<PAGE> 1
As filed with the Securities and Exchange Commission on March 21, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
APACHE MEDICAL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 7371 23-2476415
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1650 Tysons Boulevard
McLean, Virginia 22102
Telephone: (703) 847-1400
(Address, including zip code, telephone number, including area code, of
registrant's principal executive offices)
AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
OF APACHE MEDICAL SYSTEMS, INC.
APACHE MEDICAL SYSTEMS, INC. NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full title of the plans)
Gerald E. Bisbee, Jr., Ph.D.
Chairman and Chief Executive Officer
APACHE Medical Systems, Inc.
1650 Tysons Boulevard
McLean, Virginia 22102
Telephone: (703) 847-1400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<S> <C>
Karen A. Erikson, Esq. George C. McKann, Esq.
APACHE Medical Systems, Inc. Gardner, Carton & Douglas
1650 Tysons Boulevard 321 North Clark Street, Suite 3200
McLean, Virginia 22102 Chicago, Illinois 60610
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
to be Registered Registered (1) Share Price Registration Fee
- ---------------------------------------- -------------- -------------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, (par value $.01 per share)
- -Reserved under Amended and Restated
Employee Stock Option Plan (2) 425,841 $ 6.1875 $2,634,892 $ 799
- -Outstanding under Amended and Restated
Employee Stock Option Plan (3) 1,270,748 $ 6.9038 $8,772,990 $2,659
- -Reserved under Non-Employee Directors
Stock Option Plan (2) 57,500 $ 6.1875 $ 355,781 $ 108
- -Outstanding under Amended and Restated
Non-Employee Director Stock Option Plan
(4) 12,500 $10.0625 $ 125,781 $ 39
--------- ------
TOTAL 1,766,589 $3,605
</TABLE>
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(1) Together with an indeterminable number of additional securities in order
to adjust the number of securities reserved for issuance pursuant to the
plans as the result of a stock split, stock dividend or similar
transaction affecting the Common Stock, pursuant to 17 C.F.R. Section
230.416.
(2) Estimated in accordance with Rule 457(c) and (h)(1), the proposed maximum
offering price per share, proposed maximum aggregate offering price and
the amount of the registration fee are based upon the average of the high
and low prices reported on the Nasdaq National Market on March 19, 1997
with respect to 425,841 shares available for grant under the Amended and
Restated Employee Stock Option Plan and 57,500 shares available for grant
under the Non-Employee Director Stock Option Plan.
(3) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average
exercise price of $6.9038 per share for outstanding options to purchase a
total of 1,270,748 shares of Common Stock.
(4) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average
exercise price of $10.0625 per share for outstanding options to purchase a
total of 12,500 shares of Common Stock.
<PAGE> 3
PROSPECTUS
APACHE MEDICAL SYSTEMS, INC.
751,362 SHARES OF COMMON STOCK
(par value $.01 per share)
This Prospectus may be used by certain persons (the "Selling
Stockholders"), who may be deemed to be affiliates of APACHE Medical Systems,
Inc., a Delaware corporation (the "Company" or "APACHE"), to sell shares of
Common Stock, $.01 par value per share, of the Company (the "Common Stock"),
which have been acquired or will be acquired by the Selling Stockholders
pursuant to the exercise of all or any portion of certain stock options granted
pursuant to the Amended and Restated Employee Stock Option Plan of APACHE
("Option Plan") and the APACHE Non-Employee Director Stock Option Plan
("Director Plan") (the Option Plan and the Director Plan are referred to
together as the "Plans"). It is anticipated that the Selling Stockholders will
offer shares of Common Stock for sale at prevailing prices on the Nasdaq
National Market ("Nasdaq") on the date of sale. All proceeds from any sale of
such shares of Common Stock will inure to the benefit of the Selling
Stockholders. The Company will receive none of the proceeds from the sale of
the shares of Common Stock which may be offered hereby, but may receive funds
upon the exercise of stock options pursuant to which the Selling Stockholders
will acquire the shares of Common Stock covered by this Prospectus, which
funds, if any, will be used by the Company for working capital. All expenses
of the registration incurred in connection herewith are being borne by the
Company, but all selling and other expenses incurred by individual Selling
Stockholders will be borne by such Selling Stockholders.
The Common Stock is listed and traded on the Nasdaq National Market under
the symbol "AMSI." On March 19, 1997, the last reported sale price was $6.125
per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is March 21, 1997.
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No person has been authorized to give any information or make any
representations not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the Common
Stock in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation.
No action has been or will be taken in any jurisdiction by the Company or
the Selling Stockholders that would permit a public offering of the Common
Stock or possession or distribution of this Prospectus in any jurisdiction
where action for that purpose is required, other than in the United States.
Persons into whose possession this Prospectus comes are required by the Company
and the Selling Stockholders to inform themselves about and to observe any
restrictions as to the offering of the Common Stock and the distribution of
this Prospectus.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act of 1933, as amended (the "Securities Act") with respect to the Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto.
For further information with respect to the Company and the Common Stock,
reference is made to such Registration Statement, including the exhibits and
schedules thereto, a copy of which may be obtained from the Securities and
Exchange Commission. The statements contained in this Prospectus as to the
contents of any document filed as an exhibit are of necessity brief
descriptions thereof and are not necessarily complete; each such statement is
qualified in its entirety by reference to such document. The Registration
Statement, including exhibits and schedules thereto, may be inspected without
charge at the facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the regional offices
of the Commission located at Seven World Trade Center, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of the materials may be obtained from the Public Reference
Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and its public reference facilities in New York, New
York, and Chicago, Illinois, at prescribed rates. In addition, electronically
filed documents, including reports, proxy and information statements and other
information regarding the Company, can be obtained from the SEC's Web site at:
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are hereby incorporated by reference, except as superseded or
modified herein:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 30, 1996; and
2. The description of the shares of the Company's Common Stock, $.01
par value per share, contained in the Company's Registration Statement on
Form 8-A (Registration No. 000-20805), filed with the Commission on June
4, 1996 registering such shares pursuant to Section 12 of the Exchange
Act including any amendment or report updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of Common Stock shall be deemed to be
incorporated in and made a part of this Prospectus by reference from the date
of filing 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 for purposes of this Prospectus to the extent of a statement
contained herein or in any subsequently filed document that is also
incorporated by reference herein modifies or replaces such statement. Any
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<PAGE> 5
statements so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Upon oral or written request, the Company will provide without charge a
copy of any document incorporated in this Prospectus by reference, exclusive of
exhibits (unless such exhibits are specifically incorporated by reference into
such documents), to each person, including any beneficial owner, to whom this
Prospectus is delivered. Requests for such documents should be directed to
APACHE Medical Systems, Inc., 1650 Tysons Boulevard, McLean, Virginia 22102,
Attention: Assistant Secretary (telephone (703) 847-1400).
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THE COMPANY
APACHE provides clinically-based support information systems to the
healthcare industry. The Company believes that it is the only healthcare
information company that can provide hospitals and physicians with
patient-specific, concurrent and predictive outcomes information at the point
of care that can be used to assist them in making clinical and resource
utilization decisions. APACHE's products and services address the information
needs of both clinicians and healthcare administrators by enabling joint access
to clinical and cost information, which facilitates both the containment of
costs and the delivery of high-quality care. APACHE's products and services
are focused on high-risk, high-cost patients, such as cardiovascular care,
critical care and certain chronically ill patients, who typically account for a
disproportionately large share of hospital costs.
The Company was incorporated in Delaware in 1987 and maintains its
executive offices at 1650 Tysons Boulevard, McLean, Virginia 22101. The
Company's telephone number is (703) 847-1400. References in this Prospectus to
"APACHE" or the "Company" include APACHE Medical Systems, Inc. and its
wholly-owned subsidiary in the United Kingdom, Critical Audit, Ltd.
RISK FACTORS
In addition to the other information in this Prospectus, the following
should be considered carefully by prospective investors in evaluating the
Company and its business before purchasing shares of Common Stock offered
hereby.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT; EXPECTED LOSSES;
UNCERTAINTY OF FUTURE PROFITABILITY
The Company has never recorded an operating profit and had an accumulated
deficit of approximately $23.6 million as of December 31, 1996. The Company
expects to continue to record losses for at least the next three quarters. The
ability of the Company to achieve profitability in the future largely depends
on its ability to generate revenues from its products and services. In view of
the Company's operating history, there can be no assurance that the Company
will be able to generate revenue that is sufficient to achieve profitability,
to maintain profitability on a quarterly or annual basis or to sustain or
increase its revenue growth in future periods. The Company's limited
capitalization may adversely affect the ability of the Company to raise
additional capital in the future and could impair the Company's ability to
invest in research and development, sales and marketing programs and other
operations, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations and on the price of the
Common Stock.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's quarterly revenues and operating results have varied
significantly in the past and are likely to vary from quarter to quarter in the
future. Quarterly revenues and operating results may fluctuate as a result of
a variety of factors, including: the Company's relatively long sales cycle;
variable customer demand for its products and services; changes in the
Company's product mix and the timing and relative prices of product sales; the
loss of customers due to consolidation in the healthcare industry; changes in
customer budgets; investments by the Company in marketing or other corporate
resources; acquisitions of other companies or assets; the timing of new product
introductions and enhancements by the Company and its competitors; changes in
distribution channels; sales and marketing promotional activities and trade
shows; and general economic conditions. Further, due to the relatively fixed
nature of most of the Company's costs, which primarily include personnel as
well as facilities costs, an unanticipated shortfall in revenue in any fiscal
quarter would have an adverse effect on the Company's results of operations in
that quarter. Accordingly, the Company's operating results for any particular
quarterly period may not be indicative of results for future periods. Although
the Company has not historically experienced any material seasonality in its
operating results, the Company could experience such seasonality in the future,
which could cause fluctuations in the Company's quarterly results.
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UNCERTAINTY OF MARKET ACCEPTANCE
The Company's future success and financial performance will depend in
large part on its ability to successfully market its products and services. To
date, the Company's healthcare provider customers include over 500 of the
approximately 5,200 community hospitals in the United States. Healthcare
providers comprise most of the Company's customers to date. The Company only
recently began to target sales to healthcare suppliers and has not yet
completed any sales to healthcare payers. There can be no assurance that the
Company will be able to achieve more extensive penetration of its target
markets. The failure to do so could have a material adverse effect on the
Company's business, financial condition and results of operations and on the
price of the Common Stock.
The Company's future success and financial performance will also depend on
its ability to meet the increasingly sophisticated needs of its customers
through the timely development and successful introduction of new and enhanced
versions of its products and services. The Company believes that significant
continuing product development efforts will be required to sustain the
Company's growth and that such efforts have inherent risks. The Company is
currently expanding its products and services to include additional high-risk,
high-cost disease categories and to broaden coverage across the continuum of
care. There can be no assurance that the Company will be successful in
entering new markets or in developing and marketing new or enhanced products
and services, or that it will not experience significant delays in the
introduction of new products and services. In addition, there can be no
assurance that new or enhanced products or services developed by the Company
will meet the requirements of healthcare providers, suppliers or payers and
achieve market acceptance. The failure to enter new markets successfully, to
develop new products or to achieve market acceptance for new products could
have a material adverse effect on the Company's business, financial condition
and results of operations and on the price of the Common Stock.
STATE AND FEDERAL GOVERNMENT REGULATION
The confidentiality of patient records and the circumstances under which
such records may be released are subject to substantial regulation by state and
federal governments. These state and federal laws and regulations govern both
the disclosure and use of confidential patient medical record information. To
protect patient confidentiality, data entries to APACHE's databases omit any
patient identifiers, including name, address, hospital and physician. The
Company believes that its procedures comply with the laws and regulations
regarding the collection of patient data in substantially all jurisdictions,
but regulations governing patient confidentiality rights are evolving rapidly
and are often unclear and difficult to apply in the rapidly restructuring
healthcare market. Additional legislation governing the dissemination of
medical record information is continually being proposed at both the state and
federal level. This legislation may require holders or users of such
information to implement security measures that may result in substantial cost
to the Company. There can be no assurance that changes to state or federal
laws will not materially restrict the ability of the Company to obtain or
disseminate patient information. The inability to obtain or disseminate
patient information could have a material adverse effect on the Company's
business, financial condition and results of operations and on the price of the
Common Stock.
Certain products, including software applications, intended for use in the
diagnosis of disease or other conditions, or in the cure, treatment, mitigation
or prevention of disease, are subject to regulation by the United States Food
and Drug Administration (the "FDA") as medical devices. The laws administered
by the FDA impose substantial regulatory controls over the manufacturing,
labeling, testing, distribution, sale, marketing and promotion of medical
devices and other related activities. These regulatory controls can include
compliance with the following requirements: manufacturer establishment
registration and device listing; current good manufacturing practices;
completion of premarket notification or premarket approval; medical device
adverse event reporting; and general controls prohibiting misbranding and
adulteration. Violations of the laws concerning medical devices can result in
severe criminal and civil penalties and other sanctions. In its 1989 Policy
for the Regulation of Computer Products (the "1989 Policy Statement"), the FDA
stated that it intended to issue regulations exempting certain clinical
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<PAGE> 8
decision support software products from a number of regulatory controls, and
that until those regulations were issued it would not require manufacturers of
such products to comply with requirements other than the general controls. The
Company believes that its products are not medical devices and, thus, are not
subject to the controls imposed on manufacturers of such products. The Company
further believes that to the extent that its products were determined to be
medical devices, the products would fall within the exemptions for decision
support systems provided by the 1989 Policy Statement. The Company has not
taken action to comply with the controls that would otherwise apply if the
Company's products were non-exempt medical devices. The FDA has stated that it
intends to revise its 1989 Policy Statement and that it may eliminate some or
all of the exemptions that it currently allows. Accordingly, there can be no
assurance that the FDA will not now or in the future make determinations that
the Company's current or future products are medical devices subject to FDA
regulations and are ineligible for the exemptions from those regulations. If
the FDA made such determinations, the Company would not be able to market its
products without obtaining FDA clearance of premarket notifications, or FDA
approval of premarket approval applications, submitted by the Company. The
regulatory process can be lengthy, expensive, and uncertain; securing FDA
clearances or approvals may require the submission of extensive nonclinical and
clinical safety and effectiveness data together with other supporting
information to the FDA; and there could be no assurance as to when if ever the
FDA clearances or approvals would be obtained. There can be no assurance that
the Company's current or future products will qualify for future exemptions, if
any, nor can there be any assurance that any future requirements will not have
a material adverse effect on the Company's business, financial condition,
results of operations or on the price of the Common Stock.
In addition to legislation regarding patient records and potential FDA
regulation, state and federal lawmakers have proposed, and are likely to
continue to propose, a number of other legislative initiatives regulating
various aspects of the healthcare industry. The Company is unable to predict
what impact, if any, such legislation could have on the Company's business,
financial condition and results of operations or on the price of the Common
Stock.
INTEGRITY AND RELIABILITY OF METHODOLOGIES AND DATABASES
The Company's success is highly dependent on the integrity and reliability
of its methodologies and databases. The Company's methodologies have been
validated by a large number of academic researchers. The Company believes that
it takes adequate precautions to safeguard the completeness and consistency of
the data in its databases. Moreover, while the Company believes that the
information contained in its databases is representative of the clinical and
financial aspects of various types of hospitals and patients, there can be no
assurance that such information is appropriate for comparative analysis in all
cases or that the databases accurately reflect general or specific trends in
the healthcare industry. If the validity of the Company's methodologies were
challenged in the future or if the information contained in the databases were
found, or were perceived, to be inaccurate or unreliable, there could be a
material adverse effect on the Company's business, financial condition and
results of operations and on the price of the Common Stock.
RISK OF LIABILITY CLAIMS
Customer reliance on the Company's products and services could result in
exposure of the Company to liability claims if the Company's products fail to
perform as intended or if patient care decisions based in part on guidance from
the Company's products or services are challenged. Even unsuccessful claims
could result in the expenditure of funds in litigation, diversion of management
time and resources or damage to the Company's reputation and the marketability
of the Company's products and services. While the Company takes contractual
steps to obtain indemnification for certain liabilities and maintains general
commercial liability insurance, there can be no assurance that a successful
claim could not be made against the Company, that the amount of indemnification
payments or insurance would be adequate to cover the costs of defending against
or paying such a claim or that damages payable by the Company would not have a
material adverse effect on the Company's business, financial condition and
results of operations and on the price of the Common Stock.
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TECHNOLOGICAL CHANGE
The healthcare information industry is relatively new and is experiencing
technological change, changing customer needs, frequent new product
introductions and evolving industry standards. In addition, as the computer
and software industries continue to experience rapid technological change, the
Company must be able to quickly and successfully adapt its products so that
they continue to integrate well with the other computer platforms and software
employed by its customers. There can be no assurance that the Company will not
experience difficulties, including lack of necessary capital or expertise, that
could delay or prevent the successful development and introduction of product
enhancements or new products in response to technological changes. If the
Company is unable to respond to technological changes in a timely and
cost-efficient manner, there could be a material adverse effect on the
Company's business, financial condition and results of operations and on the
price of the Common Stock.
RELIANCE ON THIRD PARTY TO MARKET AND DISTRIBUTE PRODUCTS AND SERVICES
In June 1996, the Company entered into an agreement with an affiliate of
Premier Inc. ("Premier"), which provides buying services to a group of
approximately 1,800 hospitals. Pursuant to this agreement, which expires on
December 31, 1999, the Company and Premier are cooperating to market the
Company's products and services to the hospitals in the Premier buying group.
Although the Company continues to market its products and services through
other channels, the relationship with Premier has become an important part of
the Company's marketing and distribution strategy. There can be no assurance
that the Company's relationship with Premier will continue. Furthermore, if
the relationship with Premier is terminated, there can be no assurance that the
Company will be able to replace the Premier relationship with other means of
marketing and distributing its products and services. Failure to continue this
relationship or to develop other means of marketing and distributing its
products and services could have a material adverse effect on the Company's
revenues and operating results. Pursuant to the agreement with the Premier
affiliate, the Company has agreed to provide certain discounts to hospitals in
the Premier buying group. There can be no assurance that the Company's
relationship with Premier or the discounts for Premier buying group members
will not have an adverse effect on the Company's ability to market its products
and services to potential customers outside of the Premier buying group. If
the Company is unable to successfully market its products and services to
customers outside of the Premier buying group, there could be a material
adverse effect on the Company's business, financial condition and results of
operations or on the price of the Common Stock.
HIGHLY COMPETITIVE INDUSTRY
The market for healthcare information systems and services is highly
competitive and rapidly changing. The Company believes that the principal
competitive factors for clinical decision support products and services are the
quality and depth of the underlying clinical outcomes databases, the
proprietary nature of methodologies, databases and technical resources, the
usefulness of the data and reports generated by the software, customer service
and support, compatibility with the customer's existing information systems,
potential for product enhancement, vendor reputation, price and the
effectiveness of sales and marketing efforts.
The Company's competitors include other companies that collect and
distribute healthcare data, such as Impath Laboratories Inc., Mecon, Inc., HCIA
Inc., Summit Medical Systems, Inc., Transition Systems Inc. and Oacis Health
Care Holdings, Corp. Other companies that provide healthcare information
systems include Cerner Corporation, HBO & Company, Shared Medical Systems
Corporation, Phamis Inc., HPR Inc. and Vitalcom. However, the Company's
products and services are differentiated from the products and services offered
by those competitors by virtue of the fact that the Company's products and
services, unlike competing products and services, focus primarily on high-risk,
high-cost patients and provide both concurrent and predictive outcomes
information. Moreover, the Company believes that there are no dominant
competitors to the Company in the field of healthcare information systems that
focus on high-risk, high-cost patients or that provide concurrent and
predictive outcomes
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<PAGE> 10
information. Many of the Company's competitors have greater financial, product
development, technical and marketing resources than the Company and currently
have, or may develop or acquire, substantial installed customer bases in the
healthcare industry. The Company also faces significant competition from
internal information services at individual hospitals, large hospital
alliances, for-profit hospital chains and managed care companies, many of which
have developed their own outcomes databases. As the market for decision
support systems develops, additional competitors may enter the market and
competition may intensify. While the Company believes that it has successfully
differentiated itself from competitors, there can be no assurance that future
competition would not have a material adverse effect on the Company's business,
financial condition and results of operations or on the price of the Common
Stock.
UNCERTAINTY AND CONSOLIDATION IN THE HEALTHCARE INDUSTRY
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operations
of healthcare industry participants. During the past several years, state and
federal government regulation of reimbursement rates and capital expenditures
in the United States healthcare industry has increased. Lawmakers continue to
propose programs to reform the United States healthcare system, which may
contain proposals to increase governmental involvement in healthcare, lower
Medicare and Medicaid reimbursement rates or otherwise change the operating
environment for the Company's customers. Healthcare industry participants may
react to these proposals by curtailing or deferring investments, including
investments in the Company's products. In addition, the healthcare industry
has experienced, and could continue to experience, consolidation as a result of
mergers and acquisitions of healthcare providers, suppliers and payers, which
typically puts additional pressure on the consolidated companies to reduce
expenses. The Company cannot predict what impact, if any, such factors would
have on its business, financial condition and results of operations or on the
price of the Common Stock.
In addition, many healthcare providers are consolidating to create larger
healthcare delivery enterprises with greater regional market power. Such
consolidation could erode the Company's existing customer base and reduce the
size of the Company's target market. In addition, the resulting enterprises
could have greater bargaining power, which could lead to price erosion
affecting the Company's products and services. The reduction in the size of
the Company's target market or the failure of the Company to maintain adequate
price levels could have a material adverse effect on the Company's business,
financial condition and results of operations or on the price of the Common
Stock.
DEPENDENCE ON KEY PERSONNEL AND OTHERS
The success of the Company and of its business strategy is dependent in
large part on its key management and operating personnel, including its
Chairman and Chief Executive Officer, Gerald E. Bisbee, Jr., Ph.D. The Company
has entered into confidentiality and noncompetition agreements with each of its
executive officers. The Company believes that its success in the future will
also depend upon its ability to attract and retain highly skilled technical,
managerial and marketing personnel. Such individuals are in high demand and
are often subject to competing offers. In particular, the Company's success
will depend on its ability to retain the services of its executive officers and
to hire additional management personnel as needed. The Company will also have
an ongoing need to expand the number of its management and support personnel.
The loss of the services of one or more members of management or key employees,
or the inability to hire additional personnel as needed, could have a material
adverse effect on the Company's business, financial condition and results of
operations. While the Company maintains a key person life insurance policy on
Dr. Bisbee, the amount of insurance may not be sufficient to offset the impact
of the Company's loss of the services of Dr. Bisbee.
William A. Knaus, M.D., a founder, a director and the Chief Scientific
Advisor of the Company, was instrumental in the creation of the APACHE critical
care methodology. Although the Company has obtained a perpetual license to
this methodology, there can be no assurance that a significant change in Dr.
Knaus's
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relationship with the Company would not have a material adverse effect on the
Company's business, financial condition and results of operations or on the
price of the Common Stock.
DEPENDENCE ON PROPRIETARY ASSETS
The Company has made significant investments in its methodologies,
databases and technology and relies on a combination of trade secret and
copyright laws, nondisclosure and other contractual provisions, and technical
measures to protect its proprietary rights. There can be no assurance that
these protections will be adequate or that the Company's competitors will not
independently develop methodologies, databases or technologies that are
substantially equivalent or superior to those of the Company. In addition,
there can be no assurance that the legal protections and precautions taken by
the Company will be adequate to prevent infringement or misappropriation of the
Company's proprietary assets.
Although the Company believes that its products do not infringe upon the
proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against the Company in the future
or that a license or similar agreement will be available on reasonable terms in
the event of an unfavorable ruling on any such claim. In addition, any such
claim may require the Company to incur substantial litigation expenses or
subject the Company to significant liabilities and could have a material
adverse effect on the Company's business, financial condition and results of
operations and on the price of the Common Stock.
The Company's ability to successfully maintain and expand its business
through the acquisition of rights to, and the refinement and development of,
its methodologies and databases is dependent, in large part, upon its
contractual relationships with academic researchers and physicians. There can
be no assurance that a disruption or severance of any one or more of these
relationships would not have a material adverse effect on the Company's
business, financial condition and results of operations or on the price of the
Common Stock.
IDENTIFICATION AND INTEGRATION OF ACQUISITIONS
The Company has expanded its product line through the acquisition of
complementary businesses, products, methodologies, databases and technologies
and may seek additional acquisitions in the future. Acquisitions involve
numerous risks, including difficulties in the assimilation of operations and
products, the ability to manage geographically remote units, the diversion of
management's attention from other business concerns, the risks of entering
markets in which the Company has either limited or no direct experience and the
potential loss of key employees of the acquired companies.
Identifying and pursuing acquisition opportunities, integrating acquired
products and businesses, and managing growth requires a significant amount of
management time and skill. The Company has limited experience in acquiring
businesses and there can be no assurance that the Company will be effective in
identifying and effecting attractive acquisitions or assimilating such
acquisitions in a timely fashion. Any delay or failure to successfully
assimilate such acquisitions could result in the expenditure of money and
increased demands on management's time and could have a material adverse effect
on the Company's business, financial condition and results of operations and on
the price of the Common Stock. In addition, acquisitions may involve the
expenditure of significant funds and/or the issuance of additional securities,
which may be dilutive to stockholders.
FUTURE ADDITIONAL CAPITAL REQUIREMENTS; NO ASSURANCE CAPITAL WILL BE AVAILABLE
Since its inception, the Company has financed its operations through cash
provided by operations, the sale of equity and the issuance of debt
instruments. If the Company were unable to generate sufficient revenues to
fund its operations in the future, the Company may be required to raise
additional funds to meet its capital and operating requirements through public
or private financing, including equity financing. Any additional equity
financing may be dilutive to stockholders, and debt financing, if available,
will require payment of interest and may involve
-9-
<PAGE> 12
restrictive covenants that could impose limitations on the operating
flexibility of the Company. Adequate funds for the Company's operations may
not be available when needed and, if available, may not be on terms attractive
to the Company. The failure to obtain funding on a timely basis could have a
material adverse effect on the Company's business, financial condition and
results of operations and on the price of the Common Stock.
SHARE PRICE VOLATILITY
The trading price of the Company's Common Stock could be subject to wide
fluctuations in response to quarter-to-quarter variations in operating results,
changes in earnings estimates by analysts, announcements of technological
innovations or new products by the Company or its competitors, general
conditions in the healthcare or software and computer industries, developments
or disputes concerning copyrights or proprietary rights, regulatory
developments and economic or other factors. In addition, in recent years the
stock market in general, and the shares of healthcare and computer software
companies in particular, have experienced extreme price fluctuations. This
volatility has had a substantial effect on the market prices of securities
issued by many companies for reasons unrelated to the operating performance of
the specific companies. These broad market fluctuations may adversely affect
the market price of the Common Stock.
COMPUTER SOFTWARE
Like many companies, APACHE is currently in the process of evaluating its
computer software and databases to determine whether or not modifications will
be required to prevent problems related to the year 2000. These problems,
which have been widely reported in the media, could cause malfunctions in
certain software and databases with respect to dates on or after January 1,
2000, unless corrected. At this time, the Company has not yet determined the
cost of evaluating its computer software or databases or of making any
modifications required to correct any "Year 2000" problems.
EFFECT OF ANTI-TAKEOVER PROVISIONS
The Company is subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which prohibits the Company from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date on which the person first becomes an "interested
stockholder," unless the business combination is approved in a prescribed
manner. The application of these provisions could have the effect of delaying
or preventing a change of control of the Company, which could adversely effect
the market price of the Company's Common Stock.
ABSENCE OF DIVIDENDS
The Company has never declared or paid any dividends on the Common Stock
and does not anticipate paying any dividends on the Common Stock in the
foreseeable future.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Stock by the Selling Stockholders, but may receive funds upon the exercise of
stock options pursuant to which the Selling Stockholders will acquire shares of
Common Stock covered by this Prospectus, which funds, if any, will be used by
the Company for working capital.
-10-
<PAGE> 13
SELLING STOCKHOLDERS
The shares of Common Stock covered by this Prospectus are being registered
for reoffers and resales by Selling Stockholders of the Company who may acquire
such shares of Common Stock pursuant to the exercise of stock options granted
under the Plans. The Selling Stockholders named on the following table may
resell all, a portion, or none of the shares of Common Stock that they acquire
pursuant to the exercise of stock options under the Plans.
Key employees deemed to be "affiliates" of the Company who acquire
registered Common Stock under the Plans may be added to the Selling
Stockholders listed below from time to time, either by means of a
post-effective amendment hereto or by use of a prospectus filed pursuant to
Rule 424(c) under the Securities Act. An "affiliate" is defined in Rule 144
under Securities Act as a "person that directly, or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company."
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned by each of the Selling Stockholders
as of March 11, 1997. The address of each Selling Stockholder is c/o APACHE
Medical Systems, Inc., 1650 Tysons Boulevard, McLean, Virginia 22102, except as
otherwise noted.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES SHARES BENEFICIALLY
NAME OF SELLING STOCKHOLDER AND BENEFICIALLY OWNED COVERED BY OWNED AFTER THE
POSITION WITH THE COMPANY (1) THIS PROSPECTUS OFFERING (2)
- --------------------------------------- -------------------- -------------------- ----------------------
NUMBER PERCENTAGE
---------- ----------
<S> <C> <C> <C> <C>
Gerald E. Bisbee, Jr., Ph.D., Chairman
and Chief Executive Officer (3) 551,177 400,177 151,000 2.08%
Robert E. Ciri, President and Chief
Operating Officer (4) 188,413 87,413 101,000 *%
James C. Flounlacker, Vice President,
Client Services (5) 14,237 6,293 7,944 *%
Sherrie L. Jones, Vice President, New
Business Development(6) 40,212 9,963 30,249 *%
Stephen C. Strategos, Former Vice
President, Systems Engineering (7) 11,089 10,489 600 *%
Douglas I. Thompson, Vice President,
Consulting Services (8) 26,224 17,482 8,742 *%
Brion D. Umidi, Vice President,
Finance and Administration, Chief
Financial Officer and Treasurer (9) 71,644 31,644 40,000 *%
Edward J. Connors, Director (10) 10,490 10,490 0 *%
Thomas W. Hodson, Director (11) 10,490 6,993 3,497 *%
Lawrence S. Lewin, Director (12) 10,490 10,490 0 *%
Stephen W. Ritterbush, Ph.D., Former
Director (13) 465,036 10,490 454,546 6.61%
Francis G. Ziegler, Director (14) 203,084 6,993 196,091 2.85%
</TABLE>
-11-
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C>
Jim W. DeYoung, Consultant (15) 22,029 19,931 2,098 *%
Neal L. Patterson, Former Director (16) 194,233 10,490 183,743 2.67%
Richard Whitney, Former Advisor to the
Board (17) 10,490 10,490 0 *%
Gary Gagnon, Former Senior Vice
President, Consultant (18) 17,857 17,657 200 *%
Paul Devine, Consultant (19) 6,994 6,994 0 *%
Judith Hedstrom, Former Vice
President, Business Development (20) 18,064 18,064 0 *%
Charlene Honeycutt, Manger of
Education (21) 3,623 1,958 1,665 *%
Maureen Lauler, Director of
Competitive Analysis (22) 3,698 1,573 2,125 *%
Michael Maudlin, Former Consultant (23) 3,112 3,112 0 *%
Mark S. Modica, Former Director of
Finance and Former Consultant (24) 1,575 1,575 0 *%
James L. Oakes, Former Chief Operating
Officer (25) 32,780 32,780 0 *%
Craig K. Ray, Director of Clinical
Databases (26) 3,497 1,514 1,983 *%
Sean P. Seerey, Eastern Sales
Manager (27) 9,472 2,972 6,500 *%
Other Selling Stockholders (28) 66,842 13,335 53,507 *%
</TABLE>
* Less than 1% of the outstanding Common Stock.
(1) Includes shares of Common Stock subject to options that have not yet
vested and therefore are not exercisable within 60 days of the date
hereof, although such shares of Common Stock are not "beneficially owned"
within the meaning of Section 13(d) of the Exchange Act. Based upon the
Company's records as to options outstanding as of March 11, 1997 and upon
information supplied to the Company by the Selling Stockholders in
January 1997.
(2) Based upon 6,871,353 shares of Common Stock outstanding as of March 10,
1997, plus in the case of each Selling Stockholder assuming that all
shares of Common Stock covered by this prospectus are sold and that no
additional shares are purchased or sold by any Selling Stockholder.
(3) Includes 550,177 shares issuable upon exercise of options.
(4) Includes 187,413 shares issuable upon exercise of options.
(5) Includes 13,987 shares issuable upon exercise of options.
(6) Consists of 40,212 shares issuable upon exercise of options.
(7) Includes 10,489 shares issuable upon exercise of options.
(8) Consists of 26,224 shares issuable upon exercise of options.
-12-
<PAGE> 15
(9) Consists of 71,644 shares issuable upon exercise of options.
(10) Consists of 10,490 shares issuable upon exercise of options.
(11) Consists of 10,490 shares issuable upon exercise of options held by Mr.
Hodson.
(12) Consists of 10,490 shares issuable upon exercise of options.
(13) Includes 10,490 shares issuable upon exercise of options held by Dr.
Ritterbush. Also includes 454,546 shares (17,483 of which are issuable
upon exercise of a vested warrant) owned of record by Fairfax
Partners/The Venture Fund of Washington, L.P. as to which Dr. Ritterbush
disclaims beneficial ownership.
(14) Includes 10,490 shares issuable upon exercise of options held by Mr.
Ziegler. Also includes 192,594 shares (32,207 of which are issuable upon
exercise of vested warrants) owned of record by LHC Corporation as to
which Mr. Ziegler disclaims beneficial ownership.
(15) Consists of 22,029 shares issuable upon exercise of options.
(16) Includes 10,490 shares issuable upon exercise of options held by Mr.
Patterson. Also includes 183,743 shares owned of record by Cerner
Corporation as to which Mr. Patterson disclaims beneficial ownership.
(17) Consists of 10,490 shares issuable upon exercise of options.
(18) Includes 17,657 shares issuable upon exercise of options.
(19) Consists of 6,994 shares issuable upon exercise of options.
(20) Consists of 18,064 shares issuable upon exercise of options.
(21) Includes 3,498 shares issuable upon exercise of options.
(22) Includes 3,498 shares issuable upon exercise of options.
(23) Consists of 3,112 shares issuable upon exercise of options.
(24) Consists of 1,575 shares issuable upon exercise of options.
(25) Consists of 32,780 shares issuable upon exercise of options.
(26) Consists of 3,497 shares issuable upon exercise of options.
(27) Includes 9,372 shares issuable upon exercise of options.
(28) Includes 37 employees who own an aggregate of 5,696 shares and who hold
options to purchase 61,146 shares of Common Stock. For each of these
employees, the number of shares covered by this prospectus is fewer than
1,000.
PLAN OF DISTRIBUTION
Any shares of Common Stock sold pursuant to this Prospectus will be sold
by the Selling Stockholders for their own accounts and they will receive all
proceeds from any such sales. The Company will receive none of the proceeds
from the sale of shares of Common Stock that may be offered hereby but may
receive funds upon the exercise of the stock options pursuant to which the
Selling Stockholders will acquire shares of Common Stock covered by this
Prospectus, which funds, if any, will be used by the Company for working
capital. The Selling Stockholders have not advised the Company of any
specific plans for distribution of the shares of the Common Stock covered by
this Prospectus, but, if and when shares of Common Stock are sold, it is
anticipated that shares of Common Stock will be sold from time to time
primarily in transactions on Nasdaq at the market price then prevailing. Sales
may also be made in negotiated transactions or otherwise, at prices related to
such prevailing market price or otherwise. If shares of Common Stock are sold
through brokers, the Selling Stockholders may pay customary brokerage
commissions and charges. The Selling Stockholders may effect such transactions
by selling
-13-
<PAGE> 16
shares of Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders and/or the purchaser of Common Stock for whom
such broker-dealers may act as agent or to whom they may sell as principal, or
both (which compensation as to a particular broker-dealer might be in excess of
customary commissions). The Selling Stockholders and any broker-dealers that
act in connection with the sale of shares of Common Stock hereunder might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. Shares of
Common Stock covered by this Prospectus may also be sold pursuant to Rule 144
under the Securities Act rather than pursuant to this Prospectus.
In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
LEGAL OPINION
The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Gardner, Carton & Douglas, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedule of the Company as of
December 31, 1995 and 1996 and for each of the three years in the three-year
period ended December 31, 1996, incorporated by reference herein and elsewhere
in the Registration Statement have been incorporated by reference herein and in
the Registration Statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
-14-
<PAGE> 17
APACHE MEDICAL SYSTEMS, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference in to this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission") by the Registrant:
1. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
2. The Company's Current Report on Form 8-K dated February 20, 1997;
and
3. The description of Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated June 4, 1996 filed
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or report filed for
the purpose of updating such description.
In addition, each document filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof, and prior
to the filing of a post-effective amendment which indicates that all securities
offered hereunder have been sold or which deregisters all securities then
remaining unsold under this registration statement, shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents.
<TABLE>
<S> <C>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
</TABLE>
The Company's Amended and Restated Certificate of Incorporation provides
that the Company shall, subject to certain limitations, indemnify its directors
and officers against expenses (including attorneys' fees, judgments, fines and
certain settlements) actually and reasonably incurred by them in connection
with any suit or proceeding to which they are a party so long as they acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to a criminal action or
proceeding, so long as they had no reasonable cause to believe their conduct to
have been unlawful.
Section 102 of the Delaware General Corporation Law ("DGCL") permits a
Delaware corporation to include in its certificate of incorporation a provision
eliminating or limiting a director's liability to a corporation or its
stockholders for monetary damages for breaches of fiduciary duty. DGCL Section
102 provides, however, that liability for breaches of the duty of loyalty, acts
or omissions not in good faith or involving intentional misconduct, or knowing
violation of the law, and the unlawful purchase or redemption of stock or
payment of unlawful dividends or the receipt of improper personal benefits
cannot be eliminated or limited in this manner. The Company's Amended and
Restated Certificate of Incorporation includes a provision that eliminates, to
the fullest extent permitted, director liability for monetary damages for
breaches of fiduciary duty.
II-1
<PAGE> 18
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Certain unregistered securities were issued by the Company pursuant to the
Plans prior to the effective date of this Registration Statement. Such
securities were issued in reliance upon an exemption from registration provided
by Rule 701 promulgated under the Securities Act or by Section 4(2) of the
Securities Act. All such securities were issued to persons who were at such
time employees or consultants of the Company and who were in possession of
sufficient information to make an informed investment decision.
ITEM 8. INDEX TO EXHIBITS.
Exhibit Number Description of Document
-------------- -------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation*
4.2 By-laws*
5.1 Opinion of Gardner, Carton & Douglas regarding
legality of securities
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Gardner, Carton & Douglas (included in
exhibit 5.1)
24.1 Powers of Attorney (included on signature page)
- ---------------
* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (333-4106), initially filed April 26, 1996.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
II-2
<PAGE> 19
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) The Registrant hereby undertakes that, for purposes of determining
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offering herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6 of
this registration statement, or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any section,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of McLean, State of Virginia, on this 21st day of
March 1997.
APACHE MEDICAL SYSTEMS, INC.
By: /s/ Gerald E. Bisbee, Jr., Ph.D.
---------------------------------------
Gerald E. Bisbee, Jr., Ph.D.
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gerald E. Bisbee, Jr., Ph.D., Robert E.
Ciri and Brion D. Umidi, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign, execute and file this Registration Statement and any or
all amendments (including, without limitation, post-effective amendments) to
this Registration Statement, and to file the same, with all exhibits thereto
and all documents required to be filed with respect therewith, with the
Securities and Exchange Commission or any regulatory authority, granting unto
such attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith and about the premises in order to effectuate the same as fully to
all intents and purposes as he might or could do if personally present, hereby
ratifying and confirming all that such attorneys-in-fact and agents or his or
their substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on this 21st day of March 1997.
<TABLE>
<S> <C>
SIGNATURES TITLE
---------------------------------- -------------------------------------
/s/ Gerald E. Bisbee, Jr., Ph.D. Chairman and Chief Executive Officer
----------------------------------
Gerald E. Bisbee, Jr., Ph.D. (Principal Executive Officer)
/s/ Brion D. Umidi Vice President, Finance and Administration, Treasurer and Chief
----------------------------------- Financial Officer (Principal Financial and Accounting Officer)
Brion D. Umidi
/s/ Edward J. Connors Director
-----------------------------------
Edward J. Connors
/s/ Thomas W. Hodson Director
-----------------------------------
Thomas W. Hodson
/s/ William A. Knaus, M.D. Director
-----------------------------------
William A. Knaus, M.D.
/s/ Lawrence S. Lewin Director
-----------------------------------
Lawrence S. Lewin
/s/ Francis G. Ziegler Director
-----------------------------------
Francis G. Ziegler
</TABLE>
S-1
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<S> <C>
Exhibit Number Description of Document
- -------------- ---------------------------------------------------------------------
4.1 Amended and Restated Certificate of Incorporation*
4.2 By-laws*
5.1 Opinion of Gardner, Carton & Douglas regarding legality of securities
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Gardner, Carton & Douglas (included in exhibit 5.1)
24.1 Powers of Attorney (included on signature page)
</TABLE>
- ---------------
* Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (333-4106), initially filed April 26, 1996.
E-1
<PAGE> 1
EXHIBIT 5.1
GARDNER, CARTON & DOUGLAS
321 North Clark Street
Suite 3200
Chicago, Illinois 60610
March 21, 1997
APACHE Medical Systems, Inc.
1650 Tysons Boulevard
McLean, Virginia 22102
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to APACHE Medical Systems, Inc., a Delaware
corporation (the "Corporation"), in connection with the filing of a
Registration Statement on Form S-8 by the Corporation under the Securities Act
of 1933, as amended (the "Registration Statement"). The Registration Statement
registers: (i) 425,841 shares of Common Stock of the Corporation, par value
$.01 per share (the "Common Stock"), reserved for issuance under the
Corporation's Amended and Restated Employee Stock Option Plan (the "Option
Plan"); (ii) 1,270,748 shares of Common Stock reserved for issuance upon the
exercise of currently outstanding options granted under the Option Plan; (iii)
57,500 shares of Common Stock reserved for issuance under the Corporation's
Non-Employee Director Stock Option Plan (the "Director Plan" and together with
the Option Plan, the "Plans") and (iv) 12,500 shares of Common Stock reserved
for issuance upon the exercise of currently outstanding options granted under
the Director Plan. In that capacity, we have reviewed the Amended and
Restated Certificate of Incorporation and By-laws of the Corporation, both as
amended to date, the Registration Statement, the Plans, the originals or copies
of corporate records reflecting the corporate action taken by the Corporation
in connection with the approval of the Plans and the issuance of the Common
Stock under the Plans and such other instruments as we have deemed necessary
for the issuance of this opinion.
Based upon the foregoing, we are of the opinion that the Common Stock to
be offered under the Plans has been duly authorized by all requisite action on
the part of the Corporation and, when issued in accordance with the terms and
conditions of the Plans, will be legally issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required by Section 7 of the Securities
Act of 1933, as amended.
Very truly yours,
Gardner, Carton & Douglas
<PAGE> 1
EXHIBIT 23.1
The Board of Directors
Apache Medical Systems:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Washington, D.C.
March 20, 1997
<PAGE> 2
EXHIBIT 23.1
The Board of Directors
Apache Medical Systems:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Washington, D.C.
March 20, 1997
