Lyle B. Stewart, P.C.
3751 South Quebec Street
Denver, Colorado 80237
Telephone: 303-267-0920
Fax: 303-267-0922
January 11, 2000
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549-1004
Re: Medix Resources, Inc.
Commission File No. 0-24768
Definitive Proxy Material
Dear Sir or Madam:
On behalf of my client, Medix Resources, Inc. (the "Corporation"), and
pursuant to Rule 101(a)(1)(iii) under Regulation S-T promulgated by the U.S.
Securities and Exchange Commission, we are filing herewith the definitive copy
of the Proxy Statement and form of Proxy Card relating to the upcoming special
meeting of the shareholders of the Corporation, scheduled for February 14, 2000.
The form of Proxy Card is attached at the end of the enclosed definitive Proxy
Statement. The Corporation intends to release the definitive Proxy Statement to
its shareholders' on or about January 13, 2000. At that time, the Company will
mail the definitive Proxy Statement to its shareholders of record on January 10,
2000.
If you have any questions with respect to this filing, please contact
the undersigned at the telephone number above.
Very truly yours,
/s/ Lyle B. Stewart
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No.__ ]
Filed by Registrant [x]
Filed by a Party other than the Registrant [ ] Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [x] Definitive Proxy Statement [ ] Definitive Additional
Materials [ ] Soliciting Material Pursuant to ss. 240.14a- 11(c) or ss.
240.14a-12
Medix Resources, Inc.
(Name of Registrant as Specified in Its Charter)
Medix Resources, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. Set forth amount on which
filing fee is calculated and state how it was determined:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
2
<PAGE>
MEDIX RESOURCES, INC.
7100 E. Belleview Ave., Suite 301
Englewood, Colorado 80111
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 14, 2000
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of Medix
Resources, Inc., a Colorado corporation (the "Company"), will be held at 7100
East Belleview, Suite 301, Englewood, Colorado, 80111 on Monday, February 14,
2000 at 10:00 a.m., local time, for the following purposes:
1. To approve an amendment of the Company's Articles of Incorporation to
increase the number of authorized shares of Common Stock from
50,000,000 to 100,000,000; and
2. To transact such other business as may properly come before the
Special Meeting or any adjournments(s) thereof.
The Board of Directors has fixed the close of business on January 10, 2000
as the record date (the "Record Date") for determining the Shareholders entitled
to receive notice of, and to vote at, the Special Meeting.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, YOU ARE URGED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY SHAREHOLDER ATTENDING
THE SPECIAL MEETING MAY VOTE IN PERSON IF SUCH SHAREHOLDER HAS PREVIOUSLY
RETURNED A PROXY.
By Order of the Board of Directors
David Kinsella
Secretary
Englewood, Colorado
January 11, 2000
<PAGE>
MEDIX RESOURCES, INC.
7100 E. Belleview Ave., Suite 301
Englewood, Colorado 80111
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 14, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Medix Resources, Inc., a Colorado corporation (the "Company"), for use at the
Special Meeting of Shareholders to be held on Monday, February 14, 2000 at 10:00
a.m., local time, or at any adjournment(s) thereof, for the purposes set forth
herein and in an accompanying Notice of Special Meeting of Shareholders. The
Special Meeting will be held at the Company's offices at 7100 East Belleview,
Suite 301, Englewood, Colorado, 80111. The Company's telephone number is (303)
741-2045. These proxy solicitation materials were mailed on or about January 13,
2000 to all Shareholders listed in the Shareholder records of the Company as of
the Record Date (as that term is defined below). The Company will bear the cost
of this solicitation.
Record Date and Share Ownership
Shareholders of record at the close of business on January 10, 2000 (the
"Record Date") are entitled to vote at the Special Meeting. At the Record Date,
29,911,191 shares of the Company's common stock, $0.001 par value per share (the
"Common Stock"), were outstanding. Shareholders holding at least one-third of
all shares of Common Stock represented in person or by proxy, shall constitute a
quorum for the transaction of business at the Special Meeting.
Revocability of Proxies
Any Proxy given pursuant to this solicitation may be revoked by the person
or entity giving it at any time before its use by delivering to the Company a
written notice of revocation or a duly executed Proxy bearing a later date or by
attending the Special Meeting and voting in person. An appointment of proxy is
revoked upon the death or incapacity of the Shareholder appointing the proxy if
the Secretary or other officer or agent of the Company who is authorized to
tabulate votes receives notice of such death or incapacity before the proxy
exercises his authority under the appointment.
Voting and Solicitation
Each outstanding share of Common Stock shall be entitled to one (1) vote on
each matter submitted to a vote at the Special Meeting. The proposed amendment
to the Company's Articles of Incorporation increasing the Company's authorized
shares of Common Stock will be approved by the shareholders if the number of
votes cast for the proposed amendment exceeds the number of votes cast against
the proposed amendment, assuming a quorum is present. Abstentions and broker
non-votes shall be counted towards the presence of a quorum. However, they will
not be counted and will have no effect in the voting on the proposed amendment.
The principal executive offices of the Company are located at 7100 E. Belleview
Ave., Suite 301, Englewood, Colorado 80111. In addition to the use of the mails,
proxies may be solicited personally, by telephone or by facsimile, and the
Company may reimburse brokerage firms and other persons holding shares of the
Company's Common Stock in their names or in the names of their nominees, for
their reasonable expenses in forwarding proxy solicitation materials to the
beneficial owners.
1
Proposals to Be Brought Before the Special Meeting
Proposals to be voted on at the Special Meeting include: (i) the approval
of an amendment to the Company's Articles of Incorporation to increase the
number of authorized shares of Common Stock from 50,000,000 to 100,000,000,
which has been proposed by the Board of Directors; and (ii) the transaction of
such other business as may properly come before the Special Meeting or any
adjournment(s) thereof.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of January 10, 2000 by (i) each person known by the
Company to own beneficially more than 5 % of the outstanding shares of Common
Stock. (ii) each director and each named executive officer and (iii) all
executive officers and directors as a Group. Shares not outstanding but deemed
beneficial1y owned by virtue of the right of any individual to acquire shares
within 60 days are treated as outstanding only when determining the amount and
percentage of Common Stock owned by such individual. Each person has sole voting
and investment power with respect to the shares shown, except as noted.
Name, Address and Position Number of Shares Percentage of Class
- ----------------------------- ------------------ ---------------------
John P. Yeros,
Executive Officer and 2,639,768(1) 7.3%
Director
7100 East Belleview
Ave, Suite 301,
Englewood, Colorado
80111
Samuel H. Havens, 200,000(2) 0.6%
Director
151 Noe Avenue
Chatham, New Jersey
07928
John T. Lane, Director 400,000(2) 1.1%
94 Sixth Street
Garden City, New York
11530
Dr. Brian McLean, 521,914(1) 1.4%
Director
660 Madison Avenue
New York, New York
10021
John R. Prufeta,
Executive Officer and 998,000(1) 2.8%
Director
305 Madison Avenue
New York, New York
10165
Thomas J. Oberle, 563,250(2) 1.6%
Director
7100 East Belleview
Ave, Suite 301,
Englewood, Colorado
80111.
Dr. David Skinner, 200,000(2) 0.6%
Director
525 East 68th Street
New York, New York
10021
All directors and executive
officers as a group (8 persons) 6,357,932 17.5%
(1)The number of shares beneficially owned by Mr. Yeros includes 2,509,768
shares subject to currently exercisable warrants and options, by Dr. McLean
includes 250,000 shares subject to currently exercisable warrants and
options, and by Mr. Prufeta includes 812,500 shares subject to currently
exercisable warrants and options or the conversion of convertible preferred
stock.
(2)All shares beneficially owned by these individuals can be currently acquired
by the exercise of stock options and warrants or the conversion of
convertible preferred stock.
<PAGE>
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors has determined that it is in the best interest of
the Company to amend the Company's Articles of incorporation to increase the
number of authorized shares of the Company's Common Stock from 50,000,000 to
100,000,000. The text of the proposed Articles of Amendment is attached hereto
as Exhibit A. As of January 10, 2000, there are 29,911,191 shares of the
Company's Common Stock outstanding, leaving 20,088,809 shares of Common Stock
authorized but unissued. However, as of January 10, 2000, the Company had
entered into commitments to issue (i) 7,697,877 shares of its Common Stock upon
the exercise of outstanding options, (ii) 19,878,626 shares of its Common Stock
upon the exercise of warrants, (iii) 5,509,111 shares of its Common Stock upon
the conversion of outstanding Preferred Stock of the Company, and (iv) 400,000
shares of its Common Stock upon the conversion of outstanding Promissory Notes.
Further, an additional 4,692,123 shares, under four Company stock option plans,
may be issued upon the exercise of options yet to be granted. These commitments,
in the aggregate, obligate the Company, on a contingent basis, to issue up to
38,177,737 shares of the Company's Common Stock, while it has only 20,088,809
shares of authorized and unissued Common Stock out of which it can satisfy such
obligation.
In addition to satisfying the Company's current commitments as described
above, the Company will be required to raise additional capital to pay off
current and long-term liabilities, to finance its operations and to finance the
development of its subsidiary's Cymedix software products. The purpose of the
proposed Amendment includes providing the Company with greater flexibility in
financing such cash requirements. Currently, the Company is restricted in its
financing options due to the limited amount of authorized but unissued shares of
Common Stock provided for in its Articles of Incorporation. The Board of
Directors has determined that the Company's Articles of Incorporation must
authorize additional shares of Common Stock that may then be issued as approved
by the Company's Board of Directors. The Company is currently discussing
financing opportunities with one or more investment banking firms. Such
discussions involve possible securities offerings that would require the
reservation of up to 25,000,000 authorized but unissued shares of common stock
to support such an offering. As of the date of this Proxy Statement, no
agreement to do such an offering has been entered into by the Company.
The Company's shareholders will have no appraisal rights under Colorado
law with respect to the Amendment or any equity financing that the Company may
undertake after its adoption. In addition, shareholders do not have any
preemptive rights to participate in any future issuance of Common Stock, and
therefore will suffer dilution of ownership upon such issuance. The issuance of
additional shares could also have the effect of diluting the earnings per share
and book value of existing shares of Common Stock. Although the authorization of
the additional shares is not intended as an anti-takeover device, the additional
shares could be used to dilute the stock ownership of persons seeking to gain
control of the Company, which could preclude existing shareholders from taking
advantage of such a situation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' APPROVAL OF THE ARTICLES OF
AMENDMENT TO THE ARTICLES OF INCORPORATION. SUCH AMENDMENT SHALL BE APPROVED IF
A PLURALITY OF THE SHARES REPRESENTED AT THE SPECIAL MEETING VOTE IN FAVOR OF
THE AMENDMENT.
OTHER MATTERS
Management knows of no other matters to be submitted to the Special
Meeting. If any other matters properly come before the Special Meeting, it is
intended that the person named in the enclosed form of Proxy will vote such
Proxy in accordance with his reasonable judgment.
By Order of the Board of Directors
DATED: January 11, 2000
2
ARTICLES OF AMENDMENT Exhibit A
TO
ARTICLES OF INCORPORATION
OF
MEDIX RESOURCES, INC.
Pursuant to the provisions of the Colorado Business Corporation Act, as
amended (the "Act"), Medix Resources, Inc., a corporation organized under the
laws of the State of Colorado, by its President, does hereby certify as
follows:
1. The name of the Corporation is Medix Resources, Inc.
2. The Board of Directors of said Corporation has consented to, authorized
by unanimous written consent, and passed resolutions declaring that the
amendment to the Articles of Incorporation contained herein is advisable and
decided to present such amendment to the shareholders of the Corporation at the
Special Meeting of shareholders.
3. Upon notice given to each shareholder of record entitled to vote on such
amendment to the Articles of Incorporation in accordance with the requirements
of the Act, the Special Meeting of the shareholders of the Corporation was held
on February 14, 2000, at which meeting holders representing a quorum were
present in person or represented by proxy, and the number of votes cast for the
amendment by each voting group entitled to vote separately on the amendment was
sufficient for approval by the voting group.
4. The amendment approved was as follows:
Section I of Article IV of the Corporation's Articles of Incorporation is
amended in its entirety to read as follows:
ARTICLE IV
CAPITAL STOCK
Section 1. Classes and Shares Authorized. The total number of shares of
Common Stock that the Corporation shall have authority to issue is One Hundred
Million (100,000,000) shares of Common Stock, $0.001 par value per share. The
total number of shares of Preferred Stock that the Corporation shall have
authority to issue is Two Million Five Hundred Thousand (2,500,000) shares of
Preferred Stock, $1.00 par value per share.
IN WITNESS WHEREOF, Medix Resources, Inc. has caused these Articles of
Amendment to Articles of Incorporation to be signed by its President,
effective as of the date of filing of these Articles of Amendment to Articles
of Incorporation with the Secretary of State of the State of Colorado.
MEDIX RESOURCES, INC.
By: _____________________
John P. Yeros
Its: President
<PAGE>
[Form of Proxy Card]
MEDIX RESOURCES, INC.
7100 East Belleview Ave., Suite 301
Englewood, Colorado 80111
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
February 14, 2000
The undersigned hereby appoints each of John P. Yeros and David Kinsella,
individually, as proxy and attorney-in-fact for the undersigned, with full
power of substitution, to vote on behalf of the undersigned at the Company's
Special Meeting of Shareholders to be held on February 14, 2000 and at any
adjournment(s) or postponement(s) thereof, all shares of the Common Stock,
$.001 par value, of the Company standing in the name of the undersigned or
which the undersigned may be entitled to vote as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" ITEM 1. In their discretion, the proxies are authorized
to vote upon such other business as may properly come before the Special
Meeting or any adjournments or postponements thereof, in accordance with
their reasonable judgment. This proxy when duly executed revokes any proxy or
proxies heretofore given by the undersigned. THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS.
1. To approve the proposal of the Board of Directors to amend the Articles of
Incorporation to increase the authorized number of shares of common stock of
the Company from 50,000,000 to 100,000,000:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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[Reverse Side]
Please sign exactly as name appears at left:
Signature:_______________________________________
Signature (if held
jointly):________________________________________
Date: ___________________________________________
When shares are held by joint tenants, both must sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in the corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
