As filed with the Securities and Exchange Commission on August 11, 2000.
Registration No. 333-71179
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Amendment No. 5
Registration Statement
Under
THE SECURITIES ACT OF 1933
Medcom USA, Incorporated
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(Exact name of registrant as specified in charter)
Delaware
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(State or other jurisdiction of incorporation)
18001 Cowan, Suite C & D
Irvine, CA 92614
65-0287558 (949) 261-6665
(IRS Employer I.D. (Address, including zip code, and telephone
Number) number of principal executive offices)
Mark Bennett
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
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(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date
of this Registration Statement
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
<PAGE>
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is 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 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
--------------------------------------------------------------------------------
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Unit (1) Price Fee (4)
-----------
Common Stock (2) 12,643,901 $0.62 $ 7,839,219 $2,066
Common Stock (3) 4,079,558 $0.62 2,529,326 $ 664
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Total $10,368,545 $2,730
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(1) Offering price computed in accordance with Rule 457(c).
(2) Shares of common stock owned by existing shareholders
(3) Shares of common stock issuable upon the exercise of warrants. These shares
of common stock may be resold by means of this registration statement.
Includes additional shares which may be issued due to adjustments to
warrants.
(4) Fees of $3,103 have previously been paid in connection with this
Registration Statement.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the conversion of the Preferred Stock or upon the exercise of the warrants
as a result of any adjustment in the number of securities issuable by reason of
the anti-dilution provisions of the Preferred Stock or the warrants.
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 l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SELLING SHAREHOLDER OFFERING PROSPECTUS
MEDCOM USA, INCORPORATED.
16,723,459 Shares of Common Stock
This prospectus relates to the sale of common stock by certain persons who
either own or have the right to acquire shares of Medcom's common stock. These
persons are sometimes referred to in this prospectus as the selling
shareholders. See the section of this prospectus entitled "selling shareholders"
for more information concerning the selling shareholders. Medcom will not
receive any proceeds from the sale of the shares by the selling shareholders.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities offered by this
prospectus or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The securities offered by this prospectus are speculative and involve a
high degree of risk. For a description of certain important factors that should
be considered by prospective investors, see "Risk Factors" beginning on page
seven of this prospectus.
The former name of Medcom was Sims Communications, Inc. In October 1999
the shareholders of Sims approved the change in the corporate name to Medcom
USA, Incorporated.
On August 7, 2000 the closing price of Medcom's common stock on the NASDAQ
SmallCap Market was $1.84 per share. Medcom's NASDAQ symbol is EMED.
The date of this prospectus is August __, 2000
<PAGE>
PROSPECTUS SUMMARY
Medcom USA, Incorporated was incorporated in August 1991 under the name
Sims Communications, Inc. The corporate name was changed to Medcom USA,
Incorporated in October 1999.
Medcom's executive offices are located at 18001 Cowan, Suite C & D, Irvine
California 92614. Medcom's telephone number is (949) 261-6665.
Medcom's initial business was the rental of cellular telephones through a
stand-alone dispensing station known as an Automated Communications Distribution
Center. Prior to 1996 Medcom operated ACDC units for its own account and also
sold franchises which provided third parties the right to operate ACDC units at
various franchised locations. At October 31, 1999, Medcom was not operating any
ACDC units and Medcom's only remaining franchisee had four ACDC units in
operation.
In December 1996 Medcom acquired all the issued and outstanding shares of
Link International, Inc., a corporation which manufactures and distributes
machines which dispense prepaid calling cards and terminals which are used by
merchants to perform a variety of transactions, including accepting credit cards
and bank debit cards in payment for sales of merchandise and services. In June
1999 Medcom sold substantially all of the assets associated with Link and
recorded a gain on the sale of approximately $2,000.
In May 1998 Medcom acquired One Medical Services, Inc., a corporation
which provides a financial processing and communications network for the home
medical equipment industry. In July 1999 Medcom licensed its rights to the One
Medical Service Network to an unrelated third party for $1,377,000, of which
$567,000 has been paid and the remainder of which ($810,000) will be paid in
accordance with the terms of an unsecured promissory note which is payable prior
to July 2006.
In January 2000 the holders of Medcom's Series C preferred shares
converted the preferred shares into 3,490,000 shares of Medcom's common stock.
In payment of accrued dividends and penalties Medcom made cash payments of
$160,567 and issued 60,000 shares of its common stock to the holders of the
Series C preferred shares. For assisting in arranging the conversion of the
preferred shares, MedCom issued 175,000 shares of common stock to Morse
Financial Consulting, Inc. The effective conversion price of the Series C
Preferred shares was $0.50 per share. The closing price of Medcom's common stock
was $0.91 per share on December 27, 1999, the date the agreement was made to
convert the Series C preferred shares.
As of the date of this prospectus substantially all of Medcom's revenues
were generated by its Justmed.com, Movie Vision and DCB divisions.
JustMed.com
The JustMed.com division involves three components:
o The Medcard health insurance verification and billing system
o The JustMed.com website
<PAGE>
o The Med Store
MedCard System
In November 1998 Medcom acquired an exclusive world wide license to
software programs and related technology known as the MedCard system. The
MedCard system is an electronic processing system which consolidates insurance
eligibility verification and processes medical claims and approvals of credit
card and debit card payments in under 30 seconds through a single, small
terminal. Using the MedCard system, health care providers are relieved from the
problems associated with eligibility confirmation and billings, healthcare
providers' reimbursements are accelerated and account receivables are reduced.
The time it takes to collect payments from insurance providers decreases from
months to days. Medcom obtains revenues from the sale of its processing
terminals and from fees received from every transaction processed by the
terminals.
As of June 30, 2000 the MedCard system was able to retrieve on-line
eligibility and authorization information from 125 medical insurance companies
and plans and electronically process and submit billings for its healthcare
providers to over 1650 companies. These insurance providers include CIGNA,
Prudential, Oxford Health Plan, United Health Plans, Blue Cross, Medicaid,
Aetna, Blue Cross/Blue Shield and Metrahealth.
The license was acquired from Dream Technologies, LLC and MedCard
Management Systems, Inc. in consideration for $450,000 in cash, 100,000 shares
of Medcom's common stock and an option, which was subsequently exercised, to
purchase an additional 350,000 shares of common stock at a price of $1.28 at any
time prior to November 10, 2001.
Medcom also agreed to pay Dream a royalty, not to exceed $250,000 per
month, equal to 25% of the net revenues derived by Medcom from the MedCard
system. Once royalties in any month reach $250,000, Medcom is obligated to pay
Dream 10% of the net revenues derived from the MedCard system during that
particular month. The term net revenues means the gross revenues received from
the use of the MedCard Systems less:
o Terminal lease costs of up to $50 per month,:
o Commissions payable to agents which place terminals with end users; and
o Network costs which include (i) claim fees payable to data vendors, (ii)
charges for verification of insurance coverage and (iii) similar
telecommunications charges related to obtaining claims processing and/or
benefits verification information.
In May 2000 the license agreement with Dream was amended such that Medcom
acquired all rights to the MedCard system including all software programs,
intellectual property, trade names and existing contracts. The amendment
effectively terminated the original License Agreement, except that the royalty
provisions of the original license agreement will remain in effect until
November 2013. In consideration for this amendment, Dream received 100,000
shares of the Medcom's restricted common stock and a warrant to purchase 400,000
shares of the Medcom's common stock at $3.57 per share at any time prior to May
11, 2003.
<PAGE>
Website
The JustMed.com website is an internet website which began functioning on
July 1, 1999. The website advertises healthcare products and services which are
available to the general public and provides medical information to the general
public. Persons in need of healthcare products and services can access the
website and order products or transfer to the more detailed websites maintained
by the companies which provide the products and services. Medcom expects to
generate revenues from this website by charging providers of healthcare products
and services fees for advertising on the website. Medcom will also receive fees
when a person transfers from Medcom's website to the websites maintained by a
provider of healthcare products or services. Medcom expects that advertisers on
its website will include distributors of healthcare equipment and products,
hospitals, physician practice groups, and clinics.
Med Store
The Med Store is a feature of Medcom's website which allows consumers to
use their computers to purchase a variety of healthcare products and services.
Items available for purchase include canes, crutches, walkers, bath chairs,
blood pressure units, cold therapies, exercise equipment and hot and cold packs.
Movie Vision
In January 1998 Medcom acquired a business known as Movie Vision from
Moviebar USA, Incorporated and Vectorvision, Incorporated. Movie Vision rents
video cassettes, primarily containing motion pictures, through automated
dispensing units in hotels. Movie Vision currently has video cassette dispensing
machines in approximately 110 hotels in the United States.
DCB Actuaries & Consultants
In April 2000, Medcom acquired 100% of the stock of DCB Actuaries &
Consultants SRO (DCB), a Czech Republic based company and certain technology and
intellectual property from DSM, LLC, a Florida limited liability company. DCB
develops and markets software programs which are used in providing information
to health care providers, hospitals, insurance companies and insurance plans.
DCB is headquartered in Brno, Czech Republic.
DCB's software systems have the following features:
o Risk Management - Actuarial analysis and projected monthly costs on a
per member basis. These features are useful for insurance companies,
managed care plans and hospitals.
o Clinical Services - Electronic patient record system, patient care pathways
and on-line medical documents. The care pathways provide a computer
generated standard treatment program based upon the patient's particular
background and symptoms, which can be compared to the actual treatment
program being used. On-line documents include x-rays, diagnostic results,
lab reports, EKGs and physician notes. This component allows a healthcare
provider to review these documents on-line, from the
<PAGE>
home or office. More than one physician in multiple locations can review the
records simultaneously, thereby improving the consultation process.
o Administrative and Management Functions - Quality assurance, claims
analysis, plan performance and market/sales analysis. The system enables
healthcare providers or managers to review their performance against
international standards and budgets or the results of other similarly
sized or located organizations. The reports can be tailored to meet the
information needs of any user.
o Patient Services - Patients will also benefit from DCB's Health
Information Gateway which will allow patients to monitor personal health
profiles in addition to their own medical treatment histories. Early
warning and reminder alerts will also be available on line.
Medcom acquired DCB and the technology from DSM for $1,900,000 in cash and
2,850 shares of Medcom's Series D Preferred Stock. In connection with these
acquisitions, Medcom incurred costs of approximately $140,000 and paid
commissions of $100,000 in cash and 37,129 shares of its common stock which
shares were valued at $150,000. Medcom also paid $250,000 to the existing
employees of DCB. The purchase price was the result of an offer made by the
sellers, and a determination by Medcom that the value of the business and assets
being acquired, viewed in light of Medcom's present and proposed operations,
exceeded the offered price.
The Offering
This prospectus relates to the sale of shares of Medcom's common stock:
o issuable upon the exercise of warrants and options which were previously
issued by Medcom, and
o held by certain persons who either purchased the shares from Medcom in
private offerings, received the shares for services provided to Medcom,
or received the shares in settlement of amounts owed to these persons by
Medcom.
The holders of the warrants and options, to the extent they exercise
the warrants or options, and the owners of the shares of common stock described
above are referred to in this prospectus as the selling shareholders. If all
warrants and options held by the selling shareholders are exercised, Medcom will
receive approximately $4,768,000, which will be used to fund Medcom's
operations. Medcom will not receive any proceeds from the sale of the shares by
the selling shareholders.
As of August 7, 2000, Medcom had 31,845,966 outstanding shares of common
stock. Assuming all warrants and options held by the selling shareholders are
exercised, there will be 35,925,524 shares of common stock issued and
outstanding. The number of outstanding shares before and after this offering
does not give effect to shares which may be issued upon the exercise and/or
conversion of other options, warrants or convertible securities previously
issued by Medcom. See "Comparative Share Data".
<PAGE>
Statement of Operations Data:
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Nine months ended
Years Ended June 30, March 31, 2000
1999 1998
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Revenue:
Telecommunications $142,672 $446,524
Financial Processing 625,801 147,533
Automated movie rentals 860,126 371,416
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Total Revenues from Intelligent
Vending Machines (1) 1,628,599 965,473 577,024
Medical transaction processing 583,777 15,478 1,634,773
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Total Revenues 2,212,376 980,951 2,211,797
Cost of Services (634,518) (523,479) (773,267)
Operating and other
Expenses (8,666,818) (7,503,483) (6,985,263)
Loss from Discontinued
Operations -- (63,737) --
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Net Loss $(7,088,960) $(7,109,748) $(5,546,733)
============ ============ ============
Balance Sheet Data:
------------------
June 30,
------------------------------------------------------
March 31,
1999 1998 2000
Current Assets $1,168,055 $787,998 $5,820,185
Total Assets 6,374,862 5,602,751 11,068,219
Current Liabilities 2,142,550 2,785,015 818,916
Total Liabilities 2,268,256 3,372,542 1,634,940
Working Capital (Deficit) (974,495) (1,997,017) 5,001,269
Shareholders' Equity 4,106,606 2,230,209 9,433,279
(1) Subsequent to June 30, 1999, Medcom classified revenues from
telecommunications, financial processing and automated movie rentals into
one category which is referred to as "Revenues from Intelligent Vending
Machines".
No common stock dividends have been declared by Medcom since its inception.
RISK FACTORS
Prospective investors should be aware that ownership of Medcom's common
stock involves risks which could adversely affect the value of their holdings of
common stock. Medcom does not make, nor has it authorized any other person to
make, any representations about the future market value of Medcom's common
stock.
The securities offered should be purchased only by persons who can afford
to lose their entire investment. Prospective investors should read this entire
prospectus and carefully consider, among others, the following risk factors in
addition to the other information in this prospectus prior to making an
investment.
<PAGE>
There can be no assurance that Medcom will be able to generate sufficient
revenues and become profitable.
Medcom has incurred losses since it was formed in 1991. From the date of
its formation through March 31, 2000, Medcom incurred net losses of
approximately $(33,000,000). During the nine months ended March 31, 2000 Medcom
had a loss of $(5,600,000). Medcom expects to continue to incur losses until
such time, if ever, as it earns net income. During the year ending June 30, 2000
Medcom was not able to pay all of its liabilities as they became due. MedCom's
independent accountants have stated in their report to MedCom's financial
statements for the year ended June 30, 1999 that due to MedCom's recurring
losses from operations there is substantial doubt as to MedCom's ability to
continue in business.
Medcom Needs Additional Capital to Continue in Business.
This offering is being made on behalf of certain selling shareholders.
Medcom will not receive any proceeds from the sale of the shares offered by the
selling shareholders. If Medcom is unable to finance the acquisition of
additional equipment needed for its operations, Medcom projects that it will
need approximately $1,000,000 in additional funding before Medcom's revenues
equals its expenses, although there is no assurance that Medcom's projections in
this regard will be accurate. There can be no assurance that Medcom will be able
to obtain additional funding, if needed, or if available on terms satisfactory
to Medcom, in which case Medcom may be unable to continue in business.
Options, Warrants and Convertible Securities issued by Medcom may result in
substantial dilution to Medcom's Shareholders.
Medcom has issued options, warrants and other convertible securities which
allow the holders to acquire up to 15,039,905 additional shares, or 47%, of
Medcom's common stock. Medcom has agreed, at its expense, to register for public
sale up to 4,079,558 shares of common stock underlying these derivative
securities. The sale of these shares over a short period of time may cause the
price of Medcom's common stock to decline. See "Comparative Share Data" for more
information concerning the derivative securities issued by Medcom.
Medcom's operations in foreign countries involves numerous risks.
As a result of Medcom's acquisition of DCB Actuaries & Consultants Medcom,
through DCB, now operates in foreign locations. As a result, Medcom is subject
to certain business risks which arise from operating in foreign countries,
including exposure to periodically volatile foreign economic, monetary and
currency conditions, compliance with foreign law and regulations as well as
issues relating to the conduct of day-to-day business in foreign language and
foreign culture business environments. Additional international considerations
include high travel costs as well as time and distance barriers in the
management and development of the business. There can be no assurance that
Medcom will be able to operate successfully in foreign countries.
<PAGE>
Medcom's need for capital may result in the issuance of additional shares of
common stock which may result in substantial dilution to Medcom's shareholders.
This offering is being made on behalf of certain selling shareholders.
Medcom will not receive any proceeds from the sale of the shares offered by the
selling shareholders. Due to Medcom's history of losses, it is likely that
Medcom's continued operations will depend upon funds received from the sale of
Medcom's common or preferred stock. The issuance of these shares and their sale,
or potential for resale, in the public market may cause the price of Medcom's
common stock to decline. There can be no assurance that Medcom will be able to
obtain additional funding, if needed, or if available on terms satisfactory to
Medcom. During the twelve months ending June 30, 2000 Medcom's outstanding
shares increased from 16,727,500 shares to 31,820,966 shares.
Prices for Medcom's Common Stock have been highly volatile and will be
influenced by a number of factors, including the depth and liquidity of the
market for Medcom's Common Stock, Medcom's financial results, investor
perceptions of Medcom, and general economic and other conditions.
There is No Assurance that Medcom's Common Stock Will Continue to be Listed on
NASDAQ.
Although Medcom's Common Stock is currently listed on the NASDAQ Small-Cap
Market, the National Association of Securities Dealers, Inc. requires, for
continued inclusion on the NASDAQ Small-Cap Market, that Medcom must maintain
$2,000,000 in tangible net worth and that the bid price of Medcom's Common Stock
must be at least $1.00.
If Medcom's securities were delisted from the NASDAQ Small-Cap Market,
Medcom's securities would trade in the unorganized interdealer over-the-counter
market through the OTC Bulletin Board which provides significantly less
liquidity than the NASDAQ Small-Cap Market. Securities which are not traded on
the NASDAQ Small-Cap Market may be more difficult to sell and may be subject to
more price volatility than NASDAQ listed securities. There can be no assurance
that Medcom's securities will remain listed on the NASDAQ Small-Cap Market.
If Medcom's Common Stock was delisted from NASDAQ, trades in such
securities may then be subject to Rule 15g-9 under the Securities Exchange Act
of 1934, which rule imposes certain requirements on broker/dealers who sell
securities subject to the rule to persons other than established customers and
accredited investors. For transactions covered by the rule, brokers/dealers must
make a special suitability determination for purchasers of the securities and
receive the purchaser's written agreement to the transaction prior to sale. Rule
15g-9, if applicable to sales of Medcom's securities, may affect the ability of
broker/dealers to sell Medcom's securities and may also affect the ability of
investors in this offering to sell such securities in the secondary market and
otherwise affect the trading market in Medcom's securities.
The Securities and Exchange Commission has rules that regulate
broker/dealer practices in connection with transactions in "penny stocks". Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume
<PAGE>
information with respect to transactions in that security is provided by the
exchange or system). The penny stock rules require a broker/dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Commission that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
stock that becomes subject to the penny stock rules.
Although Medcom's common stock has never been delisted from the NASDAQ
SmallCap market, and although as of June 30, 2000 Medcom met all conditions for
continued listing on the NASDAQ SmallCap market, Medcom's common stock has been
the subject of several NASDAQ delisting proceedings during the past three years.
Medcom's recent changes in its business may not result in profits.
During the summer of 1999 Medcom began directing its efforts towards its
JustMed.com division. The JustMed.com division is in the early stage of
development and has a limited operating history. The success of the JustMed.com
division will be dependent on convincing healthcare providers to use the Medcard
system for insurance verification and billing. There is no assurance that the
JustMed.com division will gain acceptance from healthcare providers or the
general public or that the JustMed.com division will generate any profits.
In April 2000 Medcom acquired DCB Actuaries & Consultants. The success of
Medcom's DCB division will depend upon Medcom's ability to sell DCB's software
systems to hospitals and insurance companies and plans. There can be no
assurance that Medcom's DCB division will be profitable.
There can be no assurance that Medcom will be able to compete with the numerous
other companies which are engaged in Medcom's lines of business.
There are many companies that will compete with Medcom at some level.
Competing health insurance processing systems include Envoy, Medical Manager,
Medic, Spot Check and Mediphis. Leading consumer healthcare websites include AOL
Health Channel, Thrive Online, drkoop.com, Mayo Clinic Health Oasis,
InteliHealth, Mediconsult.com, and OnHealth. Medcom anticipates that its DCB
division will compete with Eclipsys, Healtheon/Web MD, Medisoft and
McKesson/HBOC. Many of these competitors are far better capitalized than Medcom
and control significant market share in their respective industry segments.
Medcom is Dependent on the Internet and Telecommunications Carriers for its
Operations.
Medcom's website is dependent upon the ability of the general public to
use the internet.
<PAGE>
Medcom's Medcard system and certain features of DCB's systems rely on
telecommunications carriers to transmit data. A major equipment failure
affecting the systems of internet service providers or providers of
telecommunications services, or the inability of telecommunications carriers to
provide or expand their current levels of service to Medcom, could have a
material adverse effect on Medcom's operations.
Medcom may face potential liability for information carried on its website.
The legal obligations and potential liability of companies which provide
information by means of the internet are not well defined and are evolving. Any
liability of Medcom resulting from information carried on or disseminated
through its website could have a material adverse effect on its business,
operating results and financial condition.
Medcom may be unable to protect its technology.
Certain technology used by Medcom is covered by U.S. patents. There is no
assurance that any patents issued or licensed to Medcom will protect Medcom's
technology as disputes may arise between Medcom and others as to the scope and
validity of these or other patents. Any defense of the patents could prove
costly and time consuming and there can be no assurance that Medcom will be in a
position, or will deem it advisable, to carry on such a defense. With respect to
Medcom's unpatented proprietary technology, there is no assurance that others
may not acquire or independently develop the same or similar technology.
DOCUMENTS INCORPORATED BY REFERENCE
Medcom will provide, without charge, to each person to whom a copy of this
prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into this prospectus). Requests
should be directed to:
Medcom USA, Incorporated
18001 Cowan, Suite C & D
Irvine, CA 92614
(949) 261-6665
(949) 261-0323 (fax)
The following documents filed with the Securities and Exchange Commission
by Medcom (Commission File No. 0-25474) are hereby incorporated by reference
into this Prospectus:
(1) Annual Report on Form 10-KSB/A for the fiscal year ended June 30, 1999.
(2) Proxy Statement relating to October 14, 1999 Annual Meeting of
Shareholders.
(3) Proxy Statement relating to October 14, 1999 Special Meeting of
Shareholders.
<PAGE>
(4) Quarterly reports on Form 10-QSB/A for the quarters ended September 30,
1999, December 31, 1999, and March 31, 2000.
(5) Proxy Statement relating to June 27, 2000 Special Meeting of
Shareholders.
(6) Description of Medcom's common stock as contained in a registration
statement on Form 8-A and filed under the Securities Exchange Act of
1934.
All documents filed with the Securities and Exchange Commission by Medcom
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 subsequent to the date of this prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference into this
prospectus and to be a part of this prospectus from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or superseded for
the purposes of this prospectus to the extent that a statement contained in this
prospectus or in any subsequently filed document which also is or is deemed to
be incorporated by reference modifies or supersedes such statement. Such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
ADDITIONAL INFORMATION
Medcom has filed with the Securities and Exchange Commission, 450 5th
Street, N.W., Washington, D.C. 20001, a Registration Statement under the
Securities Act of l933, as amended, with respect to the securities offered by
this prospectus. This Prospectus does not contain all of the information set
forth in the Registration Statement. For further information with respect to
Medcom and such securities, reference is made to the Registration Statement and
to the exhibits filed with the registration statement. Statements contained in
this Prospectus as to the contents of any contract or other documents are
summaries, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by the actual terms of the document.
Medcom is subject to the requirements of the Securities Exchange Act of l934 and
is required to file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of the exhibits to the registration
statement, as well as copies of any reports, proxy statements and other
information filed by Medcom, can be inspected and copied at the public reference
facility maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. and at the Commission's Regional offices in New York (7 World
Trade Center, Suite 1300, New York, New York 10048) and Chicago (Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511). Copies of such material can be obtained from the Public Reference
Section of the Commission at its office in Washington, D.C. 20549 at prescribed
rates. Certain information concerning Medcom is also available at the Internet
Web Site maintained by the Securities and Exchange Commission at www.sec.gov.
COMPARATIVE SHARE DATA
As of August 7, 2000, Medcom had 31,845,966 shares of common stock
issued and outstanding. Assuming all warrants and options held by the selling
shareholders are exercised, there will be 35,925,524 shares of common stock
issued and outstanding. The following table describes the origin of the shares
offered by this prospectus.
<PAGE>
Number of Shares Note Reference
Shares outstanding as of August 7, 2000 31,845,966
Shares offered by existing shareholders 12,643,901
Shares issuable upon exercise of 113,333 A
warrants held by former Series C
Preferred shareholders.
Shares which may be acquired by sales agent. 40,500 A
Shares issuable upon exercise of warrants
sold to private investors and upon
exercise of warrants issued to sales agents
and financial consultants 3,925,725 B
Shares which will be outstanding,
assuming exercise of all options and
warrants listed above 35,925,524
Percentage of Medcom's common stock
represented by shares offered by this
prospectus, assuming the exercise of
all options and warrants listed above 47%
Other Shares Which May Be Issued:
--------------------------------
The following table lists additional shares of Medcom's common stock which
are not offered by this prospectus but may be issued as the result of the
exercise of outstanding options, warrants or the conversion of other securities
issued by Medcom:
Number Note
of Shares Reference
Shares issuable upon the exercise
of warrants sold to private
investors and upon exercise of
warrants issued to sales agents
and consultants 1,963,347 B
Shares issuable upon exercise of options 8,597,000 C
previously granted by Medcom
Additional shares issuable in connection
with the acquisition of:
One Medical Services, Inc. 1,485,000 D
MedCard System 400,000
Shares issuable upon conversion of Series D
Preferred Stock 577,000 E
A. Between November 1998 and January 1999, Medcom sold 1,700 shares of its
series C preferred stock (the "Preferred Stock") to a group of institutional
investors for $1,700,000. In
<PAGE>
connection with this offering, Medcom issued to Settondown Capital
International, Ltd., the sales agent for the offering, 45 shares of series C
preferred stock. The Series C preferred shares were subsequently converted into
3,490,000 shares of Medcom's common stock.
In connection with the issuance of the Series C Preferred Stock Medcom
also:
(i) Issued to the holders of the Series C Preferred Stock, on a pro rata
basis, warrants which collectively allow for the purchase of up to
113,333 shares of Medcom's common stock. The warrants are
exercisable at a price of $1.00 per share at any time prior to July
31, 2004.
(ii) Issued to Settondown Capital International, Ltd., warrants for the
purchase of 37,500 shares of Medcom's common stock and 14,769 shares
of common stock. The warrants for the purchase of the 37,500 shares
of common stock are exercisable at a price ranging between $1.27 and
$1.50 per share at any time prior to December 31, 2003. Settondown,
as the holder of 45 shares of the Series C preferred stock, also
received 3,000 warrants which have the same terms as the warrants
referred to in (i) above.
B. In connection with certain private offerings, Medcom sold shares of common
stock and warrants. The warrants sold in these private offerings are exercisable
at prices ranging between $0.44 and $2.17 per share and expire between November
2002 and April 2004. Medcom has also entered into a number of agreements with
various financial and other consultants. Pursuant to the terms of these
agreements, Medcom has issued to the consultants shares of common stock, plus
warrants to purchase additional shares of common stock. The warrants referred to
above are exercisable at prices ranging between $0.59 and $5.00 per share and
expire between July 2001 and April 2004. Up to 3,925,725 shares of common stock
issuable upon the exercise of warrants held by certain private investors and
consultants are being offered to the public by means of this prospectus. See
"Selling Shareholders".
C. Options are held by present and former officers, directors and employees of
Medcom. The options may be exercised at prices ranging between $0.52 and
$8.00 per share. Approximately 75% of these options are currently
exercisable.
D. Effective May 30, 1998 Medcom acquired One Medical Services, Inc. in
consideration for 142,350 shares of common stock and 187,500 warrants
exercisable at $2.00 per share at any time prior to May 30, 2003. The shares
issuable upon the exercise of these warrants are being offered for resale by
means of this prospectus. Medcom has also agreed to issue to the former owners
of One Medical up to 1,485,000 additional shares of common stock depending on
the future operating of One Medical. The number of shares to be issued each
quarter will be determined by dividing the quarterly net income of One Medical
(for each fiscal quarterly beginning June 30, 1998 and ending June 30, 2001), by
the average closing price of Medcom's common stock for the five day trading
period prior to the end of each quarter. As of August 7, 2000 Medcom had not
issued any additional shares to the former owners of One Medical.
In November 1998 Medcom acquired an exclusive world wide license to
software programs and related technology know as the MedCard system. The license
was acquired from Dream Technologies, LLC and MedCard Management Systems, Inc.
in consideration for cash, shares of Medcom's common stock and an option, which
was subsequently exercised, to
<PAGE>
purchase an additional 350,000 shares of common stock at a price of $1.28 at any
time prior to November 10, 2001. In May 2000 the license agreement was amended
such that Medcom acquired all rights to the MedCard system including all
software programs, intellectual property, trade names and existing contracts. In
consideration for this amendment, Dream received 100,000 shares of the Medcom's
restricted common stock and a warrant to purchase 400,000 shares of the Medcom's
common stock at $3.57 per share at any time prior to May 11, 2003.
E. In April 2000, Medcom issued 2,850 shares of its Series D Preferred Stock in
connection with the acquisition of DCB Actuaries & Consultants and related
technology. Each Series D Preferred share is convertible at any time at the
option of the holder into 202.43 shares of Medcom's common stock. The Series D
Preferred shares will, at Medcom's option, convert into shares of Medcom's
common stock, in the manner described above, at any time after April 15 2001 so
long as the bid price of Medcom's common stock exceeds $4.94 and the shares of
common stock issuable upon the conversion of the Series D Preferred shares are
either covered by an effective registration statement or are eligible for sale
pursuant to Rule 144 of the Securities and Exchange Commission.
The shares which are referred to in Notes A and B (limited to 3,925,725
shares in the case of Note B), as well as 12,643,901 shares owned by existing
shareholders, are being registered for public sale by means of this prospectus.
A total of 2,957,000 shares issuable upon the exercise of options, and
which are referred to in Note C, have been registered for public sale by means
of a registration statement on Form S-8 filed with the Securities and Exchange
Commission
SELLING SHAREHOLDERS
The Offering
This prospectus relates to the sale of shares of Medcom's common stock:
o issuable upon the exercise of warrants and options which were previously
issued by Medcom, and
o held by certain persons who either purchased the shares from Medcom in
private offerings, received the shares for services provided to Medcom,
or received the shares in settlement of amounts owed to these persons by
Medcom.
The holders of the warrants and options, to the extent they exercise
the warrants or options, and the owners of the common stock described above are
referred to in this prospectus as the selling shareholders. Medcom has agreed to
pay the expenses associated with registering the shares to be sold by the
selling shareholders which, as of August 7, 2000, were approximately $55,000.
Medcom has agreed with Augustine Fund, LP, Gilston Corporation Ltd., HSBC
James Capel Canada, Inc., Manchester Asset Management Ltd., Settondown Capital
International Ltd., and Tonga Partners LP to file a registration statement, of
which this prospectus is a part, to register for public sale the shares of
common stock issuable upon the exercise of the warrants held by these selling
shareholders. Medcom also agreed to keep this registration statement
<PAGE>
current until two years after the date the warrants held by these selling
shareholders are exercised.
Medcom agreed with American Nortel Communications, Inc. to file a
registration statement, of which this prospectus is a part, registering for
public sale 1,111,111 shares of common stock sold to American Nortel in October
1999. Medcom has issued 300,000 shares of common stock to American Nortel as a
penalty due to the fact that this registration statement was not declared
effective by February 15, 2000. Medcom is not required to issue any additional
shares to American Nortel with respect to the effective date of the registration
statement.
Medcom agreed with Great Neck Partners to file a registration statement,
of which this prospectus is a part, registering for public sale shares of common
stock and common stock purchase warrants sold to Great Neck Partners in January
1999. Medcom has issued 233,331 shares of common stock to Great Neck Partners as
a penalty due to the fact that this registration statement was not declared
effective by June 1999. Medcom is not required to issue any additional shares to
Great Neck Partners with respect to the effective date of the registration
statement.
Medcom has agreed with the other selling shareholders to include the
shares sold to the selling shareholders in this registration statement.
The names of the selling shareholders are:
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Alston, Patrick 1,000 1,000
American Nortel
Communications 1,411,111 200,000 1,611,111
Aron, Don and Camberg, Roy 6,250 6,250
Asian Restaurants 67,800 67,800
Augustine Fund, LP 152,000 152,000
Baker, Donald 10,000 10,000
Barghols, Kent 140,000 140,000
Baritex, Inc. 20,000 20,000
Baron, George 350 350
Benda, Russell P. 10,000 2,000 12,000
Berger, Gregg 6,858 6,858
Berger, Marvin 7,000 7,000
Bering Cape Ltd. 29,133 29,133
Bevingtion International
Management S.A. 43,750 43,750
<PAGE>
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Bhatia, Lalit 4,500 4,500
Bieler, Bruno 1,500 1,500
Big Apple Consulting 50,000 50,000
Borst, George 6,000 6,000
Brook, Philip 40,000 40,000
Burlington Securities
Corporation 250,000 250,000
Caprio, James 150,000 150,000
Carlson, Brett 20,000 20,000
Chelverton Fund Limited 150,000 70,000 220,000
Cobb, Debi 4,500 4,500
Colby, Clark A. 85,000 17,000 102,000
Colby, Clark A. Jr. 35,000 7,000 42,000
Colby, Thomas E. 35,000 7,000 42,000
Colby-Jackson, Kimberly A. 25,000 5,000 30,000
Collins, Andrew 40,000 40,000
Continental Capital & Equity
Corporation 200,000 200,000
Corchia, Robert 60,975 12,195 73,170
Corn, Dennis 3,500 3,500
Cowan, David 15,000 15,000
Crowder, Robert 19,200 19,200
Crowder, William 19,200 19,200
Cugliandro, Nicole 600 600
Denner, Keith 633,278 126,656 759,934
Dennis, W. Sam 378,000 75,600 453,600
Dieterich & Associates 23,140 23,140
Dieterich, Chris 20,856 20,856
Dietrich, Zora 57,900 40,000 97,900
Dream Technologies, Inc. 100,000 100,000
Doctor, Lori 24,000 4,800 28,800
Eickenberg, William 21,000 21,000
Elliot, Scott 40,000 40,000
Euromarket Advisory Services 30,000 30,000
Faelnar, Jeffrey 4,500 4,500
Falleo, BettyAnn 1,500 1,500
Fegen, Nicholas 190,000 1,000,000 1,190,000
Fingleson, Rodney 30,000 30,000
First Choice Money
Resources, Inc. 20,000 20,000 40,000
<PAGE>
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Fohson, Ltd. 30,000 30,000
Gales, Richard 2,100 2,100
Gales, Toni 7,432 7,432
Gallear, James 600 600
Gifts of Joy Incorporated 233,142 160,000 393,142
Gilston Corporation Ltd. 16,667 16,667
Goatley, William M. 25,000 5,000 30,000
Gonzalez, Brenda 15,000 3,000 18,000
Goslar, Chad 10,000 2,000 12,000
Great Neck Partners 233,331 133,333 366,664
Hanson, Larry 10,000 10,000
Harbor Financial 29,250 29,250
Hasan, Nabeel 20,000 4,000 24,000
Healy, Margaret 400 400
Heartland Systems Company 533,333 106,667 640,000
Herbol, Robert - Instacall 147,255 147,255
Hernandez, Maria 2,000 2,000
Hiniker, Ken 50,000 10,000 60,000
HSBC James Capel Canada, Inc. 16,667 16,667
Hughes, Michael 5,000 44,000 49,000
Iverson, Thor 50,000 10,000 60,000
Johns, Brian 10,000 10,000
Johnson Capital Consulting, Inc.100,000 100,000
Jones, John 123,428 123,428
Jones, Nancy 45,714 45,714
Kaplan, Errol 113,571 22,714 136,285
Kaplan, Lynne 20,000 20,000
Kinley, Craig 10,000 10,000
Kitay, Ruben 11,428 11,428
Knight Press 30,000 30,000
Kubba, Ammar 65,284 65,284
Kurfis, Diane 4,000 4,000
Ladd, Leon 90,020 90,020
Leiner, Melvin 15,625 15,625
Levit, Jack 800,834 800,834
Levy, Lynne 7,927 1,585 9,512
LHL Holdings 172,268 172,268
Lyon, E.B, III 12,500 12,500
Mahin, John 15,000 3,000 18,000
Manchester Asset Management Ltd. 21,666 21,666
<PAGE>
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Marenco, Luis 6,500 6,500
Market Search International Inc. 13,333 13,333
Markham Holdings Limited 43,750 43,750
Marks, Darren 15,625 15,625
Massengill, Jessee 9,600 9,600
McKay, Jeff 25,000 25,000
Meltzer, Sam 122,856 122,856
Messer, Jerry 30,000 6,000 36,000
Michael Associates 222,222 104,444 326,666
Milam, Jeb L. 10,000 10,000
Morse Financial, Inc. 350,100 350,100
Morse, Debra 20,000 20,000 40,000
Movie Bar Company USA 147,000 147,000
Muehlburger, Karl 20,000 20,000
Niemerow, Celia 4,000 4,000
Niemerow, Richard 5,000 95,625 100,625
Novembre, Lou 3,000 3,000
Nunez, Jeffrey 51,991 51,991
OAC Joint Venture, Inc. 45,714 45,714
Olszewski, Tracey 12,000 12,000
O'Neill, Claudia 5,000 5,000
Palmero, Vito 10,000 10,000
Phelps, Marsh 6,500 6,500
Piazza, Linda 6,500 6,500
Piazza, William 80,000 16,000 96,000
Picou, Deborah 70,000 70,000
Pipia, Vincent 10,368 10,368
Pizzolo, Anthony 190,000 190,000
Pizzolo, Ronald 190,000 190,000
Powell, Ann 2,500 2,500
Proskin, Arnold and Martha 25,000 5,000 30,000
Quenneville, Charles 50,000 10,000 60,000
Rabe, Brian and Felicity 36,000 36,000
Raff, Rebecca 50,000 50,000
Renna, Thomas 8,250 8,250
Rhodes, John Travis 10,000 10,000
Richmark Capital 110,000 250,000 360,000
Roark, Larry 300,000 40,000 340,000
Rook, Lisa 200,000 200,000
Ross, Christopher 10,000 10,000
<PAGE>
Shares
Which
May be Share
Acquired Shares to Owner-
Upon Ex- be Sold ship
Shares ercise of in this After
Name Owned Warrants Offering (1) Offering
---------------- -------- -------- ------------ --------
Rothstein, Richard 400,000 80,000 480,000
S.R.G. & Associates Ltd. 37,500 37,500
Sabb, Maria 3,500 3,500
Sabb, Marlo 2,500 2,500
Sandler, Jack 115,000 23,000 138,000
Santuro, Jessica 9,142 9,142
Scharf, Aron D. 36,572 36,572
Sciacca, Joseph 12,000 2,400 14,400
Seganti, Edward 25,800 5,160 30,960
Settondown Capital
International, Ltd. 14,769 40,500 55,269
Severance, Fayette 16,667 16,667
Shaifer, Carl 25,000 5,000 30,000
Simay, Lynn 28,800 28,800
Sink, James 25,000 25,000
SMP Financial Consultants 190,000 50,000 240,000
Sorg, Kevin 10,000 10,000
Spielman, Michael 6,097 1,219 7,316
Stevens, Robert 7,000 7,000
Stilger, Kenneth 25,000 5,000 30,000
Stone, David 9,142 9,142
Sullivan, Robert 25,000 25,000
Suppan, Robert 22,500 4,500 27,000
The Rockies Fund, Inc. 400,000 80,000 480,000
Thomas, William E. 200,000 40,000 240,000
Tonga Partners, LP 38,333 38,333
Trieu, Tho 3,500 3,500
Turkiewicz, Hal 7,318 1,464 8,782
United Pharmaceutical
Network, Inc. 75,000 75,000
U.S. Automotive, Inc. 246,275 160,000 406,275
Vogel, Robert W. 5,000 1,000 6,000
Wagner, James 712,764 712,764
Weitzberg, Bruce 5,000 5,000
Weldon, John P. III 10,000 10,000
Wheet, Charles 20,000 25,000 45,000
Woodard, Hall & Primm, PC 6,250 6,250
Worthington, Matthew 4,000 4,000
Yasmeh, Bruce 121,951 166,265 288,216
Yazzo, John 80,000 80,000
Zapara Inc. 45,714 45,714
Zubay, Kenneth 30,488 6,098 36,586
------------------------ -------------
<PAGE>
TOTAL 12,643,901 4,079,558 16,723,459
========== ========= ==========
(1) Assumes all shares owned, or which may be acquired, by the selling
shareholders, are sold to the public by means of this prospectus.
None of the selling shareholders will own more than 1% of Medcom's common
stock after this offering. With the exception of Burlington Securities
Corporation, Continental Capital & Equity Corporation, and Richmark Capital
Corporation, which are registered broker-dealers, none of the selling
shareholders, to the knowledge of Medcom, are broker-dealers or are affiliated
with broker-dealers.
The names of the natural persons who exercise control over those selling
shareholders which are corporations, partnerships, or similar entities are:
American Nortel Communications, Inc. Bill Williams
Asian Restaurants Morris Salem
Augustine Fund, LP Thomas Duszynski
Baritex, Inc. Joseph Riccio
Big Apple Consulting Warren White
Burlington Securities Corporation Vincent Molinari
Chelverton Fund Limited James P. Morton
Continental Capital & Equity John Manion
Corporation
Dieterich & Associates Christopher Dieterich
Dream Technologies, Inc. Michael Fufidio
Euromarket Advisory Services Deborah Picou
First Choice Money Resources, Inc. Craig Morse
Gifts of Joy Incorporated Warin Nakashima
Gilston Corporation Ltd. Dawn Davies
Great Neck Partners Marv Lyons
Harbor Financial Patrick Riccio
Heartland Systems Company Harold Carpenter
HSBC James Capel Canada, Inc. Giora Lavie
Johnson Capital Consulting, Inc. Peter Johnson
LHL Holdings, Ltd. Jack Levit
Manchester Asset Management Ltd. Dierdie M. McCoy
Market Search International, Inc. Russ Militello
Michael Associates Albert Riccardi
Morse Financial Consulting, Inc. James Morse
Movie Bar Company USA Jack Levit
OAC Joint Venture, Inc. Aron Scharf
Richmark Capital Richard Monello
S.R.G. & Associates, Ltd. Scott Griffith
Settondown Capital Anthony L.J. Inder Rieden
International, Ltd.
SMP Financial Consultants James Caprio
The Rockies Fund, Inc. Stephen Calendrella
Tonga Partners, LP Carlo Cannell
United Pharmaceutical Network, Inc. David Breslow
U.S. Automotive, Inc. Zora Speert
<PAGE>
Woodard, Hall & Primm, P.C. Stephen Andrews
Zapara, Inc. Michael Zapara
The following selling shareholders have relationships with Medcom:
Name Nature of Relationship
Bhatia, Lalit Employee of Medcom
Borst, George Employee of Medcom
Cobb, Debi Employee of Medcom
Corn, Dennis Employee of Medcom
Cugliandro, Nicole Employee of Medcom
Eickenberg, William Employee of Medcom
Falleo, Betty Ann Employee of Medcom
Healy, Margaret Employee of Medcom
Hernandez, Maria Employee of Medcom
Hughes, Michael Employee of Medcom
Kurfis, Diane Employee of Medcom
Muehlburger, Karl Employee of Medcom
Olszewski, Tracey Employee of Medcom
Piazza, Linda Employee of Medcom
Pizzolo, Anthony President of Medcom's Medcard Division.
Pizzolo, Ronald Executive Vice President of Medcom's Medcard
Division.
Powell, Ann Employee of Medcom
Stevens, Robert Employee of Medcom
Trieu, Tho Employee of Medcom
Weitzberg, Bruce Employee of Medcom
<PAGE>
Name Nature of Relationship
Worthington, Matthew Employee of Medcom
Continental Capital &
Equity Corporation Consultant - Investor Relations
Richmark Capital Corporation Sales Agent for Medcom's common stock
Baritex, Inc. Financial Consulting
Fegen, Nicholas Sales Agent for Medcom's common stock and
Investor Relations Consultant
Barghols, Kent Sales Agent for Medcom's common stock and
Investor Relations Consultant
Johnson Capital Consulting, Inc. Consultant - Justmed.com division
Big Apple Consulting Consultant - Investor Relations
Fingleson, Rodney Consultant - Justmed.com division
Fohson, Ltd. Consultant - International Markets
Caprio, James Consultant - International sale of ACDC
Machines and former officer and director of
Medcom
SMP Financial Consultants Consultant - Mergers, Acquisitions and
Investment Banking
Settondown Capital Sales Agent for Medcom's Series C Preferred
International, Ltd. Stock
Meltzer, Sam Consultant - Websites
SMP Financial Consultants Consultant - Mergers, Acquisitions and
Investment Banking
United Pharmaceutical Network, Inc. David Breslow, a director of Medcom, is the
Executive Director of United Pharmaceutical
Network, Inc.
Manner of Sale. The shares of common stock owned, or which may be
acquired, by the selling shareholders may be offered and sold by means of this
prospectus from time to time as market conditions permit in the over-the-counter
market, or otherwise, at prices and terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. These shares
may be sold by one or more of the following methods, without limitation: (a) by
a broker or dealer as agent for a selling shareholder; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this prospectus; (c)
<PAGE>
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (d) face-to-face transactions between sellers and purchasers
without a broker/dealer. In effecting sales, brokers or dealers engaged by the
selling shareholders may arrange for other brokers or dealers to participate.
Such brokers or dealers may receive commissions or discounts from selling
shareholders in amounts to be negotiated.
A Selling Shareholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of Medcom's
common stock in the course of hedging the positions they assume with such
Selling Shareholder, including, without limitation, in connection with the
distribution of Medcom's common stock by such broker-dealers. A Selling
Shareholder may also enter into option or other transactions with broker-dealers
that involve the delivery of the common stock to the broker-dealers, who may
then resell or otherwise transfer such common stock. A Selling Shareholder may
also loan or pledge the common stock to a broker-dealer and the broker-dealer
may sell the common stock so loaned or upon default may sell or otherwise
transfer the pledged common stock.
Broker-dealers, underwriters or agents participating in the distribution
of Medcom's common stock as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Shareholders and/or
purchasers of the common stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). Selling Shareholders and any broker-dealers who act in connection
with the sale of common stock hereunder may be deemed to be "Underwriters"
within the meaning of the Securities Act, and any commissions they receive may
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither Medcom nor any Selling Shareholder can presently estimate the amount of
such compensation. Medcom knows of no existing arrangements between any selling
shareholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of Medcom's common stock.
Medcom has advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the Prospectus delivery requirements under the Securities Act of
1933. Medcom has also advised the Selling Shareholders that in the event of a
"distribution" of the shares owned by the Selling Shareholder, such Selling
Shareholders, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. A "distribution" is defined in Rule 102 as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods". Medcom has also advised the Selling Shareholders that Rule 102
under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase" for
the purpose of pegging, fixing or stabilizing the price of the Common Stock in
connection with this offering. Rule 101 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the same class
as is the subject of the distribution.
<PAGE>
DESCRIPTION OF SECURITIES
Common Stock Medcom is authorized to issue 80,000,000 shares of common stock.
Holders of common Stock are each entitled to cast one vote for each share held
of record on all matters presented to shareholders. Cumulative voting is not
allowed; hence, the holders of a majority of the outstanding common stock can
elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of Medcom's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by Medcom. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock.
Preferred Stock
Medcom is authorized to issue up to 1,000,000 shares of preferred stock.
Medcom's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Delaware statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of Medcom.
In April 1995, Medcom issued 25,250 shares of Series A preferred stock.
Each Series A preferred share is convertible into 0.2 of a share of Medcom's
common stock. As of June 30, 2000, 21,000 shares of the Series A preferred stock
had been converted into shares of Medcom's common stock.
In March 1996, Medcom issued 100,000 shares of its Series B preferred
stock. Each Series B preferred share is convertible into 0.25 of a share of
Medcom's common stock. As of July 31, 1999 all shares of the Series B preferred
stock had been converted into 25,000 shares of Medcom's common stock.
Between November 1998 and January 1999 Medcom sold 1,745 shares of its
Series C preferred stock. Medcom sold these shares because it needed capital and
no other source of capital was available at that time. In January 2000, the
Series C preferred shares were subsequently converted into 3,490,000 shares of
Medcom's common stock.
In April 2000 Medcom's Board of Directors established the Series D
Preferred Stock and authorized the issuance of up to 2,900 shares as part of
this series. Medcom issued 2,850 Series
<PAGE>
D Preferred shares in connection with the acquisition of DCB Actuaries &
Consultants and the technology from DSM LLC.
Each Series D Preferred share is convertible at any time at the option of
the holder into 202.43 shares of Medcom's common stock. The Series D Preferred
shares will, at Medcom's option, convert into shares of Medcom's common stock,
in the manner described above, at any time after April 15, 2001 so long as the
bid price of Medcom's common stock exceeds $4.94 and the shares of common stock
issuable upon the conversion of the Series D Preferred shares are either covered
by an effective registration statement or are eligible for sale pursuant to Rule
144 of the Securities and Exchange Commission.
The Series D Preferred shareholders are entitled to receive cumulative
annual cash dividends of $40.00 per share payable each year on March 31. At
Medcom's option dividends may be paid in cash or in shares of Medcom's common
stock. For dividends paid in shares of common stock, the number of shares to be
issued will be determined by dividing the dollar amount of the dividends by the
average price of Medcom's common stock for the ten trading days ending three
days prior to the dividend payment date.
Each Series D Preferred share is entitled to 202.43 votes on any matter
submitted to Medcom's shareholders for their consideration and approval.
In the event of any liquidation, dissolution or winding up (voluntary or
involuntary) of Medcom, the holders of the Series D Preferred shares are
entitled to receive out of Medcom's assets available for distribution to
shareholders, and before any distribution of assets is made to holders of
Medcom's common stock, liquidating distributions in the amount of $1,000 per
share plus accumulated and unpaid dividends.
Transfer Agent
Corporate Stock Transfer, Inc., of Denver, Colorado, is the transfer agent
for Medcom's common stock.
EXPERTS
The financial statements as of June 30, 1999 incorporated by reference in
this prospectus from Medcom's annual report on Form 10-KSB/A have been audited
by Ehrhardt Keefe Steiner & Hottman PC independent auditors, as stated in their
report which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INDEMNIFICATION
Medcom's Bylaws authorize indemnification of a director, officer, employee
or agent of Medcom against expenses incurred by him in connection with any
action, suit, or proceeding to which he is named a party by reason of his having
acted or served in such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of Medcom who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in
<PAGE>
view of all the circumstances in the case, a court of competent jurisdiction
determines such person is fairly and reasonably entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, or persons controlling Medcom
pursuant to the foregoing provisions, Medcom 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.
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus. Any information or representation not contained in this prospectus
must not be relied upon as having been authorized by Medcom. This prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
Page
Prospectus Summary................................
Risk Factors......................................
Documents Incorporated by Reference...............
Additional Information............................
Comparative Share Data............................
Selling Shareholders..............................
Description of Securities.........................
Experts...........................................
Indemnification...................................
Common Stock
MEDCOM USA, INCORPORATED
PROSPECTUS
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
SEC Filing Fee $ 3,103
Blue Sky Fees and Expenses 2,000
Printing and Engraving Expenses 2,000
Legal Fees and Expenses 40,000
Accounting Fees and Expenses 3,000
Miscellaneous Expenses 4,897
----------
TOTAL $ 55,000
========
All expenses other than the S.E.C. filing fees are estimated.
Item 15. Indemnification of Officers and Directors.
-----------------------------------------
The Delaware General Corporation Law and Medcom's Bylaws that Medcom
may indemnify any and all of its officers, directors, employees or agents or
former officers, directors, employees or agents, against expenses actually and
necessarily incurred by them, in connection with the defense of any legal
proceeding or threatened legal proceeding, except as to matters in which such
persons shall be determined to not have acted in good faith and in the best
interest of Medcom.
Item 16. Exhibits
Exhibits Page Number
1 Underwriting Agreement N/A
----------------------
3.1 Certificate of Incorporation, (1)
------------------------
as amended
3.1.1 Amendment to Articles of Incorporation (1)
------------------------
3.2 Bylaws (l)
-------------------------
4.1 Incentive Stock Option Plan (5)
---------------------
4.2 Non-Qualified Stock Option Plans (5)
----------------------
4.3 Stock Bonus Plans (5)
----------------------
4.4 Designation of Series C Preferred Stock (4)
----------------------
4.5 Certificate of Designation of the Powers, (6)
----------------------
Preferences and Relative, Participating,
Optional and Other Special Rights of
<PAGE>
Preferred Stock and Qualifications,
Limitations and Restrictions thereof,
relating to Series D Cumulative
Convertible Preferred Stock.
5 Opinion of Counsel
-----------------
10 Series C Preferred Stock Purchase Agreement,
Escrow Agreement, Registration Rights Agreement (4)
and Form of Warrant ----------------
10.1 Agreement relating to acquisition of
Medcard System Previously filed
10.2 Agreement relating to sale of assets of Link
International Previously filed
10.3 Employment Agreement with Mark Bennett Previously filed
10.4 Employment Agreement with Michael Malet Previously filed
10.5 July 1999 Licensing Agreement relating (5)
----------------
to One Medical System.
10.6 Shareholder Agreement dated March 31, (6)
----------------
2000 between Medcom USA, Inc. and
Vladimir Havlena.
10.7 Shareholder Agreement dated March 31, (6)
----------------
2000 between Medcom USA, Inc. and
Vladimir Kanovsky.
10.8 Shareholder Agreement dated March 31, (6)
2000 between Medcom USA, Inc. and Petr Hamza. ----------------
10.9 Shareholder Agreement dated March 31, 2000 (6)
between Medcom USA, Inc. and Martin Chvatal. ----------------
10.10 Shareholder Agreement dated March 31, 2000 (6)
between Medcom USA, Inc. and Pavel Juranek. ----------------
10.11 Shareholder Agreement dated March 31, 2000 (6)
between Medcom USA, Inc. and Karel Barak. ----------------
10.12 Supplement to Shareholder Agreement, dated (6)
April 13, 2000, between Medcom USA, Inc. and
Vladimir Kanovsky. ----------------
10.13 Supplement to Shareholder Agreement, dated (6)
April 13, 2000, between Medcom USA, Inc. and ----------------
Petr Hamza.
<PAGE>
10.14 Supplement to Shareholder Agreement, dated (6)
April 13, 2000, between Medcom USA, Inc. and ----------------
Martin Chvatal.
10.15 Supplement to Shareholder Agreement, dated (6)
April 13, 2000, between Medcom USA, Inc. and ----------------
Pavel Juranek.
10.16 Supplement to Shareholder Agreement, dated (6)
April 13, 2000, between Medcom USA, Inc. and ----------------
Karel Barak.
10.17 Share Purchase Agreement dated as of April 15, (6)
2000 by and among DCB Actuaries and ----------------
Consultants, SRO, David Robinson, Vladimir
Havlena and Medcom USA, Inc.
10.18 Technology Purchase Agreement dated as of (6)
April 15, 2000 by and between DSM, LLC and ----------------
Medcom USA, Inc.
10.19 Amendment to License Agreement between
Dream Technologies, LLC, MedCard Management ----------------
Systems, Inc. and MedCom USA, Incorporated.
23.1 Consent of Hart and Trinen _______________
23.2 Consent of Ehrhardt Keefe Steiner & Hottman, PC _______________
24. Power of Attorney Included as part of the
Signature Page
(1) Incorporated by reference to the same exhibit filed as part of Medcom's
Registration Statement on Form SB-2 (Commission File No. 33-70546-A).
(2) Incorporated by reference, and as same exhibit number, from Registration
Statement on Form SB-2 (Commission File Number 33-70546-A).
(3) Incorporated by reference, and as same exhibit number, from Amendment No. 1
to Registration Statement on Form SB-2 (Commission File Number 33-70546-A).
(4) Incorporated by reference, and as same exhibit number, from the Company's
report on 8-K dated December 14, 1998.
(5) Incorporated by reference to the same exhibit filed with the Company's
Annual Report on Form 10-KSB/A for the year ending June 30, 1999.
(6) Incorporated by reference to the same exhibit filed with the Company's 8-K
Report dated April 15, 2000.
<PAGE>
Item 17. Undertakings.
------------
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 l0(a)(3) of the
Securities Act of l933; (ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement, including
(but not limited to) any addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of l933, 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.
Insofar as indemnification for liabilities arising under the Securities
Act of l933 may be permitted to directors, officers and controlling persons of
the Registrant, 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 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 of 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>
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on the 11th day of
August, 2000.
MEDCOM COMMUNICATIONS INC.
By: /s/ Mark Bennett
-------------------------------
MARK BENNETT, President
By: /s/ Alan Ruben
-------------------------------
ALAN RUBEN, Principal Financial Officer
and Chief Accounting Officer
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Mark Bennett
Mark Bennett Director August 11, 2000
/s/ Michael Malet
Michael Malet Director August 11, 2000
/s/ David Breslow
David Breslow Director August 11, 2000
Julio Curra Director
