As filed with the Securities and Exchange Commission on February 13, 2002
Registration no. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
Registration Statement
Under the Securities Act of 1933
CYBERCARE, INC.
(Exact name of Registrant as specified in its charter)
Florida 65-0158479
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
Steven M. Cohen
2500 Quantum Lakes Drive, Suite 1000 Chief Financial Officer
Boynton Beach, Florida 33426 2500 Quantum Lakes Drive, Suite 1000
(561) 742-5000 Boynton Beach, Florida 33426
(Address, including zip code, and (561) 742-5000
telephone number, including (Name, address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of agent for service)
NON-QUALIFIED STOCK OPTIONS UNDER AGREEMENTS WITH
JOHN HAINES, STEPHEN XENAKIS AND VINCENT COLWELL
(Full Title of the Plans)
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COPY TO:
Joel D. Mayersohn, Esq.
Atlas Pearlman, P.A.
350 E. Las Olas Boulevard, Suite 1700
Ft. Lauderdale, Florida 33301
Phone (954) 763-1200
Fax (954) 766-7800
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CALCULATION OF REGISTRATION FEE
==========================================================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT BEING OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE
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Common Stock, par value
$.0025 per share 400,666 $.54 $216,360 $19.91
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TOTAL $19.91
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
number of shares of the issuer's Common Stock registered hereunder will be
adjusted in the event of stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h), on the basis of the average high
and low prices as reported by the Nasdaq National Market on February 12,
2002.
PROSPECTUS
CYBERCARE, INC.
----------------------
400,666 SHARES
COMMON STOCK
----------------------
This prospectus forms a part of a registration statement covering an
aggregate of 400,666 shares of Common Stock of CyberCare, Inc. ("CyberCare", the
"Company", "we", "us" or "our"). The shares may be issued upon the exercise of
non-qualified stock options to purchase shares of our Common Stock granted to
three persons who, at the time of grant, were our employees. Individuals who are
issued shares covered by this prospectus are sometimes collectively referred to
as "selling security holders". Selling security holders may sell all or a
portion of the shares covered by this prospectus, from time to time, in the
over-the-counter market, in negotiated transactions, directly or through brokers
or otherwise, and at market prices prevailing at the time of such sales at
negotiated prices.
We will not receive any portion of the proceeds resulting from the sale of
the shares offered by the selling stockholder under this prospectus. We will pay
all costs and expenses incurred in connection with the registration of the
shares. The selling stockholders will pay the costs associated with any
subsequent sales of the registered shares, including any concessions,
commissions, fees and applicable transfer taxes.
Our common stock is quoted on the Nasdaq National Market under "CYBR". On
February 12, 2002, the last reported sales price of the Company was $.56 per
share.
AN INVESTMENT IN THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVES A
HIGH DEGREE OF RISK. CONSIDER CAREFULLY THE RISK FACTORS APPEARING ON PAGE 7.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OF THE
SECURITIES TO BE ISSUED UNDER THIS PROSPECTUS OR DETERMINED THAT THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is February 13, 2002
i
TABLE OF CONTENTS
Where You Can Find More Information....................................... 1
Incorporation of Documents By Reference................................... 1
Business ................................................................. 2
Risk Factors.............................................................. 6
Selling Security Holders.................................................. 18
Plan of Distribution...................................................... 19
Resale of Shares by Affiliates............................................ 19
Legal Matters............................................................. 20
Experts................................................................... 20
Indemnification........................................................... 20
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT THE COMPANY THAT DIFFERS FROM, OR ADDS TO, THE INFORMATION
IN THIS PROSPECTUS OR IN OUR DOCUMENTS THAT ARE PUBLICLY FILED WITH THE SEC.
ACCORDINGLY, IF ANYONE DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION YOU
SHOULD NOT RELY ON IT.
IF YOU ARE IN A JURISDICTION WHERE IT IS UNLAWFUL TO BUY THE SECURITIES
OFFERED BY THE PROSPECTUS, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO
DIRECT SUCH ACTIVITIES, THEN THE OFFER PRESENTED BY THIS PROSPECTUS DOES NOT
EXTEND TO YOU.
ii
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
("SEC"). You may read and copy any document we file at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C., and at its offices
in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for more information on the operation of the public reference
rooms. Copies of our SEC filings are also available to the public from the SEC's
web site at HTTP://WWW.SEC.GOV.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below, any of such documents filed since the date this
registration statement was filed and any future filings with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act until the offering is
completed:
* annual report on Form 10-KSB for the fiscal year ended December 31,
2000.
* proxy statement filed on May 9, 2001, for our annual meeting of
shareholders.
* quarterly reports on Forms 10-Q for the periods ended March 31,
2001, June 30, 2001, and September 30, 2001.
* our current reports on Form 8-K filed on June 1, 2001, June 28,
2001, September 17, 2001, October 15, 2001, October 31, 2001,
January 15, 2002, January 16, 2002 and February 11, 2002.
* our registration statement on Form S-3 filed on November 23, 2001.
* our registration statement on Form S-3 amendment #1 filed on
December 17, 2001.
* our registration statement Form S-3 amendment #2 filed on January
18, 2002.
* our registration statement Form S-3 amendment #3 filed on February
12, 2002.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address and telephone number:
Corporate Secretary
CyberCare, Inc.
2500 Quantum Lakes Drive, Suite 1000
Boynton Beach, Florida 33426-8308
Telephone (561)742-5000
1
BUSINESS
CyberCare's operations consist of three separate and distinct businesses:
Institutional pharmacy whose operations support assisted living and
similar long- term care facilities;
Physical therapy and rehabilitation group focusing on occupational,
physical and speech therapy; and
Technology focused on the development and introduction of patented
products and services used in remote monitoring, care and
communication between patients, caregivers and other people included
in the healthcare continuum.
We have disclosed our intention to sell all non-technology entities and
focus exclusively on the technology division moving forward.
Our technology division is a tele-health solutions company improving the
delivery of care through its products and services. Tele-health is the remote
monitoring and delivery of care via specially designed hardware and software,
through standard telephone lines and/or broadband connectivity, either directly
or in a network-based environment over the Internet. Product offerings focus on
tools that enable health plans, home health, disease management agencies,
employers, hospital systems, HMO's, insurers and other risk bearing
organizations to better manage the cost of care through wellness and disease
management programs.
We create an online interactive community that incorporates all members of
the care team in the healthcare delivery process, resulting in cost reductions
and the improvement in the quality of patient care. Utilizing patented
technology for the remote monitoring and real-time interactive communication
between patients and caregivers, the CyberCare System(TM) allowS for effective
and efficient electronic disease management, including automatic data
collection, case management, and personal interaction. The CyberCare System,
which consists of the Electronic HouseCall(TM) family oF products ("EHC"), the
CyberCare 24 Network(TM), and the CyberHealth Manager(TM), provides a complete
package of tele-health products and services for patients, caregivers and
payors. We are committed to quality and our solutions are global in nature. We
intend to market our products and services in foreign markets via a series of
joint venture partnerships with local organizations that understand local health
care delivery issues and which have a strong local presence, appropriate
infrastructure and relationships with industry and government.
Our proprietary software application is the Electronic HouseCall
application that is running on the EHC patient and provider line of products
that include videoconferencing and medical measurement capabilities. This
software application was originally developed at Georgia Tech and further
modified by us. The software application implements the patented technology that
was licensed to us from Georgia Tech and the Medical College of Georgia. The
patent (US Patent No. 5987519 titled "Telemedicine system using voice video and
data encapsulation and de-encapsulation
2
for communicating medical information between central monitoring stations and
remote patient monitoring stations") secures all telemedicine applications that
use packet-based technology to simultaneously exchange voice, video, and medical
data. Also incorporated in the software application is the technology secured by
US Patent No. 6112224 titled "Patient monitoring station using a single
interrupt resource to support multiple measurement devices" as well as
technology secured by multiple patents pending.
Our CyberCare System is comprised of monitoring devices (units) and
peripheral medical devices designed for use by patients and units designed for
use by care providers. Units and peripherals determined to be medical devices
have received marketing approval by the United States Food and Drug
Administration ("FDA") as described below. Other units are not subject to FDA
regulatory approval or, because they have been determined to be line extensions
of a "cleared" unit, do not require additional regulatory approval.
PATIENT UNITS
EHC100: This unit is a general-purpose telecommunications device for use by
patients and is not regulated by the FDA. It uses standard telephone lines and
is intended for use by an unassisted patient in his or her residence. The unit
allows the patient to use certain peripheral medical devices and take their own
vital signs measurements, such as blood pressure, blood glucose level and body
weight. The unit then transmits the measurements to a database that resides on
the CyberCare 24 Network(TM) for review, analysis anD appropriate action by a
care provider.
EHC1500: The EHC1500 is a variation of the EHC100 that uses a pocket PC
platform, thereby allowing greater portability and flexibility of use. It can be
configured to handle up to three peripheral medical devices, including a blood
pressure cuff, weight scale and blood glucose meter. It communicates and
transmits the vital signs data through the CyberCare 24 Network using a standard
telephone line or by wireless connection.
EHC400: This patient unit has received FDA marketing clearance and uses
broadband telecommunication services to connect to the CyberCare 24 Network. It
allows the patient to interact with care providers (such as a physician, nurse,
physician assistant, care manager, etc.) situated in another location in a
"virtual housecall" through an audio-visual videoconference, and allows the
patient, using various peripheral medical devices, to collect and transmit his
or her own medical measurements (such as blood pressure, using a
sphygmomanometer; temperature, using an electronic oral thermometer; blood
oxygen saturation and pulse, using a pulse oximeter; blood glucose (sugar)
level, using a glucometer; body weight, using an electronic weight scale; and/or
heart, lung and bowel sounds, using an electronic stethoscope) through the
CyberCare 24 Network for immediate or later review by care providers.
EHC300: This patient unit is similar to the EHC400, but only permits
audio-visual videoconferencing without the addition of peripheral medical
devices or vital sign data collection. It communicates with care provider units
via the CyberCare 24 Network using standard telephone lines
3
and has the capability to engage in multipoint conferences with other units
through the CyberCare 24 Network.
EHC350: Similar to the EHC400, this patient unit combines the audio-visual
videoconferencing capabilities of the EHC300 with peripheral medical device
availability and patient vital signs data collection through a special module to
accommodate the peripheral devices. The Model 350 is equipped with a module for
accommodating the connection of peripheral devices and communicates and
transmits data through the CyberCare 24 Network using standard telephone lines.
EHC2000: This is a more advanced, compact and lightweight version of the EHC400
which supports the use of peripheral medical devices including "plug and play"
USB ports. It also features a magnetic card reader and can use either standard
analog telephone lines or broadband telecommunications service to communicate
and transmit data via the CyberCare 24 Network.
EHC2050: This patient unit is a variation of the EHC 2000 and uses standard
telephone lines to communicate and transmit data either using the routed
architecture of the CyberCare 24 Network or directly (in a "point-to-point"
manner) to a care provider using either an EHC650 or EHC1650 care provider unit.
CARE PROVIDER UNITS
EHC600: The EHC600 care provider workstation unit has received FDA marketing
clearance and uses broadband telecommunications service to allow care providers
to conduct a "virtual housecall" and interact with a remotely situated patient
in an audio-visual videoconference. Incorporating the Cyber HealthManager
software, this unit also allows care providers to initiate collection of certain
patient vital signs measurements during a "virtual housecall" as well as review
patient vital sign measurements and snapshot images (such as for wound care
treatment) transmitted by a patient unit through the CyberCare 24 Network. This
unit enables the care provider to assess patient status, analyze patient data
and develop reports through its various software capabilities.
EHC650: This unit has the same features as the EHC600, except that it
communicates directly with an EHC2050 patient unit (in a "point-to-point"
manner) rather than through the routed architecture of the CyberCare 24 Network.
EHC1600: This care provider unit is a laptop version of the EHC600 workstation,
but uses either standard analog telephone lines or broadband telecommunications
service to communicate via the CyberCare 24 Network.
EHC1650: This model is similar to the EHC1600 except that it utilizes standard
analog telephone lines to communicate directly (in a "point-to-point" manner)
with patient units having videoconferencing capabilities. The EHC1650 uses a
stand-alone database and can be connected with the CyberCare 24 Network as
needed for periodic software and database updates.
4
EHC1625: This care provider unit is a scaled-down, hand-held version of the
EHC600 and uses pocket PC platform. It is a care management device that enables
the care provider to remotely monitor patient vital sign data transmitted from a
patient unit. It does not permit direct interaction or video conferencing with a
patient. It is web-enabled and operates either in a wireless environment or
using standard analog telephone lines to communicate via the CyberCare 24
Network.
EHC3000 CARE MANAGEMENT SOFTWARE: This is a web-enabled software platform that
allows the care provider access, via the internet and a secure home page, to the
data on the CyberCare 24 Network database transmitted from patient units. It
operates on any computer with Internet access that utilizes an industry standard
browser and can provide electronic mail notifications to care providers
regarding a patient's condition based on programmable ranges and/or thresholds
determined by the care provider.
PERIPHERAL MEDICAL DEVICES AND SOFTWARE APPLICATIONS
A number of peripheral medical devices are used in connection with certain
EHC patient units, some of which we obtain commercially from medical device
suppliers and others which we have developed ourselves. We have developed
certain medical devices and software applications as principle components of the
CyberCare System and have received FDA marketing clearance on such items as
follows:
Weight Scale - FDA marketing clearance obtained.
Blood Glucose Meter - FDA marketing clearance obtained.
Electronic Stethoscope - FDA marketing clearance obtained.
Blood Pressure Cuff (Sphygmomanometer) - FDA marketing clearance obtained.
Pulse Oximeter - FDA marketing clearance obtained.
Electronic Oral Thermometer - FDA marketing clearance obtained
Spirometer - Application for FDA marketing clearance in progress.
Medication Compliance Option - Application for FDA marketing clearance in
progress.
The CyberCare System has a very flexible configuration and system design,
allowing the EHC products to meet various application requirements and
conditions for different market segments. The products and services may be
combined in a fully network-based- system or in a point-to-point configuration.
In addition to workstation type units, the CyberCare System includes web-based,
mobile and hand-held EHC units for both the caregiver and the patient so they
are not constrained by the boundaries of home, office or expensive stand-alone
equipment. All the EHC products conform to industry standards and may be
integrated into customer workflow and data management operating systems.
Significant attention in the design process has been devoted to security,
confidentiality and privacy, as well as to intended target markets. The
CyberCare System helps the caregiver to track clinical outcomes and improvements
in medication and treatment compliance.
5
The CyberCare System has been designed to be implemented in
fee-for-service, case rate, episodic rate or capitation environments.
OUR OTHER BUSINESSES
We provide physical, occupational, speech therapy and pain rehabilitation
services in clinics currently owned and/or operated. We rely upon community
reputation, customer referrals, medical resource referrals and payor sources. We
identify market areas to expand in and open new clinics based on our experience
and market demographics. We currently employ approximately 128 people in this
segment. On average, each physical therapy clinic typically has a staff of
three, including a fully licensed therapist, a licensed therapy assistant and an
administrative secretary/rehabilitation aide. We develop rehabilitation clinics
with specific geographic locations throughout Florida that we believe will
create synergies and operating efficiencies and satisfy the cost containment
requirements of significant payor sources. Our rehabilitation services include
specialty programs, like pain management, coupled with traditional services,
such as primary care, orthopedic and neurological physician services and
comprehensive rehabilitation.
Our Pharmacy is a closed system institutional pharmacy employing approximately
60 individuals with its principal place of business in Lakeland, Florida.
Through this segment, we provide unit-dosed medications to over 4,000 residents
in 64 assisted-living facilities across central and west Florida by delivering
directly to the facilities serviced.
RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks. Additional risks and uncertainties not presently known to us or
that we currently believe to be immaterial may also adversely affect our
business and operations. You should carefully consider these risk factors,
together with all of the other information included in or incorporated by
reference into this prospectus before you decide to purchase our securities. If
any of the following risks develop into actual events, our business, financial
condition or results of operations could be materially adversely affected.
RISKS RELATED TO OUR BUSINESS WE HAVE A HISTORY OF LOSSES AND A SUBSTANTIAL
ACCUMULATED DEFICIT AND WE MAY NEVER REACH PROFITABILITY.
To date, we have been unable to generate revenue sufficient to be
profitable on a consistent basis. Consequently, we have sustained substantial
losses. Net loss for the nine months ended September 30, 2001 was $21,228,000.
Net losses for the years ended December 31, 2000 and 1999 were $28,698,000 and
$10,808,000, respectively. Our accumulated deficits as of September 30, 2001,
December 31, 2000 and December 31, 1999 were $88,378,000, $67,150,000, and
$38,452,000,
6
respectively. Our products and services may never achieve the commercial
acceptance necessary to achieve the level of revenues needed to be profitable in
the future or, if profitability is achieved, that it will be sustained.
WE MAY NEED TO OBTAIN ADDITIONAL FINANCING AND WE CANNOT BE CERTAIN THAT
ADDITIONAL FINANCING WILL BE AVAILABLE WHEN NEEDED OR ON TERMS FAVORABLE TO US
OR OUR STOCKHOLDERS.
Our future capital requirements will depend on many factors, including but
not limited to:
* the market acceptance of the CyberCare System;
* the levels of promotion and marketing required to attain a
competitive position in the marketplace;
* the extent to which we invest in new technology and improvements of
existing technology; and
* the response of competitors to our introduction of the CyberCare
System and other new products and services.
To the extent that funds generated by certain Securities described in this
Registration Statement, together with existing resources, are insufficient to
fund our activities over the long-term, we will need to raise additional funds
through equity or debt financing or from other sources. Our available funds,
coupled with the funds from our equity line of credit will be sufficient to meet
our cash needs through December 31, 2002. The sale of additional equity or
convertible debt may result in additional dilution to our stockholders. To the
extent that we rely upon debt financing, we will incur the obligation to repay
the funds borrowed with interest and may become subject to covenants and
restrictions that restrict operating flexibility. Failure to obtain necessary
financing could have a material adverse effect on our business, financial
condition or results of operations.
WE MAY NOT BE ABLE TO PROTECT PATENTS AND PROPRIETARY TECHNOLOGY, WHICH COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Our ability to compete effectively in the tele-health industry will depend
on our success in developing and marketing our products and services and/or
acquiring other suitable businesses and protecting our proprietary technology
both in the United States and abroad. We currently have a license for certain
patents and have several patents pending. We intend to file additional patent
applications that we deem to be economically beneficial. If we are not
successful in obtaining and defending patents or demonstrating that our
technology is proprietary under trade secret laws, we will have limited
protection against those who might copy our technology. We may incur substantial
costs in defending any patent or license infringement suits or in asserting any
patent or license rights, including those granted by third parties. The
expenditure involved in asserting, obtaining or defending these intellectual
property rights may be more than we can afford.
Although we have and will continue to enter into confidentiality, covenant
not to compete and invention agreements with our employees, consultants,
partners and acquisition targets, such
7
agreements may not be honored or they may not be able to adequately protect our
rights to our non-patented trade secrets and know-how.
THIRD PARTIES MAY CLAIM THAT WE HAVE BREACHED THEIR INTELLECTUAL PROPERTY
RIGHTS, WHICH COULD RESULT IN SIGNIFICANT ADDITIONAL COSTS OR PREVENT US FROM
PROVIDING ALL OF OUR SERVICES.
Certain products, which are components of the CyberCare System, were the
subject of a patent infringement complaint filed March 2, 2001 by the Cybernet
Systems Corporation ("Cybernet") in the United States District Court for the
Eastern District of Michigan. The complaint alleged that at least our EHC 600
Provider Stations, EHC 500 and EHC 400 Patient Stations, and EHC 200
Videoconferencing Station infringed Cybernet's U.S. Patent No. 6,050,940, issued
April 18, 2000, for "General-Purpose Medical Instrumentation". The complaint was
never served on us and the lawsuit was dismissed by court order on July 5, 2001
based on the plaintiff's failure to prosecute the case. Had the lawsuit been
pursued, we strongly believe we have good and valid defenses to Cybernet's
charges of infringement, including, but not limited to, that each of the accused
products do not infringe any of the Cybernet patent claims. We are not aware of
other claims or threats of claims regarding patent infringement or alleged
infringement.
Third parties may bring claims of copyright or trademark infringement,
patent infringement or misappropriation of creative ideas or formats against us
with respect to content that we distribute or our technology or marketing
techniques and terminology. Claims of this kind, even if without merit, could be
time-consuming to defend, result in costly litigation, divert management
attention, require us to enter into costly royalty or licensing arrangements or
prevent us from distributing certain content or utilizing important
technologies, ideas or formats.
Defending and prosecuting intellectual property suits, interference
proceedings and related legal and administrative proceedings are costly,
time-consuming and divert the attention of technical and management personnel.
Litigation may be necessary to enforce our patents or defend our patent rights,
to protect our trade secrets or know-how or to determine the enforceability,
scope and validity of the proprietary rights of others. If the outcome of any
such litigation or interference proceedings is adverse to us, it could subject
us to significant liabilities to third parties or require us to license disputed
rights from third parties or cease using such technology, which would have a
material adverse effect on our business, financial condition, results of
operations and future growth prospects. Patent and intellectual property
disputes in the medical device area have often been settled through licensing or
similar arrangements, which can include ongoing royalties. We may not obtain the
necessary licenses on satisfactory terms, if at all.
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CHANGES IN PAYMENT FOR MEDICAL SERVICES COULD HARM OUR BUSINESS.
We believe that trends in cost containment in the health care industry
will continue to result in a reduction in per-patient revenues which may impact
our health services segments. The federal government has implemented, through
the Medicare program, a payment methodology for physician services. This
methodology is a fee schedule that, except for certain geographical and other
adjustments, pays similarly situated physicians the same amount for the same
services. The schedule is adjusted each year and is subject to increases or
decreases at the discretion of Congress. Reduced operating margins may not be
recouped by us through cost reductions, increased volume, introduction of
additional procedures or otherwise. Rates paid by non-governmental insurers,
including those that provide Medicare supplemental insurance, are based on
established physician, ambulatory surgery center and hospital charges, and are
generally higher than Medicare payment rates. A change in the makeup of the
patient mix of our practices and those that we manage that results in a decrease
in patients covered by private insurance or a shift in private pay payment
structures could adversely affect our business, financial condition or results
of operations.
CERTAIN PAYMENTS TO OUR PT&R SUBSIDIARY HAVE BEEN SUSPENDED BY MEDICARE.
Our Physical Therapy and Rehabilitation ("PT&R") subsidiary received a
letter from the Health Care Financing Administration (now known as the Centers
for Medicare and Medicaid Services ("CMS")), through its intermediary, notifying
it of the suspension of Medicare payments to PT&R pending resolution of certain
complaints from patients regarding services rendered during the year 2000. The
complaining patients constituted less than 1% of PT&R's Medicare patients.
During the suspension, the Medicare program continued to process PT&R's claims
but withheld a total of $1,465,000 of amounts due PT&R. In August 200, the
suspension was lifted, although a portion of the reimbursement amounts for
processed claims remains in escrow totaling $1,114,000, pending further review.
We are working cooperatively with CMS to resolve any outstanding issues and to
effectuate release of the amount held in escrow.
WE ARE THE SUBJECT OF SECURITIES CLASS ACTION LITIGATION.
We are currently the subject of a consolidated class action lawsuit
against us and certain of our executive officers alleging violations of federal
securities laws. The action seeks unspecified damages and costs. Securities
litigation could result in substantial costs to us and could divert management's
attention and resources away from our operations and development. Although we
have insurance coverage for this consolidated action which we believe will be
adequate to cover defense costs, an exception or exclusion to coverage may apply
or such coverage may not in fact cover all defense costs. We believe that we
have meritorious defenses to these suits, but we may not prevail in this
litigation. Since this consolidated action is in the early stages, we cannot
predict the outcome of this litigation or determine the full potential impact it
may have on our liquidity or financial condition. We and our executives believe
the claims made by the complaint lack merit.
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WE HAVE LIMITED EXPERIENCE CONDUCTING OPERATIONS INTERNATIONALLY, WHICH MAY MAKE
OVERSEAS EXPANSION MORE DIFFICULT AND COSTLY.
We have begun the process of initiating business network operations in
several foreign countries. We are subject to differing laws, regulations and
business cultures which may adversely impact our business. We may also be
exposed to economic and political instability and international unrest. Although
we have and will continue to enter into agreements with our partners and
customers that attempt to minimize these risks, such agreements may not be
honored or we may not be able to adequately protect our interests.
We plan to expand our international operations in the future. There are
many barriers and risks to competing successfully in the international
marketplace, including:
* Costs of customizing products for foreign countries;
* Foreign currency risks;
* Dependence on local vendors;
* Compliance with multiple, conflicting and changing laws, and
regulations and policies;
* Longer sales cycles;
* Import and export restrictions and tariffs.
As a result of these competitive barriers to entry and risks, we may not
be able to successfully market, sell and deliver our products and services in
international markets.
We may engage in hedging transactions in the future to manage or reduce
our foreign exchange risk. However, our attempts to manage our foreign currency
exchange risk may not be successful and, as a result, our net earnings could be
negatively affected by any unfavorable fluctuations in foreign currency exchange
rates.
Our foreign operations could also be subject to unexpected changes in
regulatory requirements, tariffs, and other market barriers and political and
economic instability in the countries where we operate. Due to our foreign
operations, we could be subject to such factors in the future and the impact of
any such events that may occur in the future could subject us to additional
costs or loss of sales, which could negatively affect our operating results.
10
THE NATURE OF OUR BUSINESS EXPOSES US TO PROFESSIONAL AND PRODUCT LIABILITY
CLAIMS, WHICH COULD MATERIALLY ADVERSELY IMPACT OUR OPERATIONS.
Our business and technology exposes us to potential professional and
product liability risks which are inherent to such business and products,
including the risks associated with providing tele-health and disease management
products and services through a virtual private network which is reliant upon
telecommunications pipelines and connects provided by third parties which may,
from time to time, experience interruption of service. We carry reasonably
adequate insurance to protect against professional and product liability,
including errors and omissions in our technology and software design,
unauthorized access to our network and loss or interruption of service or system
functions, could materially adversely impact our business and operations.
WE MAY LOSE REVENUE OR INCUR ADDITIONAL COSTS BECAUSE OF SYSTEM FAILURE.
Any system failure that causes interruptions in our operations may have
an adverse effect on our business, financial condition or results of operations.
Our services are dependent on our own and other companies' abilities to
successfully integrate technologies and equipment. In connecting with other
companies' equipment we take the risk of not being able to provide service due
to telecommunications failure. There is also the risk that our equipment may
malfunction or that we could make an error, which may negatively affect our
customers' service. Our hardware and other equipment may also suffer damage from
natural disasters and other catastrophic events, such as loss of power and
telecommunications failures. We have taken a number of steps to prevent our
service from being affected by natural disasters, including development of
redundant systems. Nevertheless, such steps and redundancies may not prevent our
system from becoming disabled in the event of a hurricane, power outage or
otherwise. The failure of our system resulting from the effects of a natural or
man-made disaster could have an adverse effect on our relationship with our
customers and our business, financial condition and results of operation.
THE LOSS OF CERTAIN MEMBERS OF OUR MANAGEMENT TEAM COULD MATERIALLY ADVERSELY
AFFECT US.
We are dependent, to a significant extent, on the continued efforts and
abilities of members of our management team and the majority of which have
employment contracts. The Company is the owner of one million dollar key man
life insurance policies insuring the lives of the former Chairman, the current
Chief Executive Officer and the Executive Vice President. We have had a high
degree of success of attracting and retaining key personnel. Currently, we are
not aware, other than our Chief Executive Officer and Secretary, of any key
personnel who plans to retire or leave the Company in the near future. If we
were to lose the services of any of these individuals or other key employees
without obtaining a qualified replacement, our business could be materially
adversely affected.
11
We believe that our success will also depend upon our ability to hire,
train and retain other highly skilled personnel. We compete in a new market and
there are a limited number of people with skills necessary to provide the
services our clients demand. Competition for quality personnel is intense. We
cannot be sure that we will be successful in hiring, assimilating or retaining
the necessary personnel, and our failure to do so could affect our business,
financial condition and results of operation.
WE COMPETE WITH A NUMBER OF ESTABLISHED COMPANIES, SOME OF WHICH HAVE
SIGNIFICANTLY GREATER FINANCIAL, TECHNOLOGICAL AND MARKETING RESOURCES THAN WE
DO, AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY WITH THESE COMPANIES.
The networkbased telehealth solutions business is relatively new and
evolving. We compete with companies in the telehealth and monitoring business
and from other industries. The health care industry in general and the market
for medical ancillary services specifically are highly competitive. We compete
with ancillary services companies that are larger and have greater financial
resources than we do. We face competition from companies that provide
networkbased telehealth solutions, most of which are in the early stages of
development.
We believe that we compete effectively by providing superior technology
and networkbased telehealth solutions and more personalized care to the patients
and customers we serve. We believe the primary competitors for EHC products are
small, privately-held companies, none of which have established a major market
position as of this time. Some larger companies, such as Panasonic and Agilent,
have also recently announced initiatives in this market. Key differentiating
factors between us and our competitors in this segment lie primarily in our
networkbased telehealth solutions architecture which utilizes our patented
technology and our developed software applications.
RISKS RELATED TO OUR INDUSTRY
WE CANNOT GUARANTEE YOU THAT OUR PRODUCTS WILL BE FULLY DEVELOPED OR ACCEPTED BY
THE HEALTH CARE INDUSTRY.
Payors, physicians, medical providers or the medical community in general
may not accept and utilize our products and services. The extent that and the
rate at which our products achieve market acceptance and penetration will depend
on many variables, including the establishment and demonstration in the medical
insurance and payor communities of the clinical safety, efficacy and
cost-effectiveness of our products and services, the advantage of these products
over existing technology, third-party reimbursement practices and our
manufacturing, quality control, marketing and sales efforts. There can be no
assurance that similar risks will confront any other products and services we
develop in the future. Failure of our products and services to gain market
acceptance would have a material adverse effect on our business, financial
condition, and results of operations.
12
WE ARE SUBJECT TO A SIGNIFICANT NUMBER OF HEALTH CARE INDUSTRY REGULATIONS AND
RELATED REGULATIONS, THE FAILURE TO COMPLY WITH SUCH REGULATIONS COULD
MATERIALLY ADVERSELY AFFECT OUR OPERATIONS.
We are subject to substantial potential liability resulting from a variety
of possible causes, including violation of numerous health care laws,
malpractice and product liability. Many of the health care laws to which we are
subject are broad in scope and difficult to interpret. If any actions or
lawsuits are brought against us in the future, such actions or lawsuits could
have a materially adverse effect on us. Violations of the state and federal
anti-kick-back laws and regulations could result in substantial civil and/or
criminal penalties and/or administrative sanctions for the individuals or
entities, including exclusion from participation in the Medicare and Medicaid
programs, as well as the suspension or revocation of professional licensure.
Such sanctions, if applied to us or any of our employees, could result in
significant loss of reimbursement and could have a material adverse effect on
us.
We attempt to minimize our potential liability through implementation of
and adherence to compliance policies and procedures, effective supervision and
personnel recruitment procedures. We also carry a variety of insurance policies
including policies insuring against certain negligent acts. Insurance policies
may not adequately cover our losses resulting from such potential liability and
we may be unable to continue to qualify for, or be able to afford or obtain such
insurance in the future.
The Health Insurance Portability and Accountability Act of 1996 ("HIPAA"),
among other things, mandates administrative simplification of electronic data
interchanges of health information, including standardizing transactions,
establishing uniform health care provider, payer and employer identifiers and
seeking protections for confidentiality and security of patient data. Final
regulations governing health care transaction security were published in the
August 17, 2000 FEDERAL REGISTER, and will become effective for most entities in
or after October 2002. Final regulations governing privacy and confidentiality
of individually identifiable health information were published in the December
20, 2000 FEDERAL REGISTER, and will become effective for most entities in or
after February 2003. Many of the provisions of HIPAA do not directly apply to us
since we are not included in the types of entities to which HIPAA applies.
However, because we may be considered a business associate of a covered entity,
and because the implementation of our CyberCare System for our customers
necessitates that we have interaction with patient users of the system, we will
nonetheless have to comply with certain aspects of the HIPAA regulations. We are
proceeding to assess where our current systems diverge from HIPAA's privacy and
security requirements and to implement protocols and procedures that will bring
such systems and areas into compliance before the deadlines identified in the
final regulations. We are unable at this time to assess the cost of
implementation of the administrative simplification requirements of HIPAA that
are applicable to our business.
13
RISK FACTORS ASSOCIATED WITH CONTRACTS AND SUB-CONTRACTS WITH THE U.S.
GOVERNMENT.
It is our goal to introduce the CyberCare System for use by agencies or
authorities of the federal and state governments (such as the U.S. Veterans
Administration, Medicare, Medicaid, TRICARE, or other federally or state funded
health care programs) and we are currently engaged in the administration of
pilot programs for our CyberCare System with certain of these agencies and
authorities. Accordingly, a portion of our revenue may be derived from contracts
or subcontracts funded by the U.S. government or other state or local
governments. Therefore, our financial performance may be adversely affected by
changing government (federal, state or local) procurement practices and policies
as well as declines in government spending and funding. The factors that could
have a material adverse effect on our ability to win new contracts with the
federal, state or local governments, or retain existing contracts, include the
following: budgetary constraints; changes in government funding levels,
programs, policies or requirements; technological developments; the adoption of
new laws or regulations; and general economic conditions.
NEW LEGISLATIVE DEVELOPMENTS COULD RESULT IN FINANCIAL HARDSHIP.
Legislation regarding health care reform may be introduced in the future
by Congress or state legislatures. Any such reforms at the federal or state
level could significantly alter patient-provider relationships. State and
federal agency rule-making addressing these issues is also expected. No
predictions can be made as to whether future health care reform legislation,
similar legislation or rule-making will be enacted or, if enacted, its effect on
us. Any federal or state legislation prohibiting investment interests in, or
contracting with, us by physicians or health care providers for which there is
no statutory exception or safe harbor would have a material adverse effect on
our business, financial condition and results of operations.
RISKS RELATED TO OUR STOCK
SUBSTANTIALLY ALL OF OUR SHARES ARE ELIGIBLE FOR RESALE, WHICH MAY HAVE A
DEPRESSIVE EFFECT ON THE MARKET PRICE OF OUR COMMON STOCK.
As of December 31, 2001, we had 67,827,992 shares of our Common Stock
outstanding, of which substantially all can be sold under an effective
registration statement or under Rule 144 of the Securities Act. Under Rule 144,
a person who has held restricted securities for a period of one year may sell a
limited number of shares to the public in ordinary brokerage transactions. Sales
under Rule 144 may have a depressive effect on the market price of our Common
Stock due to the potential increased number of publicly held securities. The
timing and amount of sales of Common Stock that are currently eligible to be
resold pursuant to Rule 144 could have a depressive effect on the future market
price of our Common Stock.
14
THE ISSUANCE OF SHARES OF COMMON STOCK UNDER THE PRIVATE EQUITY LINE AGREEMENT
WILL BE DILUTIVE TO OUR EXISTING STOCKHOLDERS.
Pursuant to the terms of the Private Equity Line Agreement, we may issue
up to $15,000,000 of shares of our Common Stock to Strategic Investment
Management, S.A., at a price equal to approximately 85% of the market price of
the Common Stock, pursuant to the terms of the Private Equity Line Agreement. By
raising additional funds and issuing additional common shares under the private
equity line, our stockholders may experience dilution and various investors
engaging in short selling activities might also affect the market price of our
common shares. As a result of a decrease in our common stock price, we could
face de-listing, a damaged capital structure and the availability of additional
financing.
THE EXERCISE OF OPTIONS AND WARRANTS WILL BE DILUTIVE TO OUR EXISTING
STOCKHOLDERS.
As of December 31, 2001, we had outstanding warrants and options to
purchase a total of 23,602,370 shares of our Common Stock at prices ranging from
between $0.50 and $31.50 per share, 16,708,369 shares of which are fully vested.
Included in the total warrants and options outstanding are stock options to
purchase up to 2,555,000 of the Company's' Common Stock. These options will only
vest in three equal installments and vesting will not begin until the Company
deploys and installs at least 4,000 Electronic tele-health Workstation units
("units") or when the Company recognizes revenue from the deployment of the
units of not less than $7.5 million one year from date of the grant or whichever
is later. All options will immediately vest no later than the fourth anniversary
of the grant date. We are also authorized to issue up to an additional 6,668,159
options without shareholder approval under our Company stock option and stock
purchase plans.
THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF OUR
SUBORDINATED DEBENTURES COULD NEGATIVELY EFFECT THE MARKET PRICE FOR OUR COMMON
STOCK
We have outstanding subordinated debentures which are convertible into
Common Stock at the holder's option at a conversion price equal to 90% of the
average closing price for the 20 days trading prior to the date of the
conversion notice, but no less than $3.25 per share.
Because the conversion price is not fixed the ultimate number of shares of
Common Stock issuable if the holders elect to convert the $10 million principal
amount of the Subordinated Debentures is unknown at this time. Based upon an
average market price of $3.25 per share (which is minimum conversion price and
above the 20 day trading price), we would be obligated to issue 3,076,923 shares
on conversion if all $10 million of the Subordinated Debentures were converted.
15
WE MAY ISSUE ADDITIONAL SHARES AND DILUTE YOUR OWNERSHIP PERCENTAGE.
Some events over which you have no control could result in the issuance
of additional shares of our Common Stock or Preferred Stock, which would dilute
your ownership percentage in CyberCare. We may issue additional shares of Common
Stock or Preferred Stock:
* to raise additional capital or finance acquisitions;
* upon the exercise or conversion of outstanding options and warrants
* upon the sale of shares of Common Stock pursuant to the Private
Equity Line Agreement;
* as interest payments for and/or upon conversion of certain
Subordinated Debentures that have been issued; and/or
* in lieu of cash payment of dividends or for services rendered.
YOUR PERCENTAGE OF OWNERSHIP AND VOTING POWER AND THE PRICE OF OUR COMMON STOCK
MAY DECREASE BECAUSE WE HAVE ISSUED, AND IN THE FUTURE MAY ISSUE, A SUBSTANTIAL
NUMBER OF SHARES OF COMMON STOCK OR SECURITIES CONVERTIBLE INTO OR EXERCISABLE
FOR OUR COMMON STOCK.
We have the authority to issue up to 200 million shares of our Common
Stock and 20 million shares of our Preferred Stock without stockholder approval.
We may also issue options and warrants to purchase shares of our Common Stock.
Future issuances could be at values substantially below the price paid for our
Common Stock by current stockholders. We may conduct additional future offerings
of our Common Stock, Preferred Stock, or other securities with rights to convert
the securities into shares of our Common Stock which may result in a decrease in
the value or market price of our Common Stock. Further, the issuance of
Preferred Stock could have the effect of delaying, deferring or preventing a
change of ownership without further vote or action by the stockholders and may
adversely affect the voting and other rights of the holders of Common Stock.
WE ANTICIPATE VOLATILITY IN OUR STOCK PRICE.
The market price for securities in our industry historically has been
highly volatile. From January 1, 2000 through February 5, 2002, the price of our
Common Stock has fluctuated between $39.75 and $0.42 per share. The price of our
Common Stock may be subject to fluctuations in response to:
* quarter to quarter variations in operating results;
* vendor additions or cancellations;
* creation or elimination of funding opportunities;
* favorable or unfavorable coverage by securities analysts;
* the availability of products, technology and services; and
* other events or factors, many of which are beyond our control.
16
These broad market and industry factors may cause the price of our Common
Stock to decline, regardless of our actual operating performance.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING INFORMATION.
This prospectus and other materials we have filed or may file with the
SEC, as well as information included in oral statements or other written
statements made, or to be made, by us, contain, or may contain disclosures which
are "forward-looking statements".
This Registration Statement on Form S-8 contains forward-looking
statements. For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "could," "may," "will," "believes,"
"anticipates," "plans," "expects," "projects," "estimates," "intends,"
"continues," "seeks," "predicts," "expectations," variations of such words and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions ("Future Factors") that are
difficult to predict. As a result, because these statements are based on
expectations as to future performance and events and are not statements of fact,
actual events or results may differ materially from those expressed or forecast
in such forward-looking statements. Factors that might cause the Company's
actual results to differ materially from those indicated by such forward-looking
statements include, without limitation, those discussed in our filings with the
SEC , including but not limited to our most recent proxy statement and "Risk
Factors" in our most recent Form 10-KSB as well as Future Factors that may have
the effect of reducing our available operating income and cash balances.
Future Factors include risks associated with the uncertainty of future
financial results; government approval processes; changes in the regulation of
the healthcare and technology industries at either the federal or state levels;
changes in reimbursement for services by government or private payors;
competitive pressures in the healthcare and technology industries and the
Company's response thereto; delays or inefficiencies in the introduction,
acceptance or effectiveness of new products; the impact of competitive products
or pricing; the Company's relationships with customers and partners; cash
expenditures related to possible future acquisitions and expansions; on-going
capital expenditures; the Company's ability to obtain capital in favorable terms
and conditions; increasing price, products and services; U.S. and non-U.S.
competitors, including new entrants; rapid technological developments and
changes and the Company's ability to continue to introduce competitive new
products and services on a timely, cost-effective basis; the mix of products and
services; the availability of manufacturing capacity, components and materials;
the ability to recruit and retain talent; the achievement of lower costs and
expenses; credit concerns in the emerging service provider market; customer
demand for the Company's products and services; U.S. and non-U.S. government and
public policy changes that may affect the level of new investments and purchases
made by customers; changes in U.S. and non-U.S. governmental regulations;
protection and validity of patent and other intellectual property rights;
reliance on large customers and significant suppliers; the ability to supply
17
customer financing; technological implementation; and cost/financial risks in
the use of large, multiyear contracts; the Company's credit ratings; the outcome
of pending and future litigation; continued availability of financing, financial
instruments and financial resources in the amounts, at the times and on the
terms required to support the Company's future business; general industry and
market conditions and growth rates; and general U.S. and non-U.S. economic
conditions, including interest rate and currency exchange rate fluctuations.
You are cautioned not to unduly rely on such forward-looking statements
when evaluating the information presented herein. These statements should be
considered only after carefully reading this entire Form S-8 and the documents
incorporated herein by reference.
SELLING SECURITY HOLDERS
This prospectus relates to 400,666 shares of our common stock issuable
upon exercise of options granted to the selling security holders, each of whom
was an employee at the time of grant.
The following table sets forth information with respect to the beneficial
ownership of the selling security holders. Shares of common stock underlying
options that are currently exercisable or exercisable within 60 days of February
13, 2002 are deemed to be outstanding and to be beneficially owned by the
persons holding such options for the purpose of computing the shares owned by
each person.
NUMBER OF SHARES NUMBER OF NUMBER OF
OWNED PRIOR TO SHARES OFFERED SHARES OWNED
NAME AND POSITION OFFERING HEREBY AFTER OFFERING
------------------- ---------------- ---------------- -----------------
Haines, John 1,954,834 200,000 1,754,834
Xenakis, Stephen 134,000 134,000 --
Colwell, Vincient 66,666 66,666 --
--------- ---------
Total 2,155,500 400,666 1,754,834
========= ========= =========
18
PLAN OF DISTRIBUTION
Pursuant to this prospectus, the selling security holders, or by certain
pledgees, donees, transferees or other successors in interest to the selling
security holders, may sell shares from time to time in transactions on the
Nasdaq National Market, in privately-negotiated transactions or by a combination
of such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The selling security holders may effect such
transactions by selling the shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling security holders or the purchaser of the shares for
whom such broker-dealers may act as agent or to whom they sell as principal, or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions).
Other methods by which the shares may be sold include, without limitation:
(1) transactions which involve cross or block trades or any other transaction
permitted by the Nasdaq National Market, (2) "at the market" to or through
market makers or into an existing market for the common stock, (3) in other ways
not involving market makers or established trading markets, including direct
sales to purchasers or sales effected through agents, (4) through transactions
in options or swaps or other derivatives (whether exchange-listed or otherwise),
(5) through short sales, (6) any combination of any of the foregoing methods of
sale, or (7) sales pursuant to Rule 144. The selling security holders may also
enter into option or other transaction with broker-dealers which require the
delivery to such broker-dealers of the shares offered hereby which shares such
broker-dealer may resell pursuant to this prospectus.
The selling security holders and any broker-dealers who act in connection
with the sale of shares hereunder may be deemed to be "underwriters" as that
term is defined under the Securities Act, and any commissions received by them
and profit on any resale of the Shares as principal may be deemed to be
underwriting discounts and commissions under the Securities Act.
There is no assurance that the selling security holders will sell all or
any of the shares, which may be offered hereby.
RESALE OF SHARES BY AFFILIATES
The shares offered hereby may be resold freely, except that any selling
security holder deemed to be an "affiliate" of the Company within the meaning of
those terms under the Securities Act and the rules and regulations promulgated
there under, may only sell the shares limited to the amount specified in Rule
144(e) of the Securities Act which allows them to sell, within any three-month
period, up to the number of shares that does not exceed the greater of: (1) one
percent of the then outstanding shares of common stock of the company, or (2)
the average weekly trading volume during the four calendar weeks preceding the
date of receipt of the order to execute the transaction by the broker or the
date of execution of the transaction directly with the Broker.
19
Any employee who is not an executive officer of director of the Company
generally will not be deemed to be an "affiliate" of the Company. In addition,
the acquisition of shares of common stock by officers and directors of the
Company through the exercise of options will generally not be considered a
"purchase", but the sale thereof will generally be considered a "sale" for
Section 16(b) of the Exchange Act.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for us by Atlas Pearlman, P.A., Ft. Lauderdale, Florida. Atlas
Pearlman, P.A. owns 168,000 shares of the Company's Common Stock.
EXPERTS
Ernst & Young LLP, Certified Public Accountants, have audited our
consolidated financial statements included in our Annual Report on Form 10-KSB
for the year ended December 31, 2000, as set forth in their report, which are
incorporated by reference in this registration statement. Our financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
INDEMNIFICATION
Section 607.0850(1) of the Florida Business Corporation Act, as amended
(the "Florida Act"), provides that, in general, a Florida corporation may
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against liability incurred in connection with such proceeding,
including any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
In the case of proceedings by or in the right of the corporation, Section
607.0850(2) of the Florida Act provides that, in general, a corporation may
indemnify any person who was or is a party to any such proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation against expenses and amounts paid in settlement actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof, provided that such person acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claims as to which such person is adjudged liable unless
a court of competent jurisdiction determines upon application that such person
is fairly and reasonably entitled to indemnity.
20
Section 607.0850 further provides that to the extent a director, officer,
employee or agent of a corporation is successful on the merits or in the defense
of any proceeding referred to in subsections (1) or (2) of Section 607.0850 or
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses actually and reasonably incurred by him in connection
therewith; that the corporation may advance such expenses; that indemnification
provided for by Section 607.0850 shall not be deemed exclusive of any other
rights to which the indemnified party may be entitled; and that the corporation
may purchase and maintain insurance on behalf of such person against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liabilities under such Section 607.0850.
Section 607.0850 of the Florida Act further provides that, in general,
indemnification or advancement of expenses shall not be made to or on behalf of
any director, officer, employee or agent if a judgment or other final
adjudication establishes that such person's actions, or omissions to act, were
material to the cause of action so adjudicated and constitute: (i) a violation
of the criminal law, unless such person had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which such person derived an improper personal
benefit; (iii) in the case of a director, a circumstance under which the
director has voted for or assented to a distribution made in violation of the
Florida Act or the corporation's articles of incorporation; or (iv) willful
misconduct or a conscious disregard for the best interests of the corporation in
a proceeding by or in the right of the corporation to procure a judgment in
favor or in a proceeding by or in the right of a shareholder.
The Company's Articles of Incorporation and Bylaws provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Florida law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
21
400,666 Shares
CyberCare, Inc.
Common Stock
-------------------------
PROSPECTUS
-------------------------
-------------------------
February 13, 2002
-------------------------
You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling security holders are offering to sell,
and seeking offers to buy, shares of common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the company with the SEC are
incorporated herein by reference:
* annual report on Form 10-KSB for the fiscal year ended December 31,
2000.
* proxy statement filed on May 9, 2001, for our annual meeting of
shareholders.
* quarterly reports on Forms 10-Q for the periods ended March 31,
2001, June 30, 2001, and September 30, 2001.
* our current reports on Form 8-K filed on June 1, 2001, June 28,
2001, September 17, 2001, October 15, 2001, October 31, 2001,
January 15, 2002, January 16, 2002 and February 11, 2002.
* our registration statement on Form S-3 filed on November 23, 2001.
* our registration statement on Form S-3 amendment #1 filed on
December 17, 2001.
* our registration statement Form S-3 amendment #2 filed on January
18, 2002.
* our registration statement Form S-3 amendment #3 filed on February
12, 2002.
All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to the registration statement which indicates that all
shares of common stock offered have been sold or which deregisters all of such
shares then remaining unsold, shall be deemed to be incorporated by reference in
the registration statement and to be a part thereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
The validity of the issuance of the securities offered hereby will
be passed upon for us by Atlas Pearlman, P.A., Ft. Lauderdale, Florida.
Atlas Pearlman P.A. owns 168,000 shares of the Company's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850(1) of the Florida Business Corporation Act, as amended
(the "Florida Act"), provides that, in general, a Florida corporation may
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against liability incurred in connection with such proceeding,
including any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful.
In the case of proceedings by or in the right of the corporation, Section
607.0850(2) of the Florida Act provides that, in general, a corporation may
indemnify any person who was or is a party to any such proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation against expenses and amounts paid in settlement actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof, provided that such person acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claims as to which such person is adjudged liable unless
a court of competent jurisdiction determines upon application that such person
is fairly and reasonably entitled to indemnity.
Section 607.0850 further provides that to the extent a director, officer,
employee or agent of a corporation is successful on the merits or in the defense
of any proceeding referred to in subsections (1) or (2) of Section 607.0850 or
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses actually and reasonably incurred by him in connection
therewith; that the corporation may advance such expenses; that indemnification
provided for by Section 607.0850 shall not be deemed exclusive of any other
rights to which the indemnified party may be entitled; and that the corporation
may purchase and maintain insurance on behalf of such person against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liabilities under such Section 607.0850.
Section 607.0850 of the Florida Act further provides that, in general,
indemnification or advancement of expenses shall not be made to or on behalf of
any director, officer, employee or agent if a judgment or other final
adjudication establishes that such person's actions, or omissions to act, were
material to the cause of action so adjudicated and constitute: (i) a violation
of the criminal law, unless such person had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which such person derived an improper personal
benefit; (iii) in the case of a director, a circumstance under which the
director has voted for or assented to a distribution made in violation of the
Florida Act or the corporation's articles of incorporation; or (iv) willful
misconduct or a conscious disregard for the best interests of the corporation in
a proceeding by or in the right of the corporation to procure a judgment in
favor or in a proceeding by or in the right of a shareholder.
The Company's Articles of Incorporation and Bylaws provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by Florida law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Any restricted securities to be offered or resold pursuant to this
registration statement were issued pursuant to an exemption under Section 4(2)
of the Securities Act, as a non-public offering of securities.
ITEM 8. EXHIBITS
The following exhibits are filed as part of this registration
statement:
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
5.1(1) Opinion Regarding Legality
10.1(1) Non-qualified stock option agreement with John Haines
10.2(1) Non-qualified stock option agreement with Stephen Xenakis
10.3(1) Non-qualified stock option agreement with Vincent Colwell
23.1(1) Consent of Counsel (included in Exhibit 5.1)
23.2(1) Consent of Ernst & Young LLP, independent certified public
accountants
(1) Filed herewith
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
i. To include any prospectus required by Section 10(a)(3)
of the Securities Act;
ii. To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) of the Securities Act if, in
the aggregate, the changes in volume and price
represent no more than 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
iii. To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (ii)
do not apply if the registration statement is on Form
S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with
or furnished to the SEC by the registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 6 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boynton Beach, State of Florida, on the 13th day of
February, 2002.
CYBERCARE, INC.
By: /s/ STEVEN M. COHEN
--------------------
Steven M. Cohen, Chief Financial Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated:
SIGNATURE TITLE DATE
/s/ JACK HIGHT Chairman of the Board February 13, 2002
------------------------
Jack Hight
/s/ JOSEPH FORTE Chief Executive Officer, February 13, 2002
------------------------ President and Director
Joseph Forte
/s/ DANA PUSATERI Executive Vice President and February 13, 2002
------------------------ Director
Dana Pusateri
/s/ STEVEN M. COHEN Chief Financial Officer February 13, 2002
------------------------
Steven M. Cohen
/s/ DANIEL BIVINS Senior Vice President and February 13, 2002
------------------------ Director
Daniel Bivins
/s/ THEODORE ORLANDO Director February 13, 2002
------------------------
Theodore Orlando
/s/ TERRY LAZAR Director February 13, 2002
------------------------
Terry Lazar
/s/ PETER MURPHY Director February 13, 2002
------------------------
Peter Murphy
/s/ ALAN ADELSON Director February 13, 2002
------------------------
Alan Adelson
/s/ ZACHARIAH P. ZACHARIAH Director February 13, 2002
--------------------------
Zachariah P. Zachariah