intended to reduce the risk of such claims. Although the Company
currently maintains liability insurance intended to cover such claims, the
coverage provided by such policies in a particular case is subject to
acceptance of the claim relating to such occurrence by the insurance
carrier. There can be no assurance that a particular claim, if asserted,
would be covered by the existing policies of insurance, neither can there
be any assurance that the coverage limits of the policies now maintained
by the Company will be adequate, that the Company will, in the future, be
able to continue to maintain or obtain such insurance or that such
insurance will be available to the Company in the future at costs which
are acceptable to the Company or within its ability to afford such
coverage. A successful claim against the Company in excess of any policy
limits could have a material adverse effect upon the business of the
Company and upon its financial condition. The assertion of such claims,
regardless of their merit or eventual outcome also may have a material
adverse effect on the Company and its business reputation and performance.
Risks of Retail Business Generally. The Company is engaged in the
retail sale of pharmaceuticals and the sale and leasing of equipment and
related services. The Company's business is subject to the general risks
inherent in the development, ownership, and operation of retail, rental
and service operators. Such risks include, without limitation,
uncertainty of revenues and cash flow to meet fixed obligations, changes
in national and local economic conditions, changes in neighborhood
characteristics and demographics, possible unavailability of bank
financing, refinancing and floor planning finance for funding business
operations and expansion, increases in property tax rates and other
operating expenses, changes in applicable laws regulating the business or
the use of the Company's products (including, but not limited to, changes
in reimbursement policies and practices for Medicare, Medicaid, and
private insurance companies), uninsured losses and other factors which may
be outside the control of the Company, and the risk of being unable to
hire or retain experienced and effective sales and other employees.
Competition. The segments of the health care industry in which the
Company operates, including respiratory therapy, infusion therapy and DME,
are highly competitive and the market is divided among a large number of
providers. Many of the Company's competitors have or may obtain
significantly greater financial and marketing strength and resources than
the Company. There can be no assurance that the Company will not
encounter increased competition in the future, which could have a material
adverse effect on the ability of the Company to successfully market its
products and services.
Dividend Policy. The Company has never declared or paid any cash
dividends on its Shares and does not anticipate paying cash dividends in
the foreseeable future. The payment of dividends to holders of Common
Stock may be subject to preferences granted in the future by the Board of
Directors to holders of the Company's Preferred Stock.
Potential Depressive Effect of Sales of Shares by Present
Stockholders. As of the date hereof, approximately 2,000,000 Shares of
the Company's Shares currently outstanding are "restricted securities" as
that term is defined by Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), and may be sold to the public in
accordance with the provisions of such Rule. The possibility of such
sales may have a depressive effect on the market price.
Possible De-listing of Common Stock. The Company's Common Stock is
quoted on the NASDAQ Small Cap Stock Market. To maintain its "listing" on
this market, the Company must meet certain qualifications, including,
among others, a minimum stock price of $1.00 per share. In recent months
since January 1996, the price per share as quoted on the NASDAQ Small Cap
Stock Market has on occasion dropped below $1.00. If the minimum price is
not maintained, the Company's shares could be de-listed and de-listing
could have a materially adverse effect on the market for and price of the
Company's securities.
Underwriter's Warrants. Upon successful completion of its initial
public offering, the Company granted to its Underwriter warrants to
purchase 167,000 units offered in such offering (the "Underwriter's
Warrants"). The Underwriter's Warrants are exercisable for a four-year
period ending December 7, 1998 at a price equal to $6.75 per unit, each
unit consisting of one share of common stock and two warrants to purchase
one share of common stock each. To the extent the Underwriter's Warrants
are exercised, they may have a dilutive effect on the stockholders'
interests. The exercise of the Underwriter's Warrants is likely to occur
at a time when the Company could receive funds from the sale of its Shares
to the public at higher prices.
Risks Inherent in Company's Growth Strategy. The Company may
continue to grow and diversify through expanding current operations or by
acquiring existing operations. This growth strategy entails the risks
inherent in assessing the value, strengths and weaknesses of acquisition
candidates, in integrating and managing the operations of acquired
companies and in identifying suitable locations for additional branch
facilities. The Company's growth may place significant demands on the
Company's financial and management resources. There can be no assurance
that the Company will be able to implement its growth strategy or that
such strategy will ultimately prove successful.
Risk of Substantial Dilution by Future Issuance of Shares in
Acquisitions. The Company intends to use its common stock to finance the
acquisition of other companies in the health care industry. In such
transactions, a substantial part of the purchase price may be paid using
such securities. The issuance by the Company of its equity securities,
including common stock or securities convertible into common stock, in
such large amounts will result in immediate and substantial dilution to
the existing stockholders of the Company.
Recent Net Losses. The Company realized significant net losses in
fiscal 1995 and 1994. Although the Company has experienced limited revenue
growth in recent years, due primarily to its acquisitions, it has incurred
substantial operating expenses due to the financial condition of those
acquired companies and the expenses associated with acquiring them. In
addition, at December 31, 1995, the Company was not in compliance with
certain covenants in a working capital credit agreement, and the lender
had not waived its rights to seek remedies under the provisions of the
agreement. The Company's continued existence is dependent upon its ability
to achieve its 1996 operating plan, which includes cost reductions and
discontinuance or disposition of unprofitable business lines. Based on these
conditions, the Company's auditors stated that they raise substantial
doubt about the Company's ability to continue as a going concern. During
late 1995 and early 1996, the Company undertook steps to lower operating
losses by refocusing existing subsidiaries on profitable activities,
disposing of or selling unprofitable operating units, eliminating
unnecessary and duplicative administrative costs and identifying profitable
acquisition targets. There can be no assurance that growth will continue
or that net losses will not be incurred in future operating periods.
Limited Market for the Common Stock. The Company's common stock has
been traded on the Nasdaq SmallCap Stock Market since January 1994.
Because relatively few shares of common stock are held by persons
unaffiliated with the Company, market quotations for the Company's shares
and the price per share paid by investors should not be considered to
reflect the quotations that might exist if more shares were owned by
persons not affiliated with the Company. The market for the Company's
common stock has been limited.
Volatility of Stock Prices. The stock market has from time to time
experienced significant price and volume fluctuations that may be
unrelated to the operating performance of particular companies. In
addition, the market price of the Company's common stock, like the stock
prices of many publicly traded home health care companies, has been and
may continue to be highly volatile. Announcements of innovations or new
products or services by the Company or its competitors, developments or
disputes concerning proprietary rights, publicity regarding actual or
potential medical results relating to products under development by the
Company or its competitors, regulatory developments in both the U.S. and
foreign countries and economic and other external factors, as well as
period-to-period fluctuations in financial results, may have a significant
impact on the market price of the common stock.
Anti-Takeover Protection. The Utah Control Shares Act (the "Control
Shares Act") provides that any person or entity that acquires 20% or more
of the outstanding voting shares of a publicly-held Utah corporation is
denied voting rights with respect to the acquired shares, unless a
majority of the disinterested shareholders of the corporation elects to
restore such voting rights. The provisions of the Control Shares Act may
discourage companies or persons interested in acquiring a significant
interest in or control of the Company, regardless of whether such
acquisition may be in the interest of the Company's shareholders.
USE OF PROCEEDS
The Shares are held by or will be issued to the Selling Shareholders
upon exercise of Warrants held by them. They may then be re-sold
hereunder by the Selling Shareholders at prices approximating the market
price of such securities on the date of re-sale. All net proceeds (after
payment by the Selling Shareholders of the costs, including commissions,
payable in connection with the sale of the Shares) from the sale of the
Shares will be paid to the Selling Shareholders and no proceeds will be
paid to the Company. Any funds received by the Company upon exercise of
warrants held by Selling Shareholders will be used for working capital.
SELLING SECURITY HOLDERS
The Shares offered pursuant to this Prospectus are held by or
issuable to the Selling Shareholders identified below and will be held for
resale by the Selling Shareholders. A total of 803,000 Shares have been
registered and may be offered by the Selling Shareholders on a delayed or
continuous basis. 500,000 of such Shares were issued or, upon exercise of
certain Warrants, will be issued to the Selling Shareholders, in
connection with the acquisition of Oxycare, Inc., an Arizona corporation
("Oxycare") by the Company in December 1995. 303,000 of such Shares are
issuable upon exercise of certain Warrants (the "Bridge Warrants")
acquired by accredited investors prior to the Company's initial public
offering. The following table sets forth the number of Shares held for
resale hereunder by the Selling Shareholders, assuming exercise of all the
Warrants held by these Selling Shareholders:
"Oxycare" Warrants
Name Shares Held for Resale
Robert S. Abbate 237,500
10450 E. Terra
Scottsdale, Arizona 85258
Lawrence N. Pellerito 237,500
3101 W. Thomas #107
Phoenix, Arizona 85009
Alan N. Gagleard 25,000
One McCormick Place
9735 North 90th Place
Suite 140
Scottsdale, Arizona 85258
Messrs. Abbate and Pellerito were formerly the sole shareholders,
officers and directors of Oxycare, Inc., an Arizona corporation
("Oxycare") acquired by the Company in December 1995. Prior to the
acquisition of Oxycare by the Company, neither Mr. Abbate nor Mr.
Pellerito had any affiliation with the Company. Both gentlemen agreed to
provide consulting services to the Company over a six month period. Mr.
Gagleard is the attorney for Messrs. Abbate and Pellerito and received
Warrants to purchase 25,000 shares as part of the transaction in which
Oxycare was acquired by the Company. Mr. Gagleard has not had any prior
relationship with the Company.
Bridge Warrants
From March through October 1993, the Company issued the Bridge
Warrants in connection with debt financing used to pay certain expenses
including expenses associated with the initial public offering. Each Bridge
Warrant entitles the holder to purchase Shares of the Company's common stock
at a price of $1.65 per Share. An aggregate of 303,000 Shares are issued
under the Bridge Warrants and may be sold by the Selling Shareholders under
this prospectus. The Selling Shareholders holding Bridge Warrants are:
Shares Subject
to Warrants
New Era Funding Corp. 15,000
Attn: Stephan S. Buckley
Suite 1300, 150 N. Martindale Dr.
Schaumberg, IL 60173
Lyle P. Reigel 7,500
2515 W. Prospect Ave.
Appleton, WI 54915
Robert M. and Lillian O'Dell 15,000
5505 Amethyst St.
Alto Loma, CA 91737
Brent Hurt 15,000
211 East Ohio #2112
Chicago, IL 60611
Noel C. Lindenmuth 15,000
300 Boardwalk Pl.
Park Ridge, IL 60068
Fred Stummer 15,000
6244 North Kirkwood
Chicago, IL 60173
Ruby Knipker 7,500
Route 2, Box 665
Excelsior Spring, MO
J.R. Fitzgerald 3,750
3504 Van Winkle
Amarillo, TX 79121
John D. O'Brien 7,500
4706 NW 83rd Terrace
Kansas City, MO 64151
Dennis Greenway 7,500
5104 NW 81st Terrace 7,500
Kansas City, MO 64151
Scott Brunner 11,250
150 N. Wacker Dr.
Suite 1700
Chicago, IL 60606
Stephen Buchley 7,500
Clark Consulting Corp.
110 No. Hewes
Barrington, IL 60010
Karl Berger 3,750
P.O. Box 627
Joliet, IL 60434
Marvin and Mindy Simon 3,750
State Road #55
R.R. #1 Box 30B
Fair Oaks, IN 47943
Richard Garland 3,750
5N 230 Oak Road
St. Charles, IL 80175
David Mathis 15,000
340 Persimmon Dr.
St. Charles, IL 60174
Michael Minton 10,500
1020 N. Blackburn
Inverness, IL 60067
Kelly McCarthy 3,750
H.C.R. 77 Box 349
Sunrise Beach, MO 65079
Richard James 3,750
5237 London Ave.
Alta Loma, CA 91737
Marvyn Lubek 15,000
41 Nevada Ave.
North York, Ontario MZM3N
Canada
Donald J. Drum 15,000
101 E. Genesee St.
Skaneateles, NY 13152
Dennis Rood 3,750
22810 Capehart Rd.
Gretna, Nebraska 68028
Thomas Pierson 3,750
1618 Pennsylvania St.
Denver, CO 80203
Diane Grasmick 7,500
1414 E. Pershing
Riverton, WY 82501
M.B.M. Young 7,500
1693 E. Cedar Ave.
Denver, CO 80209
Christopher C. Dee 3,750
575 Meadowwood Dr.
Lake Forest, IL 60045
Steven Harrington 1,875
1130 N. Dearborn, Apt. 1802
Chicago, IL 60610
James Herman 1,875
1332 Dartmouth Rd.
Flassmoor, IL 60422
Darren Perman 22,500
34503 Golden Lantern
Dana Point, CA 92679
Jerry Perman 15,000
28870 Grayfox St.
Malibu, CA 90265
D. Scott Bryan 3,750
2967 W. Centennial Dr. M303
Littleton, CO 80123
Vinnie D. Abate 3,750
4 Roseview
Woodbridge, CT 06525
Frank Morelli, III 3,750
412 Loma Drive
Florence, CO 81226
Scott Garland 3,750
5N 230 Oak Road
St. Charles, IL 60175
Charles Segal 3,750
1835 S. Sherman
Denver, CO 80210
Charles Brunner 7,500
7 Shenandoah Lane
Hawthorne Woods, IL 60047
PLAN OF DISTRIBUTION
500,000 of the Shares offered hereunder were delivered to certain of
the Selling Shareholders in connection with the purchase and sale of their
shares of the common stock of Oxycare. The remaining 303,000 Shares are
issuable to the Bridge Warrant holders, as described above. No broker or
dealer participated in the transfer of the shares in these exchanges.
Upon issuance of all of the Shares to the Selling Shareholders and once
the registration statement of which this Prospectus forms a part has been
declared effective by the Securities and Exchange Commission and
thereafter so long as the registration statement shall continue effective,
the Selling Shareholders may offer and sell the Shares at such times and
in such amounts as they may respectively determine in their sole
discretion. Sales of Shares by the Selling Shareholders will result in a
corresponding decrease in their respective percentage ownership of the
Company's securities. Offers and sales may be made into United States
markets through broker-dealers or otherwise as permitted by law. Offers
and sales may also be made into markets outside the United States.
Generally speaking, investors acquiring shares pursuant to this
registration acquire such shares without restriction on resale.
MATERIAL CHANGES IN THE COMPANY'S AFFAIRS
Since the end of the Company's last fiscal year (December 31, 1995),
there have been no material changes in the business and affairs of the
Company for which financial statements were included in the latest annual
report to security holders and which have not previously been included in
a report on Form 10-QSB or Form 8-K filed under the Exchange Act.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, all of which were previously filed with the
Securities and Exchange Commission, are hereby incorporated by reference
in this Prospectus:
1. The Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995 (Commission File No. 1-11534);
2. The Company's Quarterly Report on Form 10-QSB for the
period ended March 31, 1996;
3. Current Report on Form 8-K dated December 19, 1995, as
supplemented and amended;
4. The description of the Company's common stock as
contained in the Registration Statement filed under Section 12(b) of
the Securities Exchange Act on Form 8-A (Registration No. 1-11952).
5. Proxy Statement for Special Meeting of Shareholders,
September 8, 1995.
All documents filed by the Company subsequent to the date of this
Prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 so long as the registration statement of
which this Prospectus is a part shall remain effective shall be deemed
incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of those documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that such
statement is modified or replaced by a statement contained in this
Prospectus or in any other subsequently filed document that also is or is
deemed to be incorporated by reference into this Prospectus. Any such
statement so modified or superseded shall not be deemed, except as so
modified or replaced, to constitute a part of this Prospectus.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Part 9 of the Utah Revised Business Corporation Act (Utah Code Ann.
Section 16-10a-901, et seq.) authorizes the Company to indemnify its
directors and officers under specified circumstances. The bylaws of the
Company provide that the Company shall indemnify, to the extent permitted
by Utah law, its directors and officers against liabilities (including
expenses, judgments and settlements) incurred by them in connection with
any actual or threatened action, suit or proceeding to which they are or
may become parties and which arises out of their activities as directors
or officers.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed 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.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection
with the issuance and distribution of the shares of Common Stock of the
Registrant being offered hereby. All expenses are estimated.
Registration and filing fee* $ 500.00
Accounting fees and expenses* 4,000.00
Legal fees and expenses* 15,000.00
Nasdaq listing fee* 2,500.00
----------
Total* $22,000.00
* These expenses are estimated only. Does not include expenses relating
to the sales of the securities when and as they may occur, which expenses
are the sole responsibility of the Selling Shareholders and may include,
but are not limited to transfer agent fees, printing and engraving fees,
postage, commissions, taxes, etc.
Item 15. Indemnification of Directors and Officers.
Section 16-10a-901 of the Utah Revised Business Corporation Act and
the Registrant's Bylaws under certain circumstances provide for the
limitation of liability and indemnification of the Registrant's directors
against liabilities which they may incur in the course of acting in such
capacity.
In general, under these provisions, any officer or director may be
indemnified against expenses, fines, settlements or judgments arising in
connection with a legal proceeding to which such person is a party, as a
result of such relationship, except in relation to matters in which such
person is adjudged to be liable for his own negligence or intentional
misconduct in the performance of his duty.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered into in the future or pursuant to a vote
of shareholders or directors. This indemnification is in addition to any
other right of the indemnified person under any such contract or any law,
bylaw, agreement, vote of shareholders or otherwise.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (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.
Item 16. Exhibits
Exhibits not filed with this Amendment were previously filed or will
be filed by future amendment.
Number Description
4.1 Form of Oxycare Warrant
4.2 Form of Bridge Warrant
5 Opinion re: legality
23.1 Consent of Independent Public Accountants
(Arthur Andersen & Co.)
23.2 Consent of Independent Public Accountants
(Bradshaw, Smith & Co.)
23.3 Consent of counsel (included in Exhibit 5)
24 Powers of Attorney (included on Signature Page)
Item 17. Undertakings.
The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which offers or sales are
being made hereunder, a post-effective amendment to include any
additional or changed material information on the plan of
distribution.
(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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Salt Lake City, Utah on June 25, 1996.
MEDMARCO, INC.
By: /s/ THOMAS O. BUSHELL
------------------------------------
Thomas O. Bushell, President and CEO
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas O. Bushell and William V.
Trowbridge and each of them his true and lawful attorney-in-fact and
agent, with full power of substitution and re-substitution for him and in
his name, place and stead in any and all capacities to sign any and all
amendments (including post-effective amendments) to this Registration
Statement and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange
Commission granting unto said attorneys-in-fact and agents and each of
them full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them or their or his substitute or substitutes may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement Amendment has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ THOMAS O. BUSHELL
- ---------------------------
Thomas O. Bushell President/CEO and Director 6/25/96
/s/ JAMES C. McNEESE
- ---------------------------
James C. McNeese Chairman of the Board 6/25/96
/s/ WILLIAM V. TROWBRIDGE
- ---------------------------
William V. Trowbridge Chief Financial Officer 6/25/96
/s/ CHARLES W. McLAUGHLIN
- ---------------------------
Charles W. McLaughlin Director 6/25/96
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT, THESE SECURITIES MAY
NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF,
EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT AND UPON OBTAINING AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY),
SATISFACTORY TO THE COMPANY, THAT SUCH DISPOSITION MAY BE MADE
WITHOUT REGISTRATION OF THE SECURITIES UNDER SUCH ACT, OR
UNLESS SOLD PURSUANT TO RULE 144.
WC-. . .
MEDMARCO, INC.
THIS CERTIFIES THAT, . . . . . . . . . . . . (the "Holder") is
entitled to purchase, on the terms hereof, . . . . . . shares of Common
Stock of MEDMARCO, INC., a Utah corporation (the "Company").
1. Exercise of Warrant. The terms and conditions upon which this
Warrant may be exercised, and the Common Stock covered hereby (the
"Warrant Stock") may be purchased, are as follows:
1.1 Term. This Warrant may be exercised in whole or in part
at any time after May 20, 1996, but in no case may this Warrant be
exercised later than the close of business on December 21, 2000 (the
"Termination Date"), after which time this Warrant shall terminate and
shall be void and of no further force or effect.
1.2 Purchase Price. The per share purchase price for the
shares of Common Stock to be issued upon exercise of this Warrant shall be
$1.75 per share of Common Stock.
1.3 Method of Exercise. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (a) the surrender of the
Warrant, together with a duly executed copy of the form of subscription
attached hereto, to the Company at its principal offices and (b) the
delivery of the purchase price by cashier's check payable to the Company's
order for the number of shares for which the purchase rights hereunder are
being exercised.
1.4 Issuance of Shares. Upon the exercise of the purchase
rights evidenced by this Warrant, a certificate or certificates for the
purchased shares shall be issued to the Holder as soon as practicable.
2. Certain Adjustments.
2.1 Mergers, Consolidations or Sale of Assets. If at any
time there shall be a capital reorganization (other than a combination or
subdivision of Warrant Stock otherwise provided for herein), or a merger
or consolidation of the Company with or into another corporation, or the
sale of the Company's properties and assets as, or substantially as, an
entirety to any other person, then, as a part of such reorganization,
merger, consolidation or sale, lawful provision shall be made so that the
Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified in this Warrant and upon payment of
the purchase price, the number of shares of stock or other securities or
property of the Company or the successor corporation resulting from such
reorganization, merger, consolidation or sale, to which a holder of the
Common Stock deliverable upon exercise of this Warrant would have been
entitled under the provisions of the agreement in such reorganization,
merger, consolidation or sale if this Warrant had been exercised
immediately before that reorganization, merger, consolidation or sale. In
any such case, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the reorganization, merger, consolidation or sale to the end
that the provisions of this Warrant (including adjustment of the purchase
price then in effect and the number of shares of Warrant Stock) shall be
applicable after that event, as near as reasonably may be, in relation to
any shares or other property deliverable after that event upon exercise of
this Warrant.
2.2 Splits and Subdivisions. In the event the Company
should at any time or from time to time fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of the holders of Common Stock entitled to
receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling
the holder thereof to receive directly or indirectly, additional shares of
Common Stock (hereinafter referred to as the "Common Stock Equivalents")
without payment of any consideration by such holder for the additional
shares of Common Stock or Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date of such distribution,
split or subdivision if no record date is fixed), the purchase price shall
be appropriately decreased and the number of shares of Warrant Stock shall
be appropriately increased in proportion to such increase of outstanding
shares.
2.3 Combination of Shares. If the number of shares of
Common Stock outstanding at any time after the date hereof is decreased by
a combination of the outstanding shares of Common Stock, the purchase
price shall be appropriately increased and the number of shares of Warrant
Stock shall be appropriately decreased in proportion to such decrease in
outstanding shares.
2.4 Certificate as to Adjustments. In the case of each
adjustment or readjustment of the purchase price pursuant to this Section
2, the Company will promptly compute such adjustment or readjustment in
accordance with the terms hereof and cause a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based to be delivered to the Holder of
this Warrant. The Company will, upon the written request at any time of
the Holder of this Warrant, furnish or cause to be furnished to such
Holder a certificate setting forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Warrant Stock and the
amount, if any, of other property at the time receivable upon the exercise
of the Warrant.
3. Fractional Shares. No fractional shares shall be issued in
connection with any exercise of this Warrant.
4. Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose or effecting the exercise of this
Warrant, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the exercise of this Warrant; and if at any
time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the exercise of the entire Warrant, in
addition to such other remedies as shall be available to the Holder of
this Warrant, the Company will use its reasonable best efforts to take
such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes.
5. Privilege of Stock Ownership. Prior to the exercise of this
Warrant, the Holder shall not be entitled, by virtue of holding this
Warrant, to any rights of a stockholder of the Company.
6. Transfers and Exchanges.
6.1 Subject to the limitations set forth below and subject
to compliance with applicable federal and state securities laws, this
Warrant and all rights hereunder are transferable in whole or in part by
Holder to a third party mutually acceptable to the Investor and the
Company. The transfer shall be recorded on the books of the Company upon
the surrender of this Warrant, properly endorsed, to the Company at its
principal offices and the payment to the Company of all transfer taxes and
other governmental charges imposed on such transfer. In the event of a
partial transfer, the Company shall issue to the several holders one or
more appropriate new warrants. The Company may deem and treat the
registered Holder as the absolute owner of the Warrant (notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Company) for all purposes, and the Company will not be affected by any
notice to the contrary. Transfer of ownership may only be effected by and
with the consent of the Company, and no rights under and by virtue of this
Warrant shall pass and be transferred separately and apart from this
Warrant.
6.2 All new warrants issued in connection with transfers,
exchanges or partial exercises shall be identical in form and provision to
this Warrant except as to the number of shares.
7. Successors and Assigns. The terms and provisions of this
Warrant shall be binding upon the Company and the Holder and their
respective successors and assigns, subject at all times to the
restrictions set forth in the Agreement.
8. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to the Company, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will make and
deliver a new warrant of like tenor and dated as of such cancellation, in
lieu of this Warrant.
9. Amendment. The Warrant may be amended only with the written
consent of the Holder and the Company set forth in a writing specifying
such amendment.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required
or granted herein shall be a Saturday or Sunday or shall be a legal
holiday, then such action may be taken or such right may be exercised,
except as to the purchase price, on the next succeeding day not a
Saturday, Sunday or legal holiday.
11. Notices. Any notice or demand authorized by this Warrant
shall be sufficiently given or made, if in writing and personally served,
sent by telecopy followed by written confirmation of receipt, or deposited
in the United States mail, registered or certified, return receipt
requested, postage prepaid, at or to the address or telecopy number as the
receiving party shall have specified most recently by written notice to
the other party. Notice shall be deemed given on the date of service if
personally served or if sent by telecopy. Notice mailed as provided
herein shall be deemed given on the next business day following the date
sent by Federal Express or comparable next-day-delivery courier service,
or on the third business day following the date mailed.
To the Company: Medmarco, Inc.
215 South State Street, Suite 535
Salt Lake City, UT 84111
Telecopy No.: (801) 532-7331
To the Holder: . . . . . . . . . . . . . .
. . . . . . . . . . . . . .
. . . . . . . . . . . . . .
12. Investment Representation. The Holder, by accepting this
Warrant, represents that the Holder is acquiring the Warrant for his own
account for investment purposes and not with a view to any offer or
distribution thereof and that the Holder will not sell or otherwise
dispose of the Warrant or the underlying Warrant Stock in violation of
applicable securities laws.
MEDMARCO, INC.
Dated: December 21, 1995 By: . . . . . . . . . . . . .
Its President and CEO
<PAGE>
SUBSCRIPTION
Medmarco, Inc.
215 South State Street, Suite 535
Salt Lake City, Utah 84111
Ladies and Gentlemen:
The undersigned hereby elects to purchase, pursuant to the
provisions of the warrant held by the undersigned, . . . shares of the
Common Stock of Medmarco, Inc., a Utah corporation.
The undersigned hereby represents and warrants that the undersigned
is acquiring such stock for his own account and not for resale or with a
view to distribution of any part thereof.
Dated: . . . . . . . . . . . . . . .
. . . . . . . . . . . . .
Address: . . . . . . . . . . . . .
. . . . . . . . . . . . . . .
(Social Security
or Taxpayer Identification
Number of Holder)
VOID AFTER 5:00 P.M. EASTERN TIME, ON , 1996.
THE WARRANT REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR
SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
PURSUANT TO THE PROVISIONS OF THAT ACT OR AN OPINION OF COUNSEL TO THE
COMPANY IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION AND THE PROVISIONS OF THIS
WARRANT ARE COMPLIED WITH.
MEDMARCO INC.
(a Georgia corporation)
Warrant for the purchase of 7500 Shares of Common Stock
par value $.001 per share
FOR VALUE RECEIVED, MEDMARCO INC. (the "Company"), a Georgia
corporation, hereby certifies that . . . . . . . . . . . , or assigns (the
("Holder"), is entitled, subject to the provisions of this Warrant, to
purchase from the Company at any time, or from time to time during the
period commencing on the date hereof and expiring at 5:00 p.m. Eastern
Time, on . . . . . . . . ,1996 (the "Expiration Date"), up to seventy-five
hundred (7,500) fully paid and non-assessable shares of Common Stock at a
price equal to $1.65 per share (the "Exercise Price").
The term "Common Stock" means the Common Stock, par value $.001 per
share, of the Company as constituted on March 31, 1993 (the "Base Date"),
together with any other equity securities that may be issued by the
Company in respect thereof or in substitution therefor. The exercise
price and/or the number of shares of Common Stock to be received upon the
exercise of this Warrant may be adjusted from time to time as hereinafter
set forth. The shares of Common Stock deliverable or delivered upon such
exercise, as adjusted from time to time, are hereinafter referred to as
"Warrant Stock".
Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant
certificate, and (in the case of loss, theft or destruction) of
satisfactory indemnification, and upon surrender and cancellation of this
Warrant certificate, if mutilated, the Company shall execute and deliver
a new Warrant certificate of like tenor and date.
1. Exercise of Warrant. This Warrant may be exercised, subject
to the requirements set forth below, in whole, or in part, at any time
during the period commencing on the date one year from the date hereof and
expiring 5:00 p.m. Eastern Time on the Expiration Date set forth above,
or, if such day is a day on which banking institutions in Las Vegas,
Nevada are authorized by law to close, then on the next succeeding day
that shall not be such a day, by presentation and surrender of this
Warrant certificate to the Company at its principal office, or at the
office of its stock transfer agent, if any, with the Warrant Exercise Form
attached hereto duly executed and accompanied by payment (either in cash
or by certified or official bank check, payable to the order of the
Company) of the aggregate Exercise Price for the number of shares
specified in such form and instruments of transfer, if appropriate, duly
executed by the Holder. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant certificate for
cancellation, execute and deliver a new Warrant certificate evidencing the
rights of the Holder thereof to purchase the balance of the shares
purchasable hereunder. Upon receipt by the Company of this Warrant
certificate, together with the Exercise Price, at its office, or by the
stock transfer agent of the Company at its office, if any, in proper form
for exercise as described above, together with an agreement to comply with
the restrictions on transfer and related covenants contained herein and a
representation as to investment intent and any other matter required by
counsel to the Company, signed by the Holder (and if other than the
original Holder accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Warrant),
the Holder shall be deemed to be the holder of record for the shares of
Common Stock issuable upon such exercise, even if the stock transfer books
of the Company shall then be closed or certificates representing such
shares of Common Stock shall not have been delivered to the Holder. The
Holder shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on exercise of this Warrant. The Company shall promptly
thereafter issue certificate(s) evidencing the Common Stock so purchased.
2. Reservation of Shares. The Company shall at all times reserve
for issuance and delivery upon exercise of this Warrant all shares of
Common Stock or other shares of capital stock of the Company (and other
securities) from time to time receivable upon exercise of this Warrant.
All such shares (and other securities) shall be duly authorized and, when
issued upon exercise, shall be validly issued, fully paid and non-
assessable.
3. No Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but the Company shall pay the Holder an amount equal to the fair
market value of such fractional share of Common Stock in lieu of each
fraction of a share otherwise called for upon any exercise of this
Warrant. For purposes of this Warrant, the fair market value of a share
of common Stock shall equal the closing sale price (or if not available
the average of the closing bid and asked prices) on the business day prior
to exercise of this Warrant, or, if the Common Stock is then not publicly
traded, then the price determined in good faith by the Board of Directors
of the Company.
4. Transfer.
(a) Securities Laws. Neither this Warrant nor the Warrant
Stock issuable upon the exercise hereof has been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or
under any state securities laws and unless so registered may not be
transferred, sold, pledged, hypothecated or otherwise disposed of
unless an exemption from such registration is available. In the
event Holder desires to transfer this Warrant or any of the Warrant
Stock issued, the Holder must give the Company prior written notice
of such proposed transfer including the name and address of the
proposed transferee. Such transfer may be made only either (i) upon
registration of the Warrants pursuant to the Securities Act of 1933
and applicable state securities laws; or (ii) upon publication by
the Securities and Exchange Commission (the "Commission") of a
ruling, interpretation, opinion or "no action letter" based upon
facts presented to said Commission, or (iii) upon receipt by the
Company of an opinion of counsel to the Company, in either case to
the effect that the proposed transfer will not violate the
provisions of the Securities Act, the Securities Exchange Act of
1934, as amended, or the rules and regulations promulgated under
either such act.
(b) Conditions to Transfer. Prior to any such proposed
transfer, and as a condition thereto, if such transfer is not made
pursuant to an effective registration statement under the Securities
Act, the Holder will, if requested by the Company, deliver to the
Company (i) an investment covenant signed by the proposed
transferee, (ii) an agreement by such transferee to the impression
of the restrictive investment legend set forth herein on the
certificate or certificates representing the securities acquired by
such transferee, (iii) an agreement by such transferee that the
Company may place a "stop transfer order" with its transfer agent or
registrar, and (iv) an agreement by the transferee to indemnify the
Company to the same extent as set forth in the next succeeding
paragraph.
(c) Indemnity. The Holder acknowledges that the Holder
understands the meaning and legal consequences of this Section 4,
and the Holder hereby agrees to indemnify and hold harmless the
Company, its representatives and each officer and director thereof
from and against any and all loss, damage or liability (including
all attorney's fees and costs incurred in enforcing this indemnity
provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained
in, or any other breach of, this Warrant, (b) any transfer of any of
this Warrant or the Warrant Stock in violation of the Securities
Act, the Securities Exchange Act of 1934, as amended, or the rules
and regulations promulgated under either of such acts, (c) any
transfer of this Warrant or any of the Warrant Stock not in
accordance with this Warrant or (d) any untrue statement or omission
to state any material fact in connection with the investment
representations or with respect to the facts and representations
supplied by the Holder to counsel to the Company upon which its
opinion as to a proposed transfer shall have been based.
(d) Transfer. Except as restricted hereby, this Warrant and
the Warrant Stock issued may be transferred by the Holder in whole
or in part at any time or from time to time. Upon surrender of this
Warrant certificate to the Company or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Company shall, without
charge, execute and deliver a new Warrant certificate in the name of
the assignee named in such instrument of assignment, and this
Warrant certificate shall promptly be cancelled. Any assignment,
transfer, pledge, hypothecation or other disposition of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of
execution, attachment or other process attempted upon this Warrant,
shall be null and void and without effect.
5. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law
or in equity, and the rights of the Holder are limited to those expressed
in this Warrant.
6. Anti-Dilution Provisions.
(a) Stock Splits, Dividends, Etc. (i) If the Company shall
at any time subdivide its outstanding shares of Common Stock (or
other securities at the time receivable upon the exercise of the
Warrant) by recapitalization, reclassification or split-up thereof,
or if the Company shall declare a stock dividend or distribute
shares of Voting Common Stock to its stockholders, the number of
shares of Common Stock subject to this Warrant immediately prior to
such subdivision shall be proportionately increased, and if the
Company shall at any time combine the outstanding shares of Voting
Common Stock by recapitalization, reclassification or combination
shall be proportionately decreased. Any such adjustment and
adjustment to the Exercise Price pursuant to this Section 6 shall be
effective at the close of business on the effective date of such
subdivision or combination or if any adjustment is the result of a
stock dividend or distribution then the effective date for such
adjustment based thereon shall be the record date therefor; (ii)
Whenever the number of shares of Common Stock purchasable upon the
exercise of this Warrant is adjusted, as provided in this Section 6,
the Exercise Price shall be adjusted to the nearest cent by
multiplying such Exercise Price immediately prior to such adjustment
by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise immediately
prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately
thereafter.
(b) Adjustment for Reorganization, Consolidation, Merger,
Etc. In case of any reorganization of the Company (or any other
corporation, the securities of which are at the time receivable on
the exercise of this Warrant) after the Base Date or in case after
such date the Company (or any such other corporation) shall
consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in
each such case, the Holder of this Warrant upon the exercise as
provided in Section 1 at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be
entitled to receive, in lieu of the securities and property
receivable upon the exercise of this Warrant prior to such
consummation, the securities or property to which such Holder would
have been entitled upon such consummation if such Holder had
exercised this Warrant immediately prior thereto; in each such case,
the terms of this Warrant shall be applicable to the securities or
property received upon the exercise of this Warrant after such
consummation. The Exercise Price shall also be adjusted in the
event, if the Company undertakes a public offering of its Common
Stock, the initial public offering price per share of such Common
Stock shall be greater or less than $5.00 per share. The adjustment
shall be made such that difference between (i) the exercise price
multiplied by the number of shares of Warrant Stock to be purchased
and (ii) the initial public offering price of the shares sold to the
public multiplied by the number of shares of Warrant Stock subject
to exercise of the Warrant, is equal to the principal amount of the
loan made to the Company by the original Holder of the Warrant.
(c) Certificate as to Adjustments. In each case of an
adjustment in the number of shares of Common Stock receivable on the
exercise of this Warrant, the Company at its expense shall promptly
compute such adjustment in accordance with the terms of the Warrant
and prepare a certificate executed by an officer of the Company
setting forth such adjustment and showing the facts upon which such
adjustment is based. The Company shall forthwith mail a copy of
each such certificate to each Holder.
(d) Notices of Record Date, Etc. In case:
(i) the Company shall take a record of the holders of
its Common Stock (or other securities at the time receivable
upon the exercise of the Warrant) for the purpose of entitling
them to receive any dividend (other than a cash dividend at
the same rate as the rate of the last cash dividend
theretofore paid) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities, or to receive any
other right; or
(ii) of any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, and in each
such case, the Company shall mail or cause to be mailed to
each Holder a notice specifying, as the case may be, (A) the
date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (B) the
date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, to be
fixed, as to which the holders of record of Common Stock (or
such other securities at the time receivable upon the exercise
of this Warrant) shall be entitled to exchange their shares of
Common Stock (or such other securities) for securities or
other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be
mailed at least twenty (20) days prior to the date therein
specified, and this Warrant may be exercised prior to said
date during the term of the Warrant.
(e) Threshold for Adjustments. Anything in paragraph 6(a) or
(b) to the contrary notwithstanding, the Company shall not be
required to give effect to any adjustment until the cumulative
resulting adjustment in the Exercise Price shall have required a
change of the Exercise Price by at least $.05 per share, but when
the cumulative net effect of more than one adjustment so determined
shall be to change the Exercise Price by at least $.05 per share,
such full change in the Exercise Price shall thereupon be given
effect. No adjustment shall be made by reason of the issuance of
shares upon conversion rights, stock issuance rights or similar
rights currently outstanding or any change in the number of treasury
shares held by the Company.
(f) Adjustment by Underwriter, Etc. The Holder will
cooperate with the Company in the event reformation or amendment of
this Warrant and the terms of its exercise shall be required in good
faith by the underwriter(s) of a public offering of the Company's
Common Stock or in order to satisfy the requirements of the
Securities and Exchange Commission, federal or state securities laws
or the National Association of Securities Dealers, as the case may
be.
7. Legend and Stop Transfer Orders. Unless the shares of Warrant
Stock have been registered under the Securities Act, upon exercise of this
Warrant and the issuance of any of the shares of Warrant Stock, the
Company shall instruct its transfer agent to enter stop transfer orders
with respect to such shares, and all certificates representing shares of
Warrant Stock shall bear on the face thereof substantially the following
legend, insofar as is consistent with Georgia law:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933, as
amended, and may not be sold, offered for sale, assigned,
transferred or otherwise disposed of unless registered
pursuant to the provisions of that Act or an opinion of
counsel to the company is obtained stating that such
disposition is in compliance with an available exemption from
such registration."
8. Registration. Upon demand of holders of a majority of the
Warrants (or underlying Common Stock issued upon the exercise thereof)
including this Warrant issued concurrently herewith, at any time after one
year after the closing of an initial public offering of the Company's
securities registered under the Securities Act of 1933, as amended, the
Company shall, on one occasion, register for sale under such Act the
Warrant Stock and the stock underlying such Warrants, provided the same
may not then be sold under Rule 144 under such Act, and provided, further,
that upon receipt of such demand, the Company shall have the option to
redeem Warrants not yet exercised at a price calculated as follows: (a)
the difference between the average closing bid price of the Company's
Common Stock on the ten (10) trading days prior to receipt of such demand
minus the Exercise Price of the Warrant, multiplied by (b) the number of
shares covered by the Warrant. Such option shall be exercised by notice
thereof to Warrant holders and the closing of such redemption shall be
held within 20 business days of such notice.
9. Notices. All notices required hereunder shall be in writing and
shall be deemed given (a) when delivered personally, (b) the next business
day when sent by nationally recognized overnight courier service procuring
a return receipt, or (c) within three business days after mailing when
mailed by certified or registered mail, return receipt requested, to the
Company at 3261 South Highland Dr. #613, Las Vegas, Nevada 89109,
Attention: President, with a copy to Minter & Case, 1527 North Broadway,
Wichita, Kansas 67201-0367, Attention: Robert Minter, Esq., or to the
Holder at his address on the Company's records or at such other address of
which the company or Holder has been advised by notice hereunder.
10. Applicable Law. This Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the
State of Georgia.
11. Miscellaneous. This Warrant represents the entire agreement of
the Company with respect to the subject matter hereof and may be changed
only by a written agreement executed by the Company and the Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
on its behalf, in its corporate name, by its duly authorized officer, all
as of the . . . . . day of . . . . . . . . . . . . ., 1993.
MEDMARCO, INC.
By: James C. McNees, President
________, 1996
Medmarco, Inc.
215 South State Street, Suite 535
Salt Lake City, Utah 84111
Re: Registration Statement on Form S-3 under the Securities Act of
1933 (the "Registration Statement")
Gentlemen:
This firm has acted as special counsel to Medmarco, Inc., a
Utah corporation, (the "Company") in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), of up to 803,000
shares of common stock, par value $.001 (the "Shares") issued or to be
issued in connection with the acquisition of Oxycare, Inc. and to be
issued upon exercise of certain warrants held by former bridge loan
lenders of the Company, as more fully described in the Registration
Statement.
In connection with this matter, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such
documents and corporate or other records, and have obtained such
certificates, letters, representations and information from the officers,
directors and employees of the Company and from others, and such other
instruments and documents, as we have deemed necessary to form a basis for
the opinion hereinafter expressed. In making the aforesaid examinations,
we have assumed the genuineness of all signatures and the conformity to
original documents of all copies furnished to us as originals or
photocopies.
Based upon the foregoing and in reliance thereon, it is our
opinion that the Shares described in the above-referenced Registration
Statement, to be issued, upon issuance and delivery and payment therefor
in the manner prescribed in the Registration Statement will be validly
issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit
that we come within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
Very truly yours,
DURHAM, EVANS, JONES & PINEGAR, P.C.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of
our report dated March 8, 1996 (except with respect to matters discussed
in the first subheading of Note 2, as to which the date is March 29, 1996)
included in Medmarco, Inc.'s Form 10-KSB for the year ended December 31,
1995 and to all references to our Firm included in this registration
statement.
Arthur Andersen LLP
Salt Lake City, Utah
June 25, 1996
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-3 of our report
dated March 19, 1995 (except with respect to matters discussed in the
first subheading of Note 2 as to which the date is March 29, 1996)
included in Medmarco, Inc.'s Form 10-KSB for the year ended December 31,
1995, and to all references to our Firm included in this registration
statement.
/s/ BRADSHAW, SMITH & CO.
Bradshaw, Smith & Co.
Las Vegas, Nevada
June 27, 1996
