LYLE B. STEWART, P.C.
3751 SOUTH QUEBEC STREET
DENVER, COLORADO 80237
TELEPHONE: 303-267-0920
FAX: 303-267-0922
September 30, 1998
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20459
Dear Madams and Sirs:
On behalf of my client, Medix Resources, Inc., filed herewith is a Form S-2
Registration Statement relating to 7,779,170 shares of such company's common
stock to be sold by selling shareholders.
If you have any questions about this filing, please contact the undersigned at
the telephone or fax numbers indicated above.
Very truly yours
/s/
Lyle B. Stewart
<PAGE>
As filed with the Securities and Exchange Commission on September 30, 1998.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
MEDIX RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Colorado 84-1087334
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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7100 E. Belleview Ave., Suite 301
Englewood, Colorado 80111
(303) 741-2045
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
JOHN P. YEROS
President and Chief Executive Officer
7100 E. Belleview Ave., Suite 301
Englewood, Colorado 80111
(303) 741-2045
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
-----------------
Copies to:
LYLE B. STEWART, ESQ.
Lyle B. Stewart, P.C.
3751 S. Quebec Street
Denver, Colorado 80237
(303) 267-0920
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Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: ?
<PAGE>
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to item 11(a)(1)
of this Form, check the following box: __
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. __
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. __
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.__
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE (1) FEE
- ---------------------- ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C>
Common stock, par value
$.001 per share 7,779,170 $ 0.11 $ 855,709 $ 253.00
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee. In
accordance with Rule 457(c), the price shown is based upon the average of
the bid and the asked price of the Company's Common Stock on September 24,
1998, as reported on the OTC Bulletin Board.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 30, 1998
PROSPECTUS
7,779,170 Shares
MEDIX RESOURCES, INC.
Common Stock
(par value $.001 per share)
This Prospectus relates to 7,779,170 shares of Common Stock, of Medix Resources,
Inc., which may be offered for sale from time to time by certain stockholders of
the company (the "Selling Stockholders"), or by their pledgees, donees,
transferees or other successors in interest, to or through underwriters or
directly to other purchasers or through agents in one or more transactions at
varying prices determined at the time of sale or at negotiated prices. See "Plan
of Distribution."
The company will not receive directly any of the proceeds from the sale of the
shares of Common Stock (the "Shares") by the Selling Stockholders. However,
certain of the Selling Shareholders will only sell shares of company Common
Stock after they have exercised options or warrants that they currently hold.
The Company will receive the proceeds of such exercises. The expenses of
registration of the shares which may be offered hereby will be paid by the
company.
The Common Stock is traded on the OTC Bulletin Board under the symbol "MDIX". On
September 24, 1998, the last sale price of the Common Stock was reported as
$0.09.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 3 FOR CERTAIN RISKS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SECURITIES OFFERED HEREBY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ______________ __, 1998
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDERS OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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<PAGE>
TABLE OF CONTENTS
PAGE
RISK FACTORS..................................................................3
THE COMPANY..................................................................10
USE OF PROCEEDS..............................................................11
SELLING STOCKHOLDER......................................................... 11
DESCRIPTION OF SECURITIES....................................................13
PLAN OF DISTRIBUTION.........................................................14
INDEMNIFICATION OF OFFICERS AND DIRECTORS....................................15
AVAILABLE INFORMATION........................................................16
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE............................16
LEGAL MATTERS................................................................17
EXPERTS......................................................................17
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK HAS A HIGH DEGREE OF RISK, IS HIGHLY
SPECULATIVE AND SHOULD ONLY BE CONSIDERED BY THOSE PERSONS OR ENTITIES WHO CAN
AFFORD TO LOOSE THEIR ENTIRE INVESTMENT. IN ADDITION TO THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CAREFULLY
CONSIDERED IN EVALUATING THE COMPANY AND ITS BUSINESS AND AN INVESTMENT IN
SHARES OF THE COMPANY?S COMMON STOCK. THE ORDER IN WHICH THE FOLLOWING RISK
FACTORS ARE PRESENTED DOES NOT INDICATE THE RELATIVE MAGNITUDE OF THE RISKS
DESCRIBED. CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS OR IN DOCUMENTS
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS AS DEFINED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
IN THAT THEY RELATE TO EVENTS OR TRANSACTIONS THAT HAVE NOT OCCURRED,
EXPECTATIONS OR ESTIMATES OF THE COMPANY, GROWTH STRATEGIES OR BUSINESS PLANS OF
THE COMPANY OR OTHER EVENTS OR FACTS THAT HAVE NOT YET OCCURRED. SUCH STATEMENTS
CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS ?MIGHT,?
?MAY,? ?WILL,? ?COULD,? ?EXPECT,? ?ANTICIPATE,? ?ESTIMATE,? LIKELY,? ?BELIEVE,?
OR ?CONTINUE? OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE
TERMINOLOGY. THE FOLLOWING RISK FACTORS CONTAIN DISCUSSIONS OF IMPORTANT FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS RELATED TO FORWARD-LOOKING
STATEMENTS INCLUDED IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. THESE IMPORTANT FACTORS, AMONG OTHERS, MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE RESULTS EXPRESSED OR IMPLIED BY THE
FORWARD-LOOKING STATEMENTS.
WE HAVE PRIOR OPERATING LOSSES AND A GOING CONCERN EXCEPTION FROM OUR
ACCOUNTANTS
This Company reported net losses of ($515,000) and ($1,207,000) for the years
ended December 28, 1997 and December 29, 1996, respectively, and ($1,416,000)
for the six months ending June 28, 1998. At June 28, 1998, it had an accumulated
deficit of ($9,155,000) and a working capital deficit of ($2,584,000). The
Company is currently delinquent in the payment of certain of its current
liabilities. Such obligations include federal income tax withholdings from
employees and employer payroll taxes. There is no assurance that we will achieve
a specific level of revenues, or that we will operate profitably in the future.
Our auditor's report relating to the audit of its most recent annual financial
statements contains an explanatory paragraph describing that there is
substantial doubt about our ability to continue as a going concern.
The Company may experience significant fluctuations in future operating results
due to a number of factors including, among others, the effect of regulatory and
legislative developments on us, pricing trends in the healthcare staffing and
medical information software industries, availability of qualified personnel,
reductions in demand for our services and products due to competition,
regulation and other factors, the ability of management to coordinate and
implement a marketing strategy, and costs associated with maintenance of quality
control standards. The impact of any of these factors could cause operating
results to decline significantly from prior periods. Any significant decrease in
revenues for any reason would have an immediate adverse impact on the Company's
ability to operate profitably and its ability to continue as an operating
entity. No assurances can be given that we will be able to obtain sufficient
debt or equity financing on acceptable terms to enable the Company to meet its
cash needs.
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<PAGE>
OUR NEED FOR ADDITIONAL FINANCING
The Company had negative working capital of ($2,584,000) at June 28, 1998. The
current operation of our business and our ability to continue to expand will
depend upon our ability to obtain additional financing. We do not currently have
a source of funds for the funding of the development of our Cymedix software
products. We are meeting a portion of our current cash flow needs principally
through the sale of assets and the financing of accounts receivable under terms
which have resulted in significant financing costs to the Company. There can be
no assurance that additional financing will be available. The development and
marketing of the Cymedix software products require substantial capital
investments. There can be no assurance that additional investments or financings
will be available to us as needed to support the development of Cymedix
products. Failure to obtain such capital on a timely basis could result in lost
business opportunities, the sale of the Cymedix business at a distressed price
or the financial failure of the Company.
THERE IS GREAT UNCERTAINTY IN THE HEALTH CARE INDUSTRY
The healthcare and medical services industry in the United States is in a period
of rapid change and uncertainty. Governmental programs have been proposed from
time to time to reform various aspects of the U.S. healthcare delivery system.
Some of these programs contain proposals to increase government involvement in
health care, lower reimbursement rates and otherwise change the operating
environment for our customers. Healthcare facilities may react to these
proposals and the uncertainty surrounding such proposals by curtailing the use
of interim staffing provided by vendors such as us. We cannot predict with any
certainty what impact, if any, proposals for health care reforms might have on
our business. As part of health care reform, recent federal and certain state
legislative proposals have included provisions extending health insurance
benefits to temporary employees. Due to the wide variety of national and state
proposals relating to health care presently under consideration, the impact of
such proposals cannot be predicted.
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operations
of hospitals and other health care facilities. During the past several years,
the health care industry has been subject to an increase in government
regulation of, among other things, reimbursement rates and certain capital
expenditures. In addition, major third party payors of hospital services
(insurance companies, Medicare and Medicaid) have significantly revised payment
procedures in an effort to contain healthcare costs. These and other factors
affecting the health care industry may have a significant adverse impact on our
operating results.
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<PAGE>
OUR DEPENDENCE ON CUSTOMER RELATIONSHIPS AND ABSENCE OF CUSTOMER AND CARE-GIVER
CONTRACTS
Our business is dependent on its ability to establish and maintain close working
relationships with hospitals, clinics, nursing homes, physician groups, assisted
living facilities, health maintenance organizations, educational institutions,
third party payors and other referral sources, and with care givers providing
services on behalf of the Company. Although we have established customer and
care giver relationships in the markets in which we presently operate, there can
be no assurance these relationships will continue. None of the contracts by and
between us and our customers is exclusive, and these contracts do not obligate
the customers to utilize a designated number of interim or home care staff for
any specific period of time. Although certain customer contracts provide that we
will be the first interim staffing firm contacted by the hospital, this first
call right does not guarantee that we will achieve a specific level of, or any,
revenues as a result of such right. Likewise, contracts between the Company and
its care givers are non-exclusive and do not obligate the care giver to render
services for any specific period of time. Accordingly, it is possible that the
Company may not be able to meet customer demand for qualified personnel, or it
may not be able to do so on a cost-efficient basis.
OUR NEW SOFTWARE BUSINESS LINE
The Company, through its subsidiary Cymedix Lynx Corporation, has only recently
begun its medical software line of business through the acquisition of a
development stage medial software business. The uncertainties and risks that
accompany forward-looking statements are enhanced by our lack of experience in
this business. The Company has no experience in marketing of software products,
providing software support services, evaluating demand for products, financing a
software business and dealing with government regulation of software products.
As a developer of information systems, we will be required to anticipate and
adapt to evolving industry standards and new technological developments. The
market for our software products is characterized by continued and rapid
technological advances in both hardware and software development, requiring
ongoing expenditures for research and development and the timely introduction of
new products and enhancements to existing products. The establishment of
standards is largely a function of user acceptance. Therefore, such standards
are subject to change. Our future success, if at all, will depend in part upon
our ability to continue the development of existing products, to respond
effectively to technology changes, and to introduce new products and
technologies to meet the evolving needs of its clients in the health care
information systems market. We are currently devoting significant resources
toward the development of products. There can be no assurance that we will
successfully complete the development of these products in a timely fashion or
that our current or future products will satisfy the needs of the health care
information systems market. Further, there can be no assurance that products or
technologies developed by others will not adversely affect our competitive
position or render its products or technologies noncompetitive or obsolete.
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<PAGE>
RISKS OF INFRINGEMENT OF PROPRIETARY TECHNOLOGY
Our Company's wholly-owned subsidiary, Cymedix Lynx, has filed a U.S. patent
application, covering its Cymedix Lynx product, and has made a related filing
under the Patent Cooperation Treaty. The U.S. application is currently under
review by the U.S. Patent and Trademark Office. Whether a patent will be granted
in response to such application or the scope of such patent can not be
determined at this time. This subsidiary has also filed applications with the
U.S. Patent and Trademark Office for trademark protection of certain marks used
or to be used with its software products. Regulatory review of such applications
has not yet been completed. In addition, the subsidiary will file applications
for copyright registration with the U.S. Copyright Office of modular software
components and related software when it deems copyright protection is legally
available and in our best interest. No assurance can be given that any of the
Company's software products will receive patent or other intellectual property
protection.
The patent and trade secret legal issues for software programs are complex and
currently evolving. Since patent applications are secret until patents are
issued, in the United States, or published, in other countries, we can not be
sure that it is first to file any patent application. In addition, there can be
no assurance that competitors, many of which have far greater resources than we
do, will not apply for and obtain patents that will interfere with the Company's
ability to develop or market product ideas that it has originated. Further, the
laws of certain foreign countries do not provide the protection to intellectual
property that is provided in the United States, and may limit our ability to
market its products overseas. Litigation or regulatory proceedings may be
necessary to protect the Company's patent claims, the scope of its actual
patents and its other intellectual property. In fact, the computer software
industry in general is characterized by substantial litigation. Such litigation
and regulatory proceedings are very expensive and could be a significant drain
on our resources and divert resources from product development. There is no
assurance that we will have the financial resources to defend our patents from
infringement or claims of invalidity. The Company is currently involved in a
dispute over intellectual property issues with Andrx Corporation. See the
disclosure under Legal Proceedings in item 1 of Part II of the Company's most
recent Form 10-QSB, filed with the SEC.
We also rely upon unpatented proprietary technology and no assurance can be
given that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to or disclose
our proprietary technology or that we can meaningfully protect our rights in
such unpatented proprietary technology. We will use our best efforts to protect
such information and techniques, however, no assurance can be given that such
efforts will be successful. The failure to protect its intellectual property
could cause the Company to loose substantial revenues and to fail to reach its
financial potential over the long term.
COMPETITION
The market for interim staffing and home care services is highly competitive.
Many of our existing and potential competitors have substantially greater
financial, marketing and personnel resources than we do and have established
reputations in the flexible healthcare staffing industry. Accordingly, we are at
a disadvantage in competing with such entities. It is likely that the current
trend toward increased consolidation in the health care industry will
accelerate. Some of our larger competitors may gain an additional advantage by
offering enterprise-wide interim staffing for health care facilities.
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<PAGE>
In addition, our operations depend, to a significant degree, on its ability to
recruit qualified health care personnel. We face competition from other
companies in recruiting qualified health care personnel and there is no
assurance that qualified personnel will be available to us in the future or the
costs at which such personnel might be available. The failure of the Company to
recruit qualified personnel, or a significant increase in our cost of such
personnel, could have a material adverse effect on the Company's financial
position and operations. There can be no assurance that we will be able to
continue to compete successfully in the markets in which it is active or in any
markets it enters in the future.
While the Company's subsidiary, Cymedix Lynx Corporation, believes it is the
first company to market a product for clinical medical data exchange through the
Internet, competition can be expected to emerge from established healthcare
information vendors, seeking to capitalize on Cymedix's work in developing and
proving the market. The most likely competitors are companies with a focus on
clinical information systems and enterprises with an Internet commerce or
electronic network focus. Many of these competitors will have access to
substantially greater amounts of capital resources than we have access to, for
the financing of technical, manufacturing and marketing efforts. Frequently,
these competitors will have affiliations with major medical product companies or
software developers, who will assist in the financing of such competitor's
product development. We will seek to raise capital to develop Cymedix products
in a timely manner, however, so long as our operations remain underfunded, as
they now are, the Company and its subsidiary will be at a competitive
disadvantage.
OUR DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent on John P. Yeros, Chairman
of the Board and Chief Executive Officer, of the Company, and Keith Berman, who
is responsible for its medical information software development and operations.
The loss of the services of either could have an adverse effect on our business.
The Company has entered into employment agreements with both that provide that
either can terminate his employment on 90 days notice and that include
noncompetition covenants. Our future success will depend in part upon its
continuing ability to attract and retain highly qualified personnel to manage
the future growth of the business. There can be no assurance that we will be
successful in attracting and retaining such personnel.
WE ARE SUBJECT TO FLUCTUATIONS IN OPERATING RESULTS AND CASH FLOW
Our results of operations and cash flow have fluctuated and will continue to
fluctuate significantly from quarter to quarter. Various factors may affect the
results of operations, including hospital budgetary cycles, increased
competition for qualified medical personnel, patient admission fluctuations and
seasonality. Likewise, our cash flow may fluctuate due to the adoption by
hospitals and third party payors of new or revised reimbursement policies, the
cost and availability of accounts receivable financing, extension of more
favorable credit terms to key customers and various other factors. Should we
encounter delays in collecting from third party payors or its customers for any
reasons, our results of operations and cash flow may be materially adversely
affected.
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<PAGE>
WE HAVE PERSONNEL RISKS
Medical staff providers, such as the Company, are in the business of employing
people and placing them in the workplace of other businesses. Attendant risks of
such activity include possible claims of discrimination and harassment,
employment of illegal aliens, unqualified or unlicensed medical personnel and
other similar claims. We have policies, guidelines and screening procedures in
place to reduce its exposure to these risks. However, a failure to follow these
policies and guidelines may result in negative publicity and the payment by us
of money damages or fines. From time to time, we become involved in litigation
for injuries or damages caused by the acts of its staff. See Legal Proceedings
in item 1 of Part II of the Company's most recent Form 10-QSB, filed with the
SEC. While we maintain insurance providing coverage for certain negligent acts
in an amount we believe is customary for the industry, there can be no assurance
that our insurance policies will be sufficient so as to offset any claims
received. In addition, such policies exclude certain acts, usually involving
criminal behavior from coverage. Moreover, costs of insurance may escalate
beyond anticipated levels, or certain types of losses may be uninsurable or may
exceed coverage. Any substantial uninsured loss suffered by the Company would
have a material adverse effect on our business.
IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
The Company has 21,500,724 shares of Common Stock outstanding. Of these shares,
approximately 9,243,591 shares are restricted and not freely transferrable. A
substantial portion of such shares are being registered for sale using this
Prospectus. As of the date hereof, approximately 10,530,502 shares were issuable
upon the exercise of outstanding options or Warrants and the conversion of
Preferred Stock. The Company has been authorized to issue options covering up to
4,600,000 shares of Common Stock. The exercise prices of options and warrants to
acquire Common Stock presently outstanding range from $.15 per share to $6.00
per share. During the respective terms of the outstanding options, warrants,
Preferred Stock and other outstanding underlying securities, the holders are
given the opportunity to profit from a rise in the market price of the Common
Stock, and the exercise of any options or warrants may dilute the book value per
share of the Common Stock. The existence of the options, conversion rights, or
any outstanding warrants may adversely affect the terms on which the Company may
obtain additional equity financing. Moreover, the holders of such securities are
likely to exercise their rights to acquire Common Stock at a time when the
Company would otherwise be able to obtain capital on terms more favorable than
could be obtained through the exercise or conversion of such securities.
LACK OF AUTHORIZED SHARES
At the date hereof, the Company's Articles of Incorporation authorize the
issuance of 25,000,000 shares of its Common Stock. The Company currently has
21,500,724 shares of its Common Stock issued and outstanding. Currently
outstanding options, warrants and convertible stock issued by the Company would
require the issuance of 10,530,502 shares of Common Stock if all such options,
warrants and convertible stock were exercised or converted. We will be required
to call a meeting of shareholders to authorize more shares of its Common Stock.
It is possible that we could be subject to litigation as a result of committing
to issue shares in excess of our authorized number of shares.
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<PAGE>
VOLATILITY OF OUR STOCK PRICE
Historically, our Common Stock has experienced significant price fluctuations.
Factors such as quarterly fluctuations in results of operations, negative
announcements by the Company or others, regulatory, legislative or other
developments affecting the Company or the health care industry generally,
conversion of our Preferred Stock into Common Stock, market conditions specific
to the health care industry and general market conditions may cause the market
price of the Common Stock to fluctuate, perhaps substantially. In addition, in
recent years the stock market has experienced significant price and volume
fluctuations. These fluctuations, which are often unrelated to the operating
performance of specific companies, have had a substantial effect on the market
price for many health care related companies. Factors such as those cited above,
as well as other factors which may be unrelated to the operating performance of
the Company, may adversely affect the price of the Common Stock.
APPLICATION OF PENNY STOCK RULES TO OUR COMMON STOCK
Trading of our Common Stock is subject to the penny stock rules under the
Securities Exchange Act of 1934, as amended, unless an exemption from such rules
is available. Broker-dealers making a market in our Common Stock will be
required to provide disclosure to their customers regarding the risks associated
with our Common Stock, the suitability for the customer of an investment in our
Common Stock, the duties of the broker-dealer to the customer and information
regarding bid and ask prices for our Common Stock and the amount and description
of any compensation the broker-dealer would receive in connection with a
transaction in our Common Stock. The application of these rules will likely
result in fewer market makers making a market of our Common Stock and further
restrict the liquidity of our Common Stock.
DESCRIPTION OF COMMON STOCK; ABSENCE OF COMMON STOCK DIVIDENDS
Each share of Common Stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the election
of directors. All shares of Common Stock are equal to each other with respect to
liquidation rights and dividend rights. There are no preemptive rights to
purchase any additional Common Stock. In the event of liquidation, dissolution
or winding up of the Company, holders of the Common Stock will be entitled to
receive on a pro rata basis all assets of the Company remaining after
satisfaction of all liabilities and preferences of the outstanding Preferred
Stock.
We are required to pay dividends on the 1996 Preferred Stock, and, in certain
circumstances, the 1997 Preferred Stock. Because we, in order to support our
growth, have a general policy to retain any earnings for use in our operation,
we do not anticipate paying any cash dividends on the Common Stock in the
foreseeable future. Any payment of cash dividends on the Common Stock in the
future will be dependent upon our financial condition, results of operations,
current and anticipated cash requirements, plans for expansion, as well as other
factors that the Board of Directors deems relevant. We anticipate that any
future financing agreements will prohibit the payment of Common Stock dividends
without the prior written consent of the Company's lender(s).
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<PAGE>
THE COMPANY
GENERAL
Medix Resources, Inc., a Colorado corporation, formerly known as International
Nursing Services, Inc. (the Company), currently operates in two principal lines
of business, healthcare staffing services and medical information software.
The Company, doing business as National Care Resources and TherAmerica, Inc.,
provides skilled nursing, therapists, rehabilitation and other medical personnel
for supplemental staffing in home care and in a broad spectrum of health care
and educational facilities. The Company's supplemental staffing services are
provided through a pool of approximately 1,400 caregivers including licensed and
registered nurses, rehabilitation, physical, respiratory, occupational and
speech therapists, medical social workers, home care aides and other unlicensed
personnel. The Company's supplemental and home care staff currently serves over
300 hospitals, clinics, nursing homes, physician groups, assisted living
facilities, health maintenance organizations and other health care institutions,
a variety of educational facilities and individual home care clients. The
Company operates through offices located in Houston and San Antonio, Texas,
Emoryville and Ontario, California, and Englewood, Colorado. The Company
currently provides supplemental staffing services and therapists in Texas,
Colorado and California. Travel nurses and therapists are provided in seventeen
states and the District of Columbia.
The Company acquired Cymedix Corporation in January of 1998. Cymedix has
developed an Internet-based communications and information management product,
Cymedix Lynx, which the Company began marketing to medial professionals
nationwide. Growth of the medical information management marketplace is being
driven by the need to share significant amounts of clinical and patent
information between physicians, their outpatient service providers, hospitals,
insurance companies and managed care organizations. This market is one of the
fastest-growing sectors in healthcare today, commanding a projected two-thirds
of health care capital investments. Cymedix Lynx is a secure medical
communications product, with patent application pending, that makes use of the
Internet. Using Cymedix Lynx, medical professionals can order, prescribe and
access medical information from insurance companies and managed care
organizations, as well as from any participating outpatient service provider
such as a laboratory, radiology center, pharmacy or hospital. The Company will
provide its software free of charge to physicians and clinics, and will collect
user fees whenever these products connect to the Internet. The product's
relational database technology provides physicians with a permanent, ongoing
record of each patient's name, address, insurance or managed care affiliation,
referral status, medical history, personalized notes and an audit trail of past
encounters. Physicians can electronically order medical procedures, receive and
store test results, check patient eligibility, make medical referrals, request
authorizations, and report financial and encounter information in a
cost-effective, secure and timely manner.
RECENT DEVELOPMENTS
The Nasdaq Stock Market, Inc. de-listed the Company's Common Stock from trading
on the Nasdaq SmallCap Market on July 14, 1998 for failure to satisfy the
revised listing maintenance standards adopted by The Nasdaq Stock Market, Inc.
in 1997. The Company's Common Stock is eligible to trade on the OTC Bulletin
Board. Information about the OTC Bulletin Board can be found on the Internet at
www.OTCBB.com.
- 10 -
<PAGE>
On September 14, 1998, the Registrant sold its remaining operations in the State
of New York, which operated under the trade names STAT Healthcare Services and
Ellis Home Care Services, to Premier Home Health Care Services, Inc. of White
Plains, New York. The purchase price for the operations was $1,650,000, payable
with cash of $1,000,000 and the delivery of two promissory notes in the
principal amount of $325,000 each. The promissory notes accrue interest at 4%
annually, and mature in 9 and 15 months respectively. The 15-month promissory
note has been escrowed and is subject to offset if the operations do not meet
certain billings levels over a 4-week period after the closing or if claims for
indemnification are made by the purchaser. The Registrant used the funds
generated by the sale to reduce its principal line of credit and to provide
working capital.
The Company's principal executive office is located at 7100 East Belleview Ave.,
Englewood, Colorado 80111, and its telephone number is (303) 741-2045.
USE OF PROCEEDS
The net proceeds from the sale of the Shares will be received by the Selling
Stockholders. The Company will not receive any of the proceeds from any sale of
the Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The table below sets forth information as of September 24, 1998 with respect to
the Selling Stockholders, including names, holdings of shares of Common Stock
prior to the offering of the Shares, the number of Shares being offered for each
account, and the number and percentage of shares of Common Stock to be owned by
the Selling Stockholders immediately following the sale of the Shares, assuming
all of the offered Shares are sold.
<TABLE>
<CAPTION>
SHARES OF SHARES
COMMON STOCK OF COMMON
BENEFICIALLY SHARES OF STOCK TO BE THE OFFERING
OWNED BEFORE COMMON STOCK BENEFICIALLY NUMBER
NAME THE OFFERING BEING OFFERED OWNED AFTER PERCENTAGE
- ------------------------ ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Ace Foundation Inc. .... 2,500 2,500 0 0
Adler, Harry ........... 2,500 2,500 0 0
Antine, Seth Joseph .... 1,500 1,500 0 0
Asbell, Barbara(1) ..... 1,565,817 1,565,817 0 0
Belcher, Michael(1) .... 30,763 30,763 0 0
Berenbaum, Shmuel ...... 1,000 1,000 0 0
Berman, Keith(1) ....... 546,584 546,584 0 0
BHSY Special Products .. 2,500 2,500 0 0
Bloom, Jerome .......... 1,000 1,000 0 0
Bodner, Naomi .......... 24,000 24,000 0 0
Bodner, Helenka ........ 1,000 1,000 0 0
</TABLE>
- 11 -
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES
COMMON STOCK OF COMMON
BENEFICIALLY SHARES OF STOCK TO BE THE OFFERING
OWNED BEFORE COMMON STOCK BENEFICIALLY NUMBER
NAME THE OFFERING BEING OFFERED OWNED AFTER PERCENTAGE
- ------------------------ ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Clifton Management ......... 2,000 2,000 0 0
Congregation Ahavas Tzedakah 4,400 4,400 0 0
Congregation B?nai Torah ... 1,000 1,000 0 0
Dodson, B.F.(1) ............ 307,626 307,626 0 0
Ezer Mzion, Inc. ........... 10,000 10,000 0 0
Folger, Rita ............... 4,000 4,000 0 0
Garber, John(1) ............ 138,776 138,776 0 0
Hakodesh, Shekel ........... 5,000 5,000 0 0
Harmonic Profit Sharing .... 142,425 142,425 0 0
Plan(1)
Huberfeld, Laura ........... 24,000 24,000 0 0
Huberfeld/Bodner Family
Foundation ................. 10,000 10,000 0 0
Huberfeld/Bodner ........... 283,699 283,699 0 0
Partnership(1)
Huberfeld, Philip & Rae .... 1,250 1,250 0 0
J. Mitchell Hull Trust(1) .. 142,425 142,425 0 0
Jagunich, Bob(1) ........... 1,129,978 1,129,978 0 0
Johnson, Monique(1) ........ 15,381 15,381 0 0
Kalmanowitz, Avrohom ....... 1,000 1,000 0 0
Keren MY & CB Elias, Inc. .. 2,500 2,500 0 0
Klugman, David ............. 9,000 9,000 0 0
Klugman-MMP, David ......... 5,000 5,000 0 0
Lerner, Chainie ............ 2,000 2,000 0 0
Levy, Isaac & Binsa ........ 1,250 1,250 0 0
M & W Medical Supplies ..... 1,000 1,000 0 0
McLean, Brian(1) ........... 410,915 410,915 0 0
Mesivta of Long Beach ...... 1,000 1,000 0 0
Mishall, Sima(1) ........... 15,381 15,381 0 0
Mueller, Moshe ............. 1,000 1,000 0 0
Mueller, Mark .............. 500 500 0 0
Newark Sales ............... 25,000 25,000 0 0
Newman, Joel(1) ............ 917,224 917,224 0 0
Nordlicht, Jules ........... 10,000 10,000 0 0
Oberle, Thomas J ........... 313,250 313,250 0 0
OHR Somayach International . 2,000 2,000 0 0
OHR Somayach Tananbaum
Education .................. 2,500 2,500 0 0
Powell, Charles ............ 310,000 310,000 0 0
Prince, Arnold(1) .......... 159,966 159,966 0 0
Rudy, Fred ................. 1,000 1,000 0 0
</TABLE>
- 12 -
<PAGE>
<TABLE>
<CAPTION>
SHARES OF SHARES
COMMON STOCK OF COMMON
BENEFICIALLY SHARES OF STOCK TO BE THE OFFERING
OWNED BEFORE COMMON STOCK BENEFICIALLY NUMBER
NAME THE OFFERING BEING OFFERED OWNED AFTER PERCENTAGE
- ------------------------ ------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Saleslink LTD ................. 6,000 6,000 0 0
Schepansky, Reuvain ........... 1,000 1,000 0 0
Segal, Gordon(1) .............. 159,986 159,986 0 0
Sexton, Mason(1) .............. 184,575 184,575 0 0
Shalom Torah Trust(1) ......... 71,215 71,215 0 0
Shapiro, Samuel ............... 500 500 0 0
Shlomo, Karen Chaim ........... 1,000 1,000 0 0
Springer, April ( ............. 3,076 3,076 0 0
Metoyer)(1)
Stadtmauer, Richard ........... 5,000 5,000 0 0
Stahl, Douglas(1) ............. 184,576 184,576 0 0
Weinberg, Paul(1) ............. 159,966 159,966 0 0
William G. Walters IRA(1) ..... 142,425 142,425 0 0
Wright, Robinson, Osthimer
& Tatum(1) .................... 116,898 116,898 0 0
Young, Ann and Jerry(1) ....... 150,343 150,343 0 0
----------
$7,779,170
==========
</TABLE>
(1) These shares were issued in connection with the acquisition of Cymedix
Corporation by the Company.
RELATIONSHIP BETWEEN THE COMPANY AND THE SELLING STOCKHOLDERS
The Selling Shareholders have or will acquire the shares of Common Stock
indicated above in one of the following ways: (i) the acquisition of Cymedix
Corporation by the Company in which 6,980,000 shares of the Company's Common
Stock were issued to 23 shareholders of the Cymedix Corporation, (ii) upon the
conversion of Preferred Stock and other securities of the Company issued by the
Company in 1996 and 1997, and (iii) the exercise by two directors of the Company
of options granted to them by the Company. Other than Mr. Thomas Oberle and Mr.
Charles Powell, who are directors of the Company, and Ms. Barbara Asbell and Mr.
Berman, who are employees of a subsidiary of the Company, none of the other
Selling Shareholders have any material relationship with the Company, except for
their ownership of shares of Common Stock.
DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 25,000,000 shares of Common Stock,
par value $.001 per share, and 2,500,000 shares of Preferred Stock. As of
September 23, 1998, the Company had outstanding 21,500,724 shares of Common
Stock, 8.0 shares of 1996 Preferred Stock and 15.5 shares of 1997 Preferred
Stock. As of such date, the Common Stock was held of record by approximately 448
persons.
- 13 -
<PAGE>
COMMON STOCK
Each share of Common Stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the election
of directors. All shares of Common Stock are equal to each other with respect to
liquidation rights and dividend rights. There are no preemptive rights to
purchase any additional Common Stock. In the event of liquidation, dissolution
or winding up of the Company, holders of the Common Stock will be entitled to
receive on a pro rata basis all assets of the Company remaining after
satisfaction of all liabilities and preferences of the outstanding Preferred
Stock. The outstanding shares of Common Stock and the shares of Common Stock
issuable upon conversion or exercise or underlying securities are or will be, as
the case may be, duly and validly issued, fully paid and non-assessable.
TRANSFER AGENT
The Company has retained American Securities Transfer, Inc., 1825 Lawrence
Street, Suite 444, Denver, Colorado 80202, as Transfer Agent for the Company's
Common Stock.
PLAN OF DISTRIBUTION
Any distribution of the Shares by the Selling Stockholders, or by their
pledgees, donees, transferees or other successors in interest, may be effected
from time to time in one or more of the following transactions: (a) to
underwriters who will acquire the Shares for their own account and resell them
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale (any
public offering price and any discount or concessions allowed or reallowed or
paid to dealers may be changed from time to time); (b) through brokers, acting
as principal or agent, in transactions (which may involve block transactions) on
the OTC Bulletin Board or on one or more exchanges on which the Shares are then
listed, in special offerings, exchange distributions pursuant to the rules of
the applicable exchanges or in the over-the-counter market, or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices; (c) directly
or through brokers or agents in private sales at negotiated prices; or (d) by
any other legally available means. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 of the Securities Act
("Rule 144") may be sold under Rule 144 rather than pursuant to this Prospectus.
All discounts, commissions or fees incurred in connection with the sale of the
Common Stock offered hereby will be paid by the Selling Stockholders, except
that the expenses of preparing and filing this Prospectus and the related
Registration Statement with the Securities and Exchange Commission, and of
registering or qualifying the Common Stock will be paid by the Company.
The Selling Stockholders and such underwriters, brokers, dealers or agents, upon
effecting a sale of the Shares, may be considered "underwriters" as that term is
defined by the Securities Act.
Underwriters participating in any offering made pursuant to this Prospectus (as
amended or supplemented from time to time) may receive underwriting discounts
and commissions, discounts or concessions may be allowed or reallowed or paid to
dealers, and brokers or agents participating in such transaction may receive
brokerage or agent's commissions or fees.
- 14 -
<PAGE>
If required at the time a particular offering of the Shares is made, a
Prospectus Supplement would be distributed which would set forth the amount of
the Shares being offered and the terms of the Offering, including the purchase
price or public offering price, the name or names of any underwriters, dealers
or agents, the purchase price paid by any underwriter for the Shares purchased
from the Selling Stockholders, any discounts, commissions and other items
constituting compensation from the Selling Stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers. The Company
has not been informed that an underwriter has been engaged for the sale of any
of the Shares.
In order to comply with the securities laws of certain states, if applicable,
the Shares will be sold in such jurisdictions, if required, only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless the Shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and complied with.
The Company has agreed that it will bear all costs, expenses and fees in
connection with the registration of the Shares.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article 109 of the Colorado Business Corporation Act generally provides that a
corporation may indemnify its directors, officers, employees and agents against
liabilities and action, suit or proceeding whether civil, criminal,
administrative or investigative and whether formal or informal (a "Proceeding"),
by reason of being or having been a director, officer, employee, fiduciary or
agent of the Company, if such person acted in good faith and reasonably believed
that his conduct, in his official capacity, was in the best interests of the
Company (or, with respect to employee benefit plans, was in the best interests
of the participants of the plan), and in all other cases that his conduct was at
least not opposed to the Company's best interests. In the case of a criminal
proceeding, the director, officer, employee or agent must have had no reasonable
cause to believe that his conduct was unlawful. Under Colorado Law, the Company
may not indemnify a director, officer, employee or agent in connection with a
proceeding by or in the right of the Company if the director is adjudged liable
to the Company, or in a proceeding in which the directors, officer employee or
agent is adjudged liable for an improper personal benefit.
The Company's Articles of Incorporation provide that the company shall indemnify
its directors, and officers, employees and agents to the extent and in the
manner permitted by the provisions of the laws of the State of Colorado, as
amended from time to time, subject to any permissible expansion or limitation of
such indemnification, as may be set forth in any shareholders' or directors'
resolution or by contract.
Insofar as indemnification for liabilities under the Act may be permitted to
directors, officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Commission,
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
- 15 -
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information concerning the Company filed with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at its office at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the Regional Offices of the Commission at Citicorp Center,
300 West Madison Street, Chicago, Illinois 60661 and Seven World Trade Center,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company has filed a registration statement on Form S-2 (herein, together
with all amendments and exhibits thereto, the "Registration Statement"), under
the Securities Act of 1933, as amended (the Securities Act), with respect to the
securities offered pursuant to this Prospectus (the Offering). This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement and the exhibits filed as a part thereof. Statements
contained herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange Act
by the Company (File No. 000-24768) are incorporated herein by reference and are
delivered, without charge, with this Prospectus:
(a) a copy of the Company's latest Form 10-KSB, which as of the date of this
Prospectus is the Company's Form 10-KSB for the fiscal year ended December
28, 1997, as filed with the Commission on March 30, 1998; and
(b) a copy of the Company's latest Form 10-QSB, which as of the date of this
Prospectus is the Company's Form 10-QSB for the fiscal quarter ended June
28, 1998, as filed with the Commission on August 17, 1998.
All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act
since the end of the fiscal year referred to in item (a) above shall be deemed
to be incorporated herein by reference and to be a part of this Prospectus. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, subsequent to the date of this Prospectus and prior to the
termination of the Offering, shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the respective dates of such
filings. 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 that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
- 16 -
<PAGE>
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon oral or written request of any such person, a copy
of any or all of the documents incorporated herein by reference, other than the
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates). Requests
should be directed to John P. Yeros, Medix Resources, Inc., 7100 E. Belleview
Avenue, Suite 301, Englewood, Colorado 80111, telephone (303) 741-2045.
LEGAL MATTERS
The validity of the Shares offered hereby is being passed upon for the Company
by Lyle B. Stewart, P.C., Denver, Colorado.
EXPERTS
The consolidated financial statements of the Company as of December 28, 1997 and
for each of the two years in the period ended December 28, 1997 appearing in the
Form 10-KSB have been audited by Ehrhardt Keefe Steiner & Hottman P.C.,
independent auditors, as stated in their report appearing therein, and have been
incorporated herein by reference in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing. With respect to the
unaudited interim consolidated financial information in the Company's quarterly
reports to be filed in the future on Forms 10-QSB, the independent certified
public accountants will not have audited or reviewed such consolidated financial
information and will not have expressed an opinion or any other form of
assurance with respect to such consolidated financial information.
- 17 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the issuance and distribution of the Shares being
registered hereby.
SEC Registration Fee $ 253
Blue Sky Filing Fees and Expenses 5,000*
Accountants' Fees and Expenses 2,000*
Legal Fees and Expenses 4,000*
Miscellaneous 0*
---------
TOTAL $ 11,253*
=========
- --------------------
* Estimated, subject to change.
The Company will bear all of the above expenses of the registration of the
Shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
See "INDEMNIFICATION OF OFFICERS AND DIRECTORS" in the Prospectus.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Lyle B. Stewart, P.C.
23.1 Consent of Ehrhardt Keefe Steiner & Hottman P.C.
23.2 Consent of Lyle B. Stewart, P.C. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
ITEM 17. 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:
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933, as amended (the "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 Commission
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.
(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
Registration Statement is on Form S-3, Form S-8 or Form F-3, 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
Securities and Exchange Commission (the "Commission") by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
B. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the 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 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 Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Denver, Colorado on September 29, 1998.
MEDIX RESOURCES, INC.
By /S/ JOHN P. YEROS
John P. Yeros,
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Each person whose signature appears below in so signing also makes, constitutes
and appoints John P. Yeros and David Kinsella, and each of them, his or her true
and lawful attorney-in-fact, with full power of substitution, for him in any and
all capacities, to execute and cause to be filed with the Securities and
Exchange Commission any and all amendments and post-effective amendments to this
Registration Statement, with exhibits thereto and other documents in connection
therewith, and hereby ratifies and confirms all that said attorney-in-fact or
his substitute or substitutes may do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
/S/JOHN P.YEROS President, Chief September 29, 1998
John P. Yeros Executive Officer and
Director (Principal
Executive Officer and
Principal Financial
Officer)
/S/DAVID KINSELLA Controller (Principal September 29, 1998
David Kinsella Accounting Officer)
/S/THOMAS J. OBERLE Director September 29, 1998
Thomas J. Oberle
/S/CHARLES POWELL Director September 29, 1998
Charles Powell
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -------------------------------------------
5.1 Opinion of Lyle B. Stewart, P.C.
23.1 Consent of Ehrhardt Keefe Steiner & HOttman PC
23.4 Consent of Lyle B. Stewart, P.C. (included
in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
September 30, 1998
Board of Directors
Medix Resources, Inc.
7100 E. Belleview Ave., Suite 301
Englewood, CO 80111
Gentlemen:
We have acted as counsel to Medix Reources, Inc.(the "Company") in connection
with the proposed sale by certain selling shareholders of up to 7,779,170 shares
of its common stock, par value $.001 per share, by the Company, which sale is
being registered on Form S-2 (the "Registration Statement") filed by the Company
on or about the date hereof with the Securities and Exchange Commission, under
the Securities Act of 1933, as amended.
In connection therewith, we have examined and relied upon such corporate records
and other documents, instruments and certificates and have made such other
investigation as we deem appropriate as basis for the opinion set forth below.
Based upon the foregoing, we are of the opinion that the shares of common stock
to be sold by the selling shareholders in the manner described in the
Registration Statement and the Prospectuses relating thereto, will be legally
issued, fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement and the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Lyle B. Stewart, P.C.
Lyle B. Stewart, P.C.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Medix Resources, Inc. on Form S-2 of our report dated March 18, 1998 for the
year ended December 28, 1997, appearing in Form 10-KSB of Medix Resources, Inc.,
filed with the Securities and Exchange Commission on March 30, 1998.
/s/Ehrhardt Keefe Steiner & Hottman PC
Ehrhardt Keefe Steiner & Hottman PC
September 30, 1998
Denver, Colorado
