As filed with the Securities and Exchange Commission on May 17, 2000.
Registration no. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
Amendment No. 1
Registration Statement
Under the Securities Act of 1933
CYBER-CARE, INC.
(Exact name of Registrant as specified in its charter)
Florida 65-0158479
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
1903 S. Congress Avenue, Suite 400 Linda Moore
Boynton Beach, Florida 33426 1903 S. Congress Avenue, Suite 400
(561) 737-2227 Boynton Beach, Florida 33426
(Address, including zip code, and (561) 737-2227
telephone number, including (Name, address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of agent for service)
1999 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plans)
-----------------
COPY TO:
Thomas C. Pritchard
Brewer & Pritchard, P.C.
Three Riverway, Suite 1800
Houston, Texas 77056
Phone (713) 209-2950
Fax (713) 659-2430
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================== ============ ================= ================ ============
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT BEING OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
- - ---------------------------------- ------------ ----------------- ---------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.0025 per share 6,239 $15.19 $94,770 $25
- - ---------------------------------- ------------ ----------------- ---------------- ------------
TOTAL $25
================================================================================== ============
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
number of shares of the issuer's Common Stock registered hereunder will
be adjusted in the event of stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h), on the basis of the average
high and low prices as reported by the Nasdaq National Market on April
28, 2000.
<PAGE>
EXPLANATORY NOTE
This registration statement was prepared in accordance with Part I of
Form S-8 (in accordance with Instruction C of Form S-8), and is registering
6,239 shares of common stock which have been issued under our 1999 Employee
Stock Purchase Plan. In accordance with the Note to Part I of Form S-8, the
information specified by Part I of Form S-8 has been omitted from this
registration statement.
We will provide without charge to any person, upon written or oral
request of such person, a copy of each document incorporated by reference in
Item 3 of Part II of this registration statement (which documents are
incorporated by reference in the Section 10(a) prospectus as set forth in Form
S-8), the other documents required to be delivered to eligible employees
pursuant to Rule 428(b) under the Securities Act, and additional information
about the Plan. Any and all such requests should be directed to our executive
offices located at 1903 S. Congress Ave., Suite 400, Boynton Beach, Florida
33426, telephone number (561) 737-2227, Attention: Corporate Secretary.
<PAGE>
6,239 SHARES
CYBER-CARE, INC.
COMMON STOCK
-------------------------
This reoffer prospectus relates to 6,239 shares of common stock which
may be sold from time to time by the selling security holders, as provided on
page 18. These shares were issued under our 1999 Employee Stock Option Purchase
Plan. We will not receive any proceeds from any sale of those shares offered by
this prospectus.
Our common stock is quoted on the Nasdaq National Market under the
symbol "CYBR."
Our principal executive offices are located at 1903 S. Congress Ave.,
Suite 400, Boynton Beach, Florida 33426 and our telephone number is (561)
737-2227.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
STARTING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this reoffer prospectus is May __, 2000.
<PAGE>
TABLE OF CONTENTS
Where You Can Find More Information......................................... 1
Incorporation of Documents By Reference..................................... 1
Cyber-Care, Inc............................................................. 3
Risk Factors................................................................ 3
Use of Proceeds.............................................................. 18
Selling Security Holders..................................................... 18
Plan of Distribution......................................................... 19
Legal Matters................................................................ 20
Experts...................................................................... 20
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities............................... 21
Note Regarding Forward Looking Statements.................................... 21
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and
are required to files reports, proxy statements and other information with the
SEC. The reports, proxy statements and other information are available for
inspection and copying at the Public Reference Room of the SEC, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Copies of the material
may be obtained from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, for a fee. The SEC maintains a Web site on
the Internet that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. The address
of the site is http://www.sec.gov. You may access such information by searching
the EDGAR data base on the site.
We have filed a registration statement on Form S-8 with the SEC with
respect to the securities offered by this prospectus. Certain information
contained in the registration statement is omitted from this prospectus. You may
refer to the registration statement, its exhibits and schedules for further
information with respect to the company and the securities offered by this
prospectus. You may obtain copies of the registration statement, its exhibits
and schedules in the above captioned locations.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which we have filed with the SEC, are incorporated
by reference:
1. Our annual report on Form 10-KSB for the fiscal year ended December 31,
1999.
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the document
referred to in (1) above; and
3. The description of the common stock that is contained in a registration
statement or amendment thereto filed under Section 12 of the Exchange
Act, including any amendment or report filed for the purpose of updating
such description
All documents filed by the company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus and before the
termination of the offering covered hereby will be deemed to be incorporated by
reference in this prospectus and to be a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference in this prospectus shall be deemed to be modified
or superceded for purposes of this prospectus to the extent that a statement
contained in this prospectus or any subsequently filed document that also is or
is deemed to be incorporated by reference modifies or replaces such statement.
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Upon the written or oral request, we will provide any of the documents
incorporated by reference in this registration statement. All of such documents
and information will be available without charge. Any and all such requests
should be directed to our executive offices located at 1903 S. Congress Ave.,
Suite 400, Boynton Beach, Florida 33426, telephone number (561) 737-2227,
Attention: Corporate Secretary.
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CYBER-CARE, INC.
We own and are developing an Internet-based solution and interactive
system, Electronic HouseCall System, or EHC System, that provides products and
services to support remote delivery of care, patient monitoring and education to
the United States and worldwide healthcare markets. We also have been in the
business of developing, owning and operating integrated medical delivery
services through our diversified medical technologies, physical, occupational
and speech therapy, sleep apnea, diagnostic and other healthcare services,
institutional and e-commerce pharmacy services and international air ambulance
transport services.
We were incorporated in September 1989 in the State of Florida. In
August 1999, we changed our name to Cyber-Care, Inc. to more accurately reflect
our focus into the medical internet-based technology industry. Our principal
executive offices are located at 1903 S. Congress Ave., Suite 400, Boynton
Beach, Florida 33426 and our telephone number is (561) 737-2227.
RISK FACTORS
The shares of our common stock being offered for resale by the selling
security holders are highly speculative in nature, involve a high degree of risk
and should be purchased only by persons who can afford to lose the entire sum
invested in the common shares. Before purchasing any of the shares of common
stock, you should carefully consider the following factors relating to our
business and prospects. If any of the following risks actually occur, our
business, financial condition or operating results could be materially adversely
affected. In such case, the trading price of our stock could decline, and you
may lose all or part of your investment.
THE HEALTHCARE INDUSTRY IS SUBJECT TO EXTENSIVE LAWS AND REGULATIONS, WHICH
COULD IMPAIR OUR ABILITY TO CONDUCT BUSINESS.
The healthcare industry in general and the medical ancillary service
business in particular is subject to extensive federal, state and local
regulation relating to licensure, conduct of operations, ownership of
facilities, environment rules, pricing and reimbursement policies. Although we
believe that our current operations comply with applicable regulations, we
believe that the healthcare industry will continue to change, requiring us to
modify our agreements and operations from time to time. While we believe that we
will be able to structure our agreements and operations in accordance with
applicable law, there can be no assurance that the subsequent adoption of laws
or interpretations of existing laws will not regulate, restrict or otherwise
adversely affect our business.
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WE HAVE A HISTORY OF LOSSES AND A SUBSTANTIAL ACCUMULATED DEFICIT.
To date we have been unable to generate revenue sufficient to be
profitable on a consistent basis. Consequently, we have sustained substantial
losses. Net losses for the years ended December 31, 1999 and 1998 were
$10,808,451 and $7,380,953, respectively. As of December 31, 1999, we had
working capital of $12,825,611. Accumulated deficits as of December 31, 1999 and
1998 were $38,451,795 and $27,643,344, respectively. There can be no assurance
that we will ever achieve the level of revenues needed to be profitable in the
future or, if profitability is achieved that it will be sustained.
WE INTEND TO ACQUIRE VARIOUS COMPANIES, WHICH WILL SUBJECT US TO ALL OF THE
RISKS ASSOCIATED WITH A GROWING COMPANY.
We intend to grow through acquiring and developing e-commerce
businesses. There can be no assurance that suitable acquisitions will be
available or that acquisitions can be negotiated on acceptable terms, or that
the operations of acquired businesses can be integrated effectively into our
operations. Competition for suitable acquisition candidates is expected to be
intense and many of our competitors will have greater resources than we have.
Our failure to implement our acquisition strategy could have a material adverse
effect on our financial performance and, moreover, the attendant risks of
expansion could also have a material adverse effect on our business.
One of our recent acquisitions, Cybercare, Inc., ("Cybercare") is in the
research and development stage, had losses in prior years, will continue to have
losses in 2000 and will require a significant amount of capital to bring its
products and services to market. There can be no assurance that this company
will be profitable in the future or that it can be successfully integrated into
our operations. Our growth strategy will result in significant additional
demands on our infrastructure, and will place a significant strain on our
management, administrative, operational, financial and technical resources, and
increased demands on our systems and controls. Additional capital may be needed
and there can be no assurance that we will be able to obtain sufficient
resources to support Cybercare and future acquisitions and growth. The inability
to continue to upgrade the operating and financial control systems, the
emergence of unexpected expansion difficulties or failure to manage our proposed
expansion properly could have a material adverse effect on our business,
financial condition and results of operations. The laws and regulations
applicable to financial arrangements in the healthcare industry are complex and
may be subject to varying interpretations.
WE MAY NOT BE ABLE TO PROTECT OUR PATENTS AND PROPRIETARY TECHNOLOGY, WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Our ability to compete effectively in the medical e-commerce industry
will depend on our success in developing and marketing our products and services
and/or acquiring other suitable medical e-commerce businesses and protecting
their proprietary technology, both in the United
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States and abroad. The patent positions of medical technology companies
generally involve complex legal and factual questions. We currently have an
exclusive license for one patent issued and one pending with regard to our
e-commerce technology. We intend to file for additional patents under our
license agreement on products for which we feel the cost of obtaining a patent
is economically reasonable in relation to the expected protection obtained and
its economic benefit. There can be no assurances that any patent that we apply
for will be issued, or that any patents issued will not be challenged,
invalidated, or circumvented, or that the rights granted thereunder will provide
any competitive advantage. We may incur substantial costs in defending any
patent or license infringement suits or in asserting any patent or license
rights, including those granted by third parties, the expenditure of which we
might not be able to afford.
Although we have and will continue to enter into confidentiality and
invention agreements with our employees and consultants, there can be no
assurance that such agreements will be honored or that we will be able to
adequately protect our rights to our non-patented trade secrets and know-how.
Moreover, there can be no assurance that other individuals or entities will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets and know-how. In
addition, we may be required to obtain licenses to patents or other proprietary
rights from third parties. There can be no assurance that any licenses required
under any patents or proprietary rights would be made available on acceptable
terms, if at all. If we do not obtain required licenses, we could encounter
delays in product development or find that the development, manufacture, or sale
of products requiring such licenses could be foreclosed. Additionally, we may,
from time to time, support or otherwise collaborate in research conducted by
universities and governmental research organizations. There can be no assurance
that we will have or be able to acquire exclusive rights to the inventions or
technical information derived from such collaborations or that disputes will not
arise with respect to rights in derivative or related research programs
conducted by us or such collaborators.
WE CANNOT GUARANTEE YOU THAT OUR PRODUCTS WILL BE FULLY DEVELOPED OR ACCEPTED BY
THE MARKETS.
Due to the early-stage development of our e-commerce products and
services, no assurance can be given that these products or services can be
developed into commercial products, manufactured on a large scale or be
economical to market. Nor can there be any assurance that these products or
services will achieve or sustain market acceptance. There is, therefore,
substantial risk that our product and service development and commercialization
efforts will not prove to be successful.
There can be no assurance that physicians, medical providers or the
medical community in general will accept and utilize our products and services.
The extent that, and rate of which, these products achieve market acceptance and
penetration will depend on many variables including, but not limited to, a
timely penetration of the market, the establishment and
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demonstration in the medical community of the clinical safety, efficacy and
cost-effectiveness of these products and services, the advantage of these
products over existing technology, third-party reimbursements practices and our
manufacturing, quality control, marketing and sales efforts. There can be no
assurance that the medical community and third-party payors will accept our
technology or services. Similar risks will confront any other products and
services we develop in the future. Failure of our products and services to gain
market acceptance would have a material adverse effect on our business,
financial condition, and results of operations.
OUR LIMITED MARKETING AND SALES RESOURCES COULD PREVENT US FROM EFFECTIVELY
MARKETING OUR PRODUCTS AND SERVICES.
We have limited internal marketing and sales resources and personnel. In
order to market any products and services we may develop, we will have to
develop a marketing and sales force with technical expertise and distribution
capability (or outsource such duties to independent contractors). There can be
no assurance that we will be able to establish sales and distribution
capabilities or that we will be successful in gaining market acceptance for any
products or services we may develop. There can be no assurance that we will be
able to recruit and retain skilled sales, marketing, service or support
personnel, that agreements with distributors will be available on terms
commercially reasonable to us, or at all, or that our marketing and sales
efforts will be successful. Failure to successfully establish a marketing and
sales organization, whether directly or through third parties, would have a
material adverse effect on our business, financial condition, cash flows, and
results of operations. To the extent that we arrange with third parties to
market our products or services, the success of such products and services may
depend on the efforts of such third parties. There can be no assurance that any
of our proposed marketing schedules or plans can or will be met.
THE NATURE OF OUR BUSINESS EXPOSES US TO PROFESSIONAL AND PRODUCT LIABILITY
CLAIMS, WHICH COULD MATERIALLY ADVERSELY IMPACT OUR OPERATIONS.
Our business and e-commerce technology exposes us to potential
professional and product liability risks, which are inherent in such businesses
and products. There can be no assurance that we will not be subjected to future
claims and potential liability. While we plan to maintain insurance against
professional and product liability and defense costs, there can be no assurance
that claims against us arising with respect to our products or services will be
successfully defended or that the insurance to be carried by us will be
sufficient to cover liabilities arising from such claims. A successful claim
against us in excess of our insurance coverage could have a material adverse
effect on us. Furthermore, there can be no assurance that we will be able to
continue to obtain or maintain liability insurance on acceptable terms.
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THE LOSS OF CERTAIN MEMBERS OF OUR MANAGEMENT TEAM COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS.
We will be dependent to a significant extent on the continued efforts
and abilities of our Chairman, Michael Morrell, and other key employees.
Notwithstanding our ownership of a one million dollar key-man life insurance
policy on each of Mr. Morrell and our President, Mr. Paul C. Pershes, if we were
to lose the services of either individual or other key employees before a
qualified replacement could be obtained, our business could be materially
adversely affected.
THE HEALTHCARE INDUSTRY IS HIGHLY COMPETITIVE AND WE MAY NOT BE ABLE TO
EFFECTIVELY COMPETE.
The healthcare industry in general and the market for medical services
and equipment in particular, are highly competitive. We compete with companies
that are larger in size and have access to considerably greater financial
resources than we have. We compete by providing more personalized care to the
patients they serve, as well as providing patient transportation and
pharmaceutical delivery.
Key differentiators between Cybercare and its competitors lie primarily
in the network architecture Cybercare is planning to build to serve this market.
Unlike our known competitors, Cybercare is unique in the automatic collection,
transmission, and logging of vital signs measurements to a central database
where the information can be viewed by a caregiver on a real-time basis or
whenever necessary. Known competitive systems require the manual entry of
information. We have patented TCP/IP protocols for the transmission of medical
data in a two-way interactive voice and video session between patients and
caregivers.
In our sleep lab business segment, there are no clear market leaders or
major competition. Most of our competitors are either labs in hospitals or
independent physicians interested in sleep that have started labs as an adjunct
to their local practice.
Our air ambulance business has numerous smaller competitors with
short-range aircraft, but has limited competitors with aircraft capability of
performing international and, in particular, trans-Atlantic flights. Medjet in
Alabama, Kalitta in Detroit and Sky Service in Toronto are the biggest
competitors in the international market.
In our rehabilitation business, there are numerous competitors larger in
size than we are and which have access to considerably greater financial
resources than we have.
Our pharmaceutical business competes directly in the sale and delivery
of prescription drugs to individuals living in adult living facilities. There
are numerous competitors larger in size which have access to considerably
greater financial resources. We rely primarily on
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reputation and service to market our services. Our inability to compete with our
competitors could have a material adverse effect on our business.
SUBSTANTIALLY ALL OF OUR SHARES ARE ELIGIBLE FOR RESALE, WHICH MAY HAVE A
DEPRESSIVE EFFECT ON THE MARKET AND DECREASE THE CURRENT MARKET PRICE.
As of April 1, 2000, we have 57,799,176 shares of our common stock
outstanding, of which substantially all can be sold under an effective
registration statement or under Rule 144. Under Rule 144, a person who has held
restricted securities for a period of one year may sell a limited number of
shares to the public in ordinary brokerage transactions. Sales under Rule 144
may have a depressive effect on the market price of our common stock due to the
potential increased number of publicly held securities. The timing and amount of
sales of common stock that are currently eligible to be resold pursuant to Rule
144 or pursuant to this registration statement could have a depressive effect on
the future market price of our common stock.
THERE IS ONLY A VOLATILE LIMITED MARKET FOR OUR COMMON STOCK.
Recent history relating to the market prices of public companies
indicates that, from time to time, there may be significant volatility in the
market price of our securities because of factors unrelated, as well as related,
to our operating performance. Factors such as announcements of new services to
be provided by us or our competitors, government regulatory action, and market
conditions for e-commerce company stocks in general could have a significant
impact on the future market price of our common stock.
WE ARE SUBJECT TO A SIGNIFICANT NUMBER OF HEALTHCARE INDUSTRY REGULATIONS AND
RELATED REGULATIONS, WHICH, IF WE FAIL TO COMPLY WITH THEM, COULD MATERIALLY
ADVERSELY AFFECT OUR OPERATIONS.
We are subject to substantial potential liability resulting from a
variety of possible causes, including breach of numerous healthcare laws,
malpractice and product liability. While we currently are not a party to any
regulatory action or material litigation, if any actions or lawsuits in the
future are brought against us, such actions or lawsuits may have a materially
adverse effect on us even if such lawsuits are without merit. We attempt to
minimize our potential liability through adherence to compliance procedures,
effective case supervision and personnel recruitment procedures. We also carry a
variety of insurance policies including policies insuring against certain
negligent acts. There can be no assurance, however, that such insurance policies
will adequately cover our losses resulting from liability, or that we will
continue to qualify for, or be able to afford or obtain, insurance in the
future. We currently maintain general and professional liability insurance for
our operations in the single limit amount and aggregate annual limit amount of
$60,000,000. There is no assurance that any potential claims will or will not
exceed this limit.
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Our air ambulance transport business is subject to significant federal
and international government regulations relating to airline safety, capital
requirements, licensing, maintenance, scheduling, and similar aspects of our
operations. Due to the nature of aircraft operations, applicable regulations and
our policy, we incur substantial expenses associated with the maintenance of our
aircraft fleet. Although we believe that our current operations comply with
applicable regulations, there can be no assurance that the subsequent adoption
of laws or interpretations of existing laws will not regulate, restrict or
otherwise adversely affect our business.
Our physical rehabilitation and sleep therapy business are subject to
extensive federal and state regulations related to fee limitations, quality
control requirements and accounting and cost tracking requirements. These
operations are subject to periodic review and inspection of facilities, patient
records and billing policies which, if the applicable regulatory agency finds
deficiencies, may result in reduction or stoppage of reimbursements and/or fines
and penalties. Additionally, these operations are subject to severe restrictions
relative to referrals from and compensation to physicians as provided by the
Federal Stark rules and Florida Self-Referral rules. Violations of any of these
rules can result in penalties and fines and in some cases, criminal sanctions.
See discussion regarding Federal Anti-Kickback Laws and Florida and Federal
Self-Referral Laws.
Our pharmacy business is also subject to extensive federal and state
regulations, many of which are specific to pharmacies and the sale of
over-the-counter drugs. Regulations in this area often require subjective
interpretation, and we cannot be certain that our attempts to comply with these
regulations will be deemed sufficient by the appropriate regulatory agencies.
Violations of any of these regulations could result in various civil and
criminal penalties, including suspension or revocation of our licenses or
registrations, seizure of our inventory, or monetary fines, which could
adversely affect our operations.
The Health Insurance Portability and Accountability Act of 1996 mandates
the use of standard transactions, standard identifiers, security and other
provisions by the year 2000. Regulations have been proposed to implement these
requirements, and we are designing our applications to comply with the proposed
regulations. However, until these regulations become final, possible changes in
these regulations could cause us to use additional resources and lead to delays
as we revise our operations.
We believe that Cybercare's Internet products will be subject to
regulation by the Food and Drug Administration. We have filed for 510-K approval
by the Food and Drug Administration. Since we use vital signs measuring devices
which are already approved by the FDA, we believe that obtaining this approval
for our products will be accomplished within 90-120 days from the time
application was made in January 2000. Complying with FDA regulations is time
consuming, burdensome and expensive, and we could be delayed or prevented from
introducing our Internet products and services which would have a material
adverse affect on our business in the U.S.
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WE RECENTLY ACQUIRED CYBERCARE AND ARE SUBJECT TO SUBSTANTIAL RISK RELATING TO
THE INTEGRATION OF CYBERCARE'S BUSINESS AND OPERATIONS WITH OURS.
The continuing successful operation of the businesses acquired in the
Cybercare acquisition is largely dependent upon the retention of the key
management personnel of Cybercare. Because the business acquired represents a
diversification of our business, functionally and geographically, the loss of
any of the key management personnel from Cybercare could have an adverse effect
on our business and upon the realization of the benefits anticipated from the
Cybercare acquisition.
In determining that the Cybercare acquisition was in our best interests,
the Board of Directors assumed the continuation of the business of Cybercare,
and that such business can be assimilated into our operations with relative
ease. Under the terms of the employment agreement with Mr. Haines, the CEO of
Cybercare he will continue his management of the acquired operations in a
largely autonomous manner and with minimal direct oversight by our Board of
Directors and executive officers. The employment agreement is intended to
provide consistent management of the acquired operations; however, the
difficulties of assimilation may be increased by the necessity of coordinating
geographically separated organizations, integrating personnel with disparate
business backgrounds and combining different corporate cultures. The process of
combining the acquired businesses may cause an interruption of, or a loss of
momentum in, our business, which could have an adverse effect on the revenues
and operating results of the combined companies. There is no assurance that we
will be able to retain all key management and other operating personnel or that
we will realize any of the other anticipated benefits of the Cybercare
acquisition.
WE DEPEND ON REIMBURSEMENT FROM THIRD PARTIES FOR A SUBSTANTIAL PORTION OF OUR
REVENUE.
A substantial amount of our services are purchased by patients, managed
care organizations and medical facilities which provide healthcare services to
their patients. Such organizations, facilities or patients typically bill or
seek reimbursement from various third-party payors such as Medicare, Medicaid,
other governmental programs and private insurance carriers for the charges
associated with the provided healthcare services. We believe that our market
success will largely depend upon obtaining favorable contracts and receiving
timely reimbursement for our products and services from such programs and
carriers.
IF WE DO NOT RECEIVE, AND CONTINUE TO RECEIVE, REFERRALS FROM PHYSICIANS AND
OTHER MEDICAL PROVIDERS, OUR BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED.
A significant portion of our business depends upon, among other things,
the efforts and success of the physicians, medical providers and others who
refer patients and provide services to our businesses and the strength of our
relationships with such physicians and other individuals and entities. Our
business, financial condition and results of operations could be adversely
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affected by the failure of these physicians, medical providers and others to
refer patients, maintain the quality of medical care or otherwise adhere to
required professional guidelines.
Our rehabilitation, and physical therapy business is dependent upon
revenues received as a result of referrals made by physicians. We market each of
the services in various methods, including customer and physician referrals,
reputation in the community and third parties. We rely upon community
reputation, customer referral, physician and other medical resource referrals.
In addition, we have in place a service system that enters local communities and
utilizes a screening program. We also staff exhibit booths at major
industry-specific conventions to attract hospital groups, insurance companies,
assistance companies and managed care organizations. We rely heavily on
referrals to perform high-tech procedures. There can be no guarantee that any
physician will choose to refer patients to us. In addition, physicians
affiliated with us may not, under certain circumstances, refer patients. In the
event that, for any reason, physicians do not use the ancillary medical service
businesses operated by us, such loss of patients could have a material adverse
effect on our business, financial condition and results of operation.
Furthermore, it is possible that third-party payors may refuse to approve
referrals to ancillary medical care facilities owned by us, but rather require
that such referrals be made to other facilities. Such a requirement could have a
material adverse effect on our business, financial condition and results of
operations. Further, our physical rehabilitation companies derive a significant
portion of their revenue from Medicare patients. Recent adjustments to
Medicare's allowances with respect to rehabilitation services have significantly
limited the amount of revenues that we may derive from services rendered to
Medicare patients. There is no assurance that future changes to Medicare's
reimbursement policy will not have a significant adverse effect on revenues
derived from these sources.
WE MAY BE SUBJECT TO SUBSTANTIAL PENALTIES WHICH COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS IF WE FAIL TO COMPLY WITH THE FEDERAL ANTI-KICKBACK LAW
WHICH IS VERY BROAD AND DIFFICULT TO INTERPRET.
The Federal Anti-Kickback Law, as provided in 42 USC ss.1320a-7b,
prohibits anyone from knowingly and willfully offering, paying, soliciting or
receiving any remuneration in return for the referral of patients or other
business that is paid for in whole or in part by a federal healthcare program
including the Medicare and Medicaid programs, or in return for inducing a person
to recommend purchasing, leasing or ordering items or services that are paid
for, in whole or in part, by a federal healthcare program. The Anti-Kickback Law
is very broad in scope and its provisions are not well defined by existing case
law or regulation. Violations of the Anti-Kickback Law may result in substantial
civil, criminal and/or administrative penalties under Federal and/or state law
for individuals or entities. A violation of the Anti-Kickback Law is a felony
punishable by a fine of up to $25,000 or imprisonment for up to five years, or
both. A violation may also result in civil monetary penalties of up to $10,000
for each violation, plus three times the amount claimed, and exclusion from
participation in the federal healthcare programs, including Medicare and
Medicaid, as well as serve as the basis for a claim under the United States
False Claims Act. Exclusion from participation in the federal healthcare
programs
11
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as well as the other sanctions available under federal and state law,
if applied to us, would result in significant loss of reimbursement and would
have a material adverse effect on us.
The United States Department of Health and Human Services Office of the
Inspector General ("OIG"), the federal agency with primary responsibility for
enforcing the Anti-Kickback Law, has issued regulations that define
relationships that are immune from prosecution under the Anti-Kickback Law (the
"Safe Harbor" regulations). Each Safe Harbor includes a series of standards, all
of which must be satisfied for a business or compensation arrangement to benefit
from the protection offered by a specific Safe Harbor.
Two of the Safe Harbors address investment interests held by parties who
are in a position to refer patients or other business (1) in entities whose
securities are publicly traded that have more than $50,000,000 in undepreciated
net tangible assets, and (2) in those entities in which (a) no more than 40% of
the value of the investment interests of each class of investors may be held by
investors in a position to make referrals; (b) the terms of an investment
interest offered to a passive investor in a position to make referrals must be
no different than those offered to other passive investors; (c) the terms of an
investment interest offer to an investor in a position to make referrals or
generate business must not be based on the volume or value generated from the
investor to the entity; (d) there is no requirement that a passive investor make
referrals or generate business for the entity as a condition to remaining as an
investor; (e) the entity's services or items must not be marketed to passive
investors differently than non-investors; (f) no more than 40% of the entity's
gross revenue may come from referrals or business generated by investors; (g)
the entity must not loan or guarantee funds to an investor in a position to make
referrals if used to obtain the investment interest; and (h) the amount of
return to the investor must be directly proportional to the amount of capital
investment. We believe an investment interest in us will currently satisfy the
standards of this second Safe Harbor.
Other Safe Harbors address the structuring of employment and personal
services agreements. The employment safe harbor protects amounts paid by an
employer to an employee who has a bona fide employment relationship with such
employer, for the employment in the provision of items or services covered by a
federal healthcare program. In order to be protected under the personal services
safe harbor, independent contractor relationships, like our medical director
agreements, must satisfy certain standards. These standards include the
requirement that the aggregate compensation over the term of the arrangement
must be consistent with the fair market value of the services being rendered and
not determined in a manner that takes into account the volume or value of
patient referrals or other business between the parties that is paid for, in
whole or in part, by a federal healthcare program. We believe that we currently
meet the requirements of both of these Safe Harbors.
Notwithstanding our belief that it currently satisfies the investment
interest, employee and personal services Safe Harbors to the Anti-Kickback Law,
no assurance can be given that a federal agency charged with enforcement and/or
interpreting the Anti-Kickback Law, or a private party, will not successfully
assert a contrary position, or that future federal statutes, regulations,
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administrative interpretations and/or judicial decisions would cause an
investor's referral to be prohibited, or result in the imposition of penalties
on us or investors. Even the assertion of a violation could have a material
adverse effect upon the financial condition and results of our operation.
Further, in addition to complying with the Anti-Kickback Law, physician
investors must also comply with both federal and Florida laws governing
physician self-referrals discussed below.
The OIG has adopted a procedure whereby it will provide guidance (an
"Advisory Opinion") as to whether a party's participation in a particular
business or compensation arrangement would be viewed as violating the
Anti-Kickback Law. An Advisory Opinion is available to the participants in a
business or compensation arrangement who are willing to disclose certain
information to the OIG. An Advisory Opinion may be relied on only by the
requesting party and is binding on the OIG only with respect to that
transaction; provided, if the OIG later determines the requestor failed to
disclose material information, the OIG will no longer be bound. A prospective
investor should be aware that we do not intend to seek an Advisory Opinion
regarding our compliance with the Anti-Kickback Law from the OIG.
WE MAY ALSO BE SUBJECT TO PENALTIES WHICH COULD MATERIALLY ADVERSELY AFFECT OUR
BUSINESS IF WE FAIL TO COMPLY WITH THE FLORIDA AND FEDERAL SELF-REFERRAL LAWS.
Florida's prohibition on self-referrals prohibits healthcare providers
from referring patients, regardless of payment source (not just Medicare and
Medicaid beneficiaries), for the provision of certain designated health services
("Florida Designated Health Services") to an entity in which the healthcare
provider is an investor or has an investment interest. Under the Self-Referral
Act, Florida Designated Health Services are defined as clinical laboratory,
physical therapy, comprehensive rehabilitative, diagnostic-imaging and radiation
therapy services. We plan to purchase and currently operate facilities that
provide some or all of these Florida Designated Health Services. All healthcare
products and services not considered Florida Designated Health Services are
classified as "other health services." The Self-Referral Act also prohibits the
referral by a physician of a patient for "other health services" to an entity in
which that physician is an investor, unless (1) the physician's investment
interest is in the registered securities of a publicly traded corporation whose
shares are traded on a national exchange or over-the-counter market and which
has net equity at the end of its most recent fiscal quarter in excess of
$50,000,000; or (2) the physician's investment interest is in an entity whereby
(a) no more than 50% of the value of the investment interests in the entity may
be held by investors who are in a position to make referrals to the entity; (b)
the terms under which an investment interest is offered must be the same for
referring investors and non-referring investors; (c) the terms under which an
investment interest is offered may not be related to the investor's volume of
referrals to the entity; and (d) the investor must not be required to make
referrals or be in the position to make referrals to the entity as a condition
for becoming or remaining an investor.
Entities that meet either exception must also (1) not lend, or guarantee
a loan, to an investor who is in a position to make referrals if the investor
uses any part of that loan to obtain
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the investment interest, and (2) distribute profits and losses to investors in a
manner that is directly proportional to their capital investment.
The Self-Referral Act excludes from the definition of "referral" certain
services provided by specific healthcare providers such as referrals by a
cardiologist for cardiac catheterization services. We believe that physician
investors that are cardiologists may refer patients to it for cardiac
catheterization services because of this provision. There are, however, no
assurances that the definition of what constitutes a referral will remain in
place.
The definition of referral also excludes services by a healthcare
provider who is a sole provider or member of a group practice that are provided
solely for the referring healthcare provider's or group practice's own patients.
Physician investors cannot refer to us for Florida Designated Health Services
based upon this exception under the Self-Referral Act because we do not provide
Florida Designated Health Services solely for the referring physician's or his
or her group practice's own patients. So long as physician investors do not
refer to us for Florida Designated Health Services, we believe we will be in
compliance with the Self-Referral Act. Although we will have mechanisms in place
to monitor referrals from physician investors, it is the responsibility of the
physician investors to comply with the Self-Referral Act and there can be no
assurances that physician investors will comply with such law. Violations
thereof could adversely affect us, as well as result in regulatory action
against us.
The Self-Referral Act also imposes certain disclosure obligations on us
and physician investors that are referring physicians. Under the Self-Referral
Act, a physician may not refer a patient to an entity in which he or she is an
investor, even for services that are not Florida Designated Health Services,
unless, before doing so, the patient is given a written statement disclosing,
among other things, the physician's investment interest in the entity to which
the referral is made. The Self-Referral Act also imposes disclosure obligations
on the entities to which physician investors refer patients. Appropriate
disclosures will be required for physician investors. It is the responsibility
of any referring physician investor to comply with such statutes, regulations
and professional standards. However, this law may discourage certain physician
investors from making referrals to us or encourage patients to choose
alternative healthcare providers. In addition, the violation thereof could
adversely affect us, as well as result in regulatory action against us.
The Federal statute relating to self-referrals, 42 USC ss.1395,
otherwise known as the "Stark Law," restricts the ability of a physician to
refer patients for the furnishing of certain designated health services
("Designated Health Services") to healthcare entities when the physician (or
immediate family member) has a financial relationship, directly or indirectly,
with the entity receiving the referral. Moreover, the entity may not present or
cause to be presented a claim or bill for the Designated Health Services, either
to the Medicare or Medicaid programs or any other individual or third-party
payor. The financial relationship may be either an investment interest (either
equity or debt) or a compensation arrangement. Designated Health Services for
purposes of the Stark Law include: (1) clinical laboratory services, (2)
physical therapy services,
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(3) occupational therapy services, (4) radiology services, including magnetic
resonance imaging, computerized axial tomography scans, and ultrasound services,
(5) radiation therapy services and supplies, (6) durable medical equipment and
supplies, (7) parenteral and enteral nutrients, equipment, and supplies, (8)
prosthetics, orthotics, and prosthetic devices and supplies, (9) home health
services, (10) outpatient prescription drugs, and (11) inpatient and outpatient
hospital services.
There are exceptions to the Stark Law that apply (1) to both ownership
or investment interests and compensation arrangements, (2) only to ownership or
investment interests, or (3) only to compensation arrangements. Our current
structure will not meet any of the exceptions to permit a physician investor's
referral for Designated Health Services. Therefore, physician investors cannot
refer to us for Designated Health Services. Although we will have mechanisms in
place to monitor referrals from physician investors, it is the responsibility of
physician investors to comply with the Stark Law and no assurance can be given
that physician investors will comply with such law.
Two of the exceptions that protect only compensation arrangements are
for employees and personal services and their requirements are similar to the
Safe Harbor requirements discussed above. However, unlike the Safe Harbors to
the Anti-Kickback Law, the exceptions to the Stark Law must be complied with
fully. We believe we currently meet the requirements of both of these
exceptions.
Notwithstanding our belief that we currently are in compliance with the
Stark Laws, no assurance can be given that a federal agency charged with
enforcement and/or interpreting the Stark Law, or a private party, might not
successfully assert a contrary position, or that future federal statutes,
regulations, administrative interpretations and/or judicial decisions would
cause an investor's referral to be prohibited, or result in the imposition of
penalties on us or investors. Even the assertion of a violation could have a
material adverse effect upon our financial condition and results of the
operation.
Violations of the Florida and Federal self-referral laws may result in
substantial civil penalties and administrative sanctions for individuals or
entities, including exclusion from participation in the Medicare and Medicaid
programs, as well as the suspension or revocation of a physician's license to
practice medicine and surgery in Florida. Such sanctions, if applied to us or
any of our physician investors, would result in significant loss of
reimbursement and could have a material adverse effect on us.
An Advisory Opinion procedure similar to that discussed above and the
Declaratory Statement procedure also are available for parties seeking guidance
as to whether a specific transaction violates the Stark Law or the Self-Referral
Act, as the case may be. Potential investors should be aware that we do not
intend to seek the guidance available under either of these procedures.
15
<PAGE>
FAILURE TO PROPERLY SUBMIT CLAIMS FOR REIMBURSEMENT COULD ADVERSELY
AFFECT OUR FINANCIAL CONDITION. We are subject to numerous state and federal
laws that govern the submission of claims for reimbursement to third-party
payors, including state and federal healthcare programs (e.g., Medicare and
Medicaid). These laws generally prohibit an individual or entity from presenting
a claim (or causing a claim to be presented) for payment by Medicare, Medicaid
or any other third-party payor that is false or fraudulent. The penalties
available for violations of these statutes include substantial civil and
criminal fines, imprisonment, exclusion from the federal healthcare programs and
licensure revocation.
One of the most prominent of these laws is the Federal False Claims Act,
which may be enforced by the federal government directly, or by a qui tam
plaintiff on the government's behalf. Under the False Claims Act, both the
government and the private plaintiff, if successful, are permitted to recover
substantial monetary penalties, as well as an amount equal to three times actual
damages. The State of Florida has a similar statute that governs claims made to
it. In recent cases, some qui tam plaintiffs have taken the position that
violations of the Anti-Kickback Law and the Stark Law should also be prosecuted
as violations of the Federal False Claims Act. We believe that we have
procedures in place to ensure the accurate completion of claim forms and
requests for payment.
NEW LEGISLATIVE DEVELOPMENTS COULD RESULT IN FINANCIAL HARDSHIP. In
addition, proposed legislation regarding healthcare reform has been introduced
before many state legislatures. Any such reforms at the federal or state level
could significantly alter patient-provider relationships. State and federal
agency rule-making addressing these issues is also expected. No predictions can
be made as to whether future healthcare reform legislation, similar legislation
or rule-making will be enacted or, if enacted, its effect on us. Any federal or
state legislation prohibiting investment interests in, or contracting with, us
by physicians or healthcare providers for which there is no statutory exception
or safe harbor would have a material adverse effect on our business, financial
condition and results of operations.
WE MAY NOT BE UNDER MANAGED CARE CONTRACTS. There can be no assurance
that we will be able to obtain managed care contracts. Our future inability to
obtain managed care contracts in our markets could have a material adverse
effect on our business, financial condition or results of operations. In
addition, federal and state legislative proposals have been introduced that
could substantially increase the number of Medicare and Medicaid recipients
enrolled in HMOs and other managed care plans. We currently derive a substantial
portion of our current revenue from Medicare and Medicaid. If such proposals are
adopted, we may be unable to obtain contracts from HMOs and other managed care
plans serving Medicare and Medicaid enrollees. Failure to obtain such contracts
could have a material adverse effect on our business, financial condition and
results of operations.
REGULATORY LIMITATION ON FEE-SPLITTING AND THE CORPORATE PRACTICE OF
MEDICINE COULD AFFECT OUR OPERATIONS. The laws of many states prohibit
physicians from splitting fees with non-physicians (or other physicians) and
prohibit non-physician entities from practicing medicine.
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These laws vary from state to state and are enforced by the courts and by
regulatory authorities with broad discretion. Our business operations have not
been the subject of judicial or regulatory interpretation; thus, there can be no
assurance that review of our business by courts or regulatory authorities will
not result in determinations that could adversely affect our operations or that
the healthcare regulatory environment will not change so as to restrict our
existing operations or their expansion. In addition, the regulatory framework of
certain jurisdictions may limit our expansion into such jurisdictions if we are
unable to modify our operational structure to conform with such regulatory
framework.
A determination in any state that we are engaged in the corporate
practice of medicine or any unlawful fee-splitting arrangement could render any
management agreement between us and a practice located in such state
unenforceable or subject to modification, which could have a material adverse
effect on us. Regulatory authorities or other parties may assert that we are or
a practice is engaged in the corporate practice of medicine in such states or
that the management fees paid to us by the managed practices constitute unlawful
fee-splitting or the corporate practice of medicine. If such a claim were
asserted successfully, we could be subject to civil and criminal penalties,
managed physicians could have restrictions imposed upon their licenses to
practice medicine, and we or the managed practices could be required to
restructure their contractual arrangements. Such results or the inability of us
or the managed practices to restructure our relationships to comply with such
prohibitions could have a material adverse effect on our financial condition and
results of operations.
CHANGES IN PAYMENT FOR MEDICAL SERVICES COULD HARM OUR BUSINESS. We
believe that trends in cost containment in the healthcare industry will continue
to result in a reduction in per-patient revenues. The federal government has
implemented, through the Medicare program, the RBRVS payment methodology for
physician services. The RBRVS is a fee schedule that, except for certain
geographical and other adjustments, pays similarly situated physicians the same
amount for the same services. The RBRVS is adjusted each year and is subject to
increases or decreases at the discretion of Congress. To date, the
implementation of RBRVS has reduced payment rates for certain procedures
historically performed by our physicians. There can be no assurance that any
reduced operating margins could be recouped by us through cost reductions,
increased volume, introduction of additional procedures or otherwise. Rates paid
by non-governmental insurers, including those that provide Medicare supplemental
insurance, are based on established physician, ambulatory surgery center and
hospital charges, and are generally higher than Medicare payment rates. A change
in the makeup of the patient mix of our practices as well as the medical
practices under our management that results in a decrease in patients covered by
private insurance or a shift by private payors to RBRVS or similar payment
structures could adversely affect our business, financial condition or results
of operations.
PATIENT BROKERING ACT. Florida also has a criminal prohibition regarding
the offering, soliciting, or receiving of remuneration, directly or indirectly,
in cash or in kind, in exchange for the referral of patients (the "Patient
Brokering Act"). One of the exceptions to this prohibition is
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for business and compensation arrangements that do not violate the Anti-Kickback
Law. Accordingly, so long as we are in compliance with the Anti-Kickback Law,
then we will be in compliance with the Patient Brokering Act.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares which may be
sold pursuant to this reoffer prospectus for the respective accounts of the
selling security holders. All such proceeds, net of brokerage commissions, if
any, will be received by the selling security holders. See "Selling Security
Holders" and "Plan of Distribution."
SELLING SECURITY HOLDERS
This prospectus relates to 6,239 shares of our common stock issued in
the aggregate to the selling security holders, of which 5,557 shares are owned
by certain unnamed non-affiliates and 682 are held by an executive officer.
The following table sets forth information with respect to the
beneficial ownership of the selling security holder who is an executive officer
based upon our corporate records as of April 1, 2000. Beneficial ownership is
determined in accordance with the rules of the Commission, is based upon
57,799,176 shares outstanding as of April 1, 2000, and generally includes voting
or investment power with respect to securities. Shares of common stock options
or warrants that are currently exercisable or exercisable within 60 days of May
1, 2000 are deemed to be outstanding and to be beneficially owned by the person
holding such options for the purpose of computing the percentage ownership of
such person.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OWNED NUMBER OF NUMBER OF PERCENTAGE OF
PRIOR TO SHARES OFFERED SHARES OWNED SHARES OWNED
NAME AND POSITION OFFERING HEREBY AFTER OFFERING AFTER OFFERING
- - -------------------- ------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Kobrin, Arthur
Chief Accounting
Officer 342,889 682 342,207 Less than 1%
</TABLE>
The shares offered hereby may be resold freely, except that any selling
stockholder deemed to be an "affiliate" of the company within the meaning of
those terms under the Securities Act and the rules and regulations promulgated
thereunder, may only sell the Shares limited to the amount specified in Rule
144(e) of the Securities Act which allows them to sell, within any three-month
period, up to the number of shares that does not exceed the greater of: (1) one
percent of the then outstanding shares of common stock of the company, or (2)
the average weekly trading volume during the four calendar weeks preceding the
date of receipt of the order to execute the transaction by the broker or the
date of execution of the transaction directly with the broker.
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An employee who is not an executive officer or director of the company
generally will not be deemed to be an "affiliate" of the company. In addition,
the acquisition of shares of common stock by officers and directors of the
company through the exercise of options will generally not be considered a
"purchase," but the sale thereof will generally be considered a "sale" for
Section 16(b) of the Exchange Act.
PLAN OF DISTRIBUTION
The selling security holders and any of their pledgees, assignees, and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market, or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling security holders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution following the rules of the applicable exchange;
o privately negotiated transactions;
o short sales or sales of shares not previously owned by the seller;
o broker-dealers may agree with the selling security holders to sell a
specified number of the shares at a stipulated price per share;
o a combination of any these methods of sale; and
o any other method permitted under applicable law.
The selling security holders may also sell shares under Rule 144 under
the Securities Act, if available, rather than under this prospectus.
The selling security holders may also engage in:
o short sales against the box, which is making a short sale when the
seller already owns the shares,
o puts, which is a contract requiring the person buying the contract to
sell shares at a specified price before a specified date;
o calls, which is a contract giving the person buying the contract the
right to buy shares at a specified price before a specified date; and
o other transactions in our securities or in derivatives of our
securities.
The selling security holders may sell or deliver shares for these
trades. The selling
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security holders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may offer and sell the pledged shares.
Broker-dealers engaged by the selling security holders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders in amounts to be
negotiated. If any broker-dealer acts as agent for the purchaser of shares, the
broker-dealer may receive commission from the purchaser in amounts to be
negotiated. The selling security holders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling security holders and any broker-dealers or agents that are
involved in selling the shares may be considered to be underwriters within the
meaning of the Securities Act for the sales. An underwriter is a person who has
purchased shares from an issuer with a view towards distributing the shares to
the public. Any commissions received by the broker-dealers or agents and any
profit on the resale of the shares purchased by them may be considered to be
underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling security holders. We have agreed to indemnify the selling security
holders against some losses, claims, damages and liabilities, including
liabilities under the Securities Act.
LEGAL MATTERS
Brewer & Pritchard, P.C., Houston, Texas, will give an opinion that the
offered shares will be validly authorized and issued by Cyber-Care and fully
paid and nonassessable.
EXPERTS
Ernst & Young LLP and Grant Thornton LLP, independent auditors, have
audited our consolidated financial statements and schedules included in our
Annual Report on Form 10-KSB for the years ended December 31, 1999 and 1998,
respectively, as set forth in their reports, which are incorporated by reference
in this prospectus and elsewhere in the registration statement. Our financial
statements and schedules are incorporated by reference in reliance on Ernst &
Young LLP's and Grant Thornton, LLP's reports, given on their authority as
experts in accounting and auditing.
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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
NOTE REGARDING FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form S-8 Registration Statement
for Cyber-Care, Inc., discuss future expectations, contain projections of
results of operations or financial condition or state other forward-looking
information. All references to we, our, or us refers to Cyber-Care, Inc. or to
Cyber-Care, Inc. and its consolidated subsidiaries, as applicable. These
statements are subject to known and unknown risks, uncertainties, and other
factors that could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based on
various factors and is derived using numerous assumptions. Important factors
that may cause actual results to differ from projections include, for example:
o the success or failure of management's efforts to implement their
business strategy;
o our ability to protect our intellectual property rights;
o our ability to compete with major established companies;
o the effect of changing economic conditions;
o our ability to attract and retain quality employees; and
o other risks which may be described in future filings with the SEC.
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6,239 Shares
Cyber-Care, Inc.
Common Stock
-------------------------
PROSPECTUS
-------------------------
-------------------------
May 17, 2000
-------------------------
You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling security holders are offering to sell,
and seeking offers to buy, shares of common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the company with the SEC are
incorporated herein by reference:
1. The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the Exchange Act of 1934, or, either (1) the Company's latest
prospectus filed pursuant to Rule 424(b) under the Securities Act that contains
audited financial statements for the Company's latest fiscal year for which such
statements have been filed, or (2) the Company's effective registration
statement on Form 10-SB filed under the Exchange Act containing audited
financial statements for the Company's latest fiscal year;
2. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the document referred
to in (1) above; and
3. The description of the common stock that is contained in a
registration statement or amendment thereto filed under Section 12 of the
Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment to the registration statement which indicates that
all shares of common stock offered have been sold or which deregisters all of
such shares then remaining unsold, shall be deemed to be incorporated by
reference in the registration statement and to be a part thereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not Applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850(1) of the Florida Business Corporation Act, as amended
(the "Florida Act"), provides that, in general, a Florida corporation may
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against liability incurred in connection with such proceeding,
including any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
In the case of proceedings by or in the right of the corporation,
Section 607.0850(2) of the Florida Act provides that, in general, a corporation
may indemnify any person who was or is a party to any such proceeding by reason
of the fact that he is or was a director, officer, employee or agent of the
corporation against expenses and amounts paid in settlement actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof, provided that such person acted in
good faith an in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claims as to which such person is adjudged liable unless
a court of competent jurisdiction determines upon application that such person
is fairly and reasonably entitled to indemnity.
Section 607.0850 further provides that to the extent a director,
officer, employee or agent of a corporation is successful on the merits or in
the defense of any proceeding referred to in subsections (1) or (2) of Section
607.0850 or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith; that the corporation may advance such expenses; that
indemnification provided for by Section 607.0850 shall not be deemed exclusive
of any other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of such person against
any liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liabilities under such Section 607.0850.
Section 607.0850 of the Florida Act further provides that, in general,
indemnification or advancement of expenses shall not be made to or on behalf of
any director, officer, employee or
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agent if a judgment or other final adjudication establishes that such person's
actions, or omissions to act, were material to the cause of action so
adjudicated and constitute: (i) a violation of the criminal law, unless such
person had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful; (ii) a transaction from
which such person derived an improper personal benefit; (iii) in the case of a
director, a circumstance under which the director has voted for or assented to a
distribution made in violation of the Florida Act or the corporation's articles
of incorporation; or (iv) willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in favor or in a proceeding by or in the right
of a shareholder.
The Company's Articles of Incorporation and Bylaws provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Florida law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Any restricted securities to be offered or resold pursuant to this
registration statement were issued pursuant to an exemption under Section 4(2)
of the Securities Act, as a non-public offering of securities.
ITEM 8. EXHIBITS
The following exhibits are filed as part of this registration
statement:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
4.1(1) Common Stock Specimen
4.2(2) 1999 Employee Stock Purchase Plan
5.1(3) Opinion Regarding Legality
23.1(3) Consent of Counsel (included in Exhibit 5.1)
23.2(3) Consent of Ernst & Young LLP, independent public accountants
23.3(3) Consent of Grant Thornton LLP, independent public accounts
- - ---------------------
(1) Incorporated by reference from the Exhibit with the same reference number in
the Company's Registration Statement.
(2) Previously filed as an exhibit to the Company's definitive proxy statement,
filed with the commission on July 30, 1999, and incorporated herein by
reference.
(3) Filed herewith.
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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;
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. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and
of the estimated maximum offering range may be reflected
in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
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
(ii) do not apply if the registration statement is
on Form S-3 or Form S-8, and 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
SEC by the registrant pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
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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 undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 above, 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Boynton Beach, State of Florida, on the 17th day of
May 2000.
CYBER-CARE, INC.
By /s/ MICHAEL F. MORRELL
Michael F. Morrell, Chief Executive Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated:
SIGNATURE TITLE DATE
- - --------- ----- ----
/s/ MICHAEL F. MORRELL Chief Executive Officer, May 17, 2000
Michael F. Morrell Director and Chairman of
the Board
/s/ PAUL C. PERSHES President and Director May 17, 2000
Paul C. Pershes
Chief Accounting Officer and May 17, 2000
/s/ ARTHUR KOBRIN Senior Vice President
Arthur Kobrin
Senior Vice President May 17, 2000
/s/ LINDA MOORE
Linda Moore
Director May 17, 2000
/s/ GLEN BARBER
Glen Barber
Director May 17, 2000
/s/ THEODORE J. ORLANDO
Theodore J. Orlando
Director May 17, 2000
/s/ TERRY LAZAR
Terry Lazar
Director May 17, 2000
/s/ LOUIS R. CAPECE, JR.
Louis R. Capece, Jr.
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EXHIBIT 5.1
May 16, 2000
Cyber-Care, Inc.
1903 S. Congress Ave., Suite 400
Boynton Beach, FL 33426
Re: Cyber-Care, Inc.
Registration Statement on Form S-8
Gentlemen:
We have represented Cyber-Care, Inc., a Florida corporation ("Company"),
in connection with the preparation of a registration statement filed with the
Securities and Exchange Commission on Form S-8 ("Registration Statement")
relating to the resale of 6,239 shares ("Shares") of the Company's common stock,
par value $.0025 per share ("Common Stock") issued pursuant to the 1999 Employee
Stock Purchase Plan (the "Plan"), which is attached as an exhibit to the
Registration Statement. In this connection, we have examined originals or copies
identified to our satisfaction of such documents, corporate and other records,
certificates, and other papers as we deemed necessary to examine for purposes of
this opinion, including but not limited to the Plan, the Certificate of
Incorporation of the Company, the Bylaws of the Company, and resolutions of the
Board of Directors of the Company.
We are of the opinion that the Shares are legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this Opinion as an Exhibit to the
Registration Statement.
Very truly yours,
BREWER & PRITCHARD, P.C.
/s/ Brewer & Pritchard, P.C.
EXHIBIT 23.2
AUDITOR'S CONSENT
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1999 Employee Stock Purchase
Plan of Cyber-Care, Inc. and to the incorporation by reference therein of our
report dated February 24, 2000, with respect to the consolidated financial
statements and schedules of Cyber-Care, Inc included in its Annual Report (Form
10-KSB) for the year ended December 31, 1999, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
May 15, 2000
EXHIBIT 23.3
We have issued our report dated March 26, 1999, accompanying the consolidated
financial statements of Cyber Care, Inc. (formerly Medical Industries of
America, Inc.) and subsidiaries included in Form 10-KSB for the year ended
December 31, 1998 which is incorporated by reference in this Registration
Statement on Form S-8 dated May 16, 2000. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report and to the
use of our name as it appears under the caption "Experts."
/s/ Grant Thornton LLP
Fort Lauderdale, Florida
May 16, 2000
