AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 2003
REGISTRATION NO. 333-108191
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1. TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
I-TRAX, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
23-3057155
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(I.R.S. Employer Identification No.)
ONE LOGAN SQUARE, SUITE 2615
130 N. 18TH STREET
PHILADELPHIA, PENNSYLVANIA 19103
(215) 557-7488
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(Address, including zip code, and telephone number, including are code, of
registrant's principal executive offices)
FRANK A. MARTIN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
I-TRAX, INC.
ONE LOGAN SQUARE, SUITE 2615, 130 N. 18TH ST.
PHILADELPHIA, PA 19103
(215) 557-7488 x110
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(Name, address, including zip code, and telephone number, including are code,
of agent for service)
COPIES TO:
YURI ROZENFELD, ESQ. JUSTIN P. KLEIN, ESQ.
GENERAL COUNSEL GERALD GUARCINI, ESQ.
I-TRAX, INC. BALLARD SPAHR ANDREWS & INGERSOLL, LLP
ONE LOGAN SQUARE, SUITE 2615 1735 MARKET STREET, 51ST FLOOR
130 N. 18TH ST. PHILADELPHIA, PA 19103
PHILADELPHIA, PA 19103 (215) 665-8500
(215) 557-7488 x116
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 plan, please check the following box. [ ]
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 statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
________________________________
The registrant hereby amends the registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed
without notice. We may not issue these securities until the registration
statement filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and we are not
soliciting offers to buy these securities in any jurisdiction where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 14, 2003
PROSPECTUS
I-TRAX, INC.
1,628,298
SHARES OF
COMMON STOCK
This prospectus relates to the offer and sale from time to time of the
following share held by the selling shareholders:
o up to 1,211,631 shares of our common stock; and
o up to 416,667 shares of common stock issuable upon the exercise
of outstanding warrants and conversion of a convertible
promissory note.
The prices at which selling shareholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares.
The shares offered by this prospectus were originally issued in
connection with several private placements of our securities.
Our common stock is listed on the American Stock Exchange under the
symbol "DMX." On October 13, 2003, the closing price for our common stock was
$3.66.
Investing in our common stock involves risks, which are described in
the "Risk Factors" section beginning on page 6 of this prospectus.
________________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
________________________________
The date of this Prospectus is ____ __, 2003
TABLE OF CONTENTS
Preliminary Notes.......................................................... 2
Statement Regarding Forward-Looking Information............................ 2
I-trax, Inc................................................................ 3
Risk Factors............................................................... 6
Market for Common Equity...................................................13
Use of Proceeds............................................................13
Selling Security Holders...................................................14
Plan of Distribution.......................................................16
Available Information......................................................17
Incorporation of Certain Documents by Reference............................17
Legal Matters..............................................................18
Experts....................................................................18
PRELIMINARY NOTES
You should rely only on the information contained and incorporated by
reference in this prospectus. No one has been authorized to provide you with
different information. This prospectus is not an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information contained and incorporated by reference in this prospectus or in any
prospectus supplement is accurate as of any date other than the date on the
front of the document.
Unless otherwise indicated, references to "we," "our" and "I-trax"
mean I-trax, Inc. and its subsidiaries.
Effective January 3, 2003, we completed a 1-for-5 reverse stock split.
Our board of directors and stockholders authorized the reverse stock split in
connection with the then pending application to list our common stock on the
American Stock Exchange. Our common stock began trading on the American Stock
Exchange on January 15, 2003 under the symbol "DMX." The information presented
in this prospectus about the number of outstanding shares of our common stock
and historic information about our common stock and stock prices has been
adjusted to reflect the completed reverse stock split.
STATEMENT REGARDING FORWARD LOOKING INFORMATION
This prospectus and our filings with the Securities and Exchange
Commission (or SEC) incorporated by reference in this prospectus include
forward-looking statements. All statements, other than statements of historical
facts, included in this prospectus and our filings with the SEC incorporated by
reference in this prospectus regarding our strategy, future operations,
financial position, future revenues, projected costs, prospects, plans and
objectives of management are forward-looking statements. The words
"anticipates," "believes," "estimates," "expects," "intends," "may," "plans,"
"projects," "will," "would" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
these identifying words. We cannot guarantee that we actually will achieve the
plans, intentions or expectations disclosed in our forward-looking statements
and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make. We have
included important factors in the cautionary statements included or incorporated
in this prospectus, particularly under the heading "Risk Factors" beginning on
page 6 below that we believe could cause actual results or events to differ
materially from the forward-looking statements we make. Our forward-looking
statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments we may make.
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I-TRAX, INC.
Business Overview
I-trax enables better healthcare through personalized health management
programs.
We believe that our personalized disease and lifestyle management
solutions enable organizations to evolve from fragmented care management
practices into a cohesive and efficient system of healthcare. Our solutions are
fully integrated, use a single-data platform that allows all caregivers to share
records, and enable our clients to provide true coordination of care. We believe
that by facilitating real-time communication between all stakeholders within
today's complex healthcare system, our solutions reduce costs and enable the
best possible delivery of care.
Health-e-LifeSM Program
We deliver our solutions through our proprietary Health-e-LifeSM
Program. The Program is designed to deliver lifestyle, disease and risk
reduction interventions to an entire population by utilizing predictive science,
technology, clinical expertise and personal care coordination.
Predictive Science
Our Health-e-LifeSM Program incorporates predictive science to analyze
our clients' medical claims and pharmacy and clinical data to predict future
healthcare costs. We believe this is an essential step to effective disease and
lifestyle management. Experts agree that predictive science provides a
comprehensive advantage to health plans, employers and providers, and leads to
cost effective medical management and greater profitability. Using predictive
science, we analyze our clients' entire populations to accurately predict our
clients' future healthcare costs, including avoidable costs, the health
conditions that will drive those costs and the people within our clients'
populations who are at risk for those conditions. Armed with this information,
I-trax is able to target the most appropriate resources to achieve the best
savings and return on investment.
Technology Solutions
All technology components of our Health-e-LifeSM Program utilize a
single data platform--Medicive(R) Medical Enterprise Data System--a proprietary
software architecture developed to collect, store, retrieve and analyze a broad
range of information used in the healthcare industry.
Further, our web accessible solutions include portals for key
stakeholders in the care delivery process--consumers, physicians and care
managers--thus permitting real-time sharing of information and support the
adherence to our health and disease intervention programs. The key technology we
use for effective care coordination include:
o Health-e-Coordinator(TM), a web-based care management
application;
o MyFamilyMD(TM), a consumer health management portal;
o CarePrime(R), a clinical care application for physicians and
clinicians; and
o I-talk(TM), interactive smart voice technology.
Interventions and Clinical Expertise
Our personalized health and disease interventions include intensive
programs for individuals who suffer from, or are at high risk for, active or
chronic disease and tailored programs for individuals who are at low risk.
Depending on the individual's level of risk, our custom tailored interventions
include self-help programs available through the web or person-assisted programs
administered through our Care Communication Center, which is staffed by trained
nurses and other healthcare professionals 24 hours per day, 7 days per week. All
interventions include lifestyle and risk reduction programs that follow
evidence-based clinical guidelines to optimize health, fitness, productivity and
quality of life.
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We have designed and are implementing interventions for a number of
specific chronic conditions, including congestive heart failure (CHF), coronary
artery disease (CAD), asthma, diabetes, cancer management, cystic fibrosis,
lower back pain and chronic obstructive pulmonary disease (COPD).
Care Communication Center
Our Care Communications Center is staffed with trained nurses and
other healthcare professionals 24 hours per day, 7 days per week. Through the
Center, we effect targeted interventions to improve the health management of the
populations we serve. The Center helps consumers make informed decisions about
their health and provides ongoing support for those with chronic diseases. Our
demand management and nurse triage services incorporate nationally recognized,
evidence-based clinical guidelines to ensure that all caregivers and consumers
are following the best practices.
Everything we do is built on information, which drives decision-making
and results. Information guides the identification of consumers, the utilization
of protocols that provide high quality and cost effective care, the
communication among the key stakeholders and ultimately the return on capital
invested in providing healthcare. When all of these components are in place, we
believe that consumer satisfaction will increase and the costs of providing
quality healthcare will decrease.
Corporate Information
General
Our principal executive offices are located at One Logan Square, 130
N. 18th Street, Suite 2615, Philadelphia, Pennsylvania 19103. Our telephone
number is (215) 557-7488 and our fax number is (215) 557-7820. We maintain a
website located at http://www.i-trax.com. Information contained on our website
is not part of this prospectus.
We make our annual reports on Form 10-KSB, quarterly reports on Form
10-QSB and current reports on Form 8-K, as well as any amendments to the
forgoing, available free of charge on our website as soon as reasonably
practicable after they have been filed with the SEC. For a detailed description
of our business you should read these reports and the other filings we make with
the SEC which are incorporated by reference in this prospectus.
I-trax, Inc.--Holding Company
I-trax was incorporated in the State of Delaware on September 15, 2000
at the direction of the board of directors of I-trax Health Management
Solutions, Inc. (or Health Management), I-trax's then parent company. On
February 5, 2001, I-trax became the holding company of Health Management at the
closing of a reorganization pursuant to Section 251(g) of Delaware General
Corporation Law. The holding company reorganization was described in greater
detail in I-trax's registration statement on Form S-4 (Registration Number
333-48862), filed with the SEC on October 27, 2000. At the effective time of the
reorganization all of the stockholders of Health Management became the
stockholders of I-trax and Health Management became a wholly owned subsidiary of
I-trax. Further, all outstanding shares of Health Management were converted into
shares of I-trax in a non-taxable transaction. Health Management no longer files
reports with the SEC. However, I-trax does file reports with the SEC, and its
common stock is traded on the American Stock Exchange under the symbol "DMX."
The holding company structure has allowed us greater flexibility in
our operations and expansion and diversification plans, including in the
acquisition of WellComm Group, Inc. on February 6, 2002 and iSummit Partners,
LLC, doing business as "MyFamilyMD," on February 7, 2001.
I-trax acquired WellComm effective February 6, 2002 in a two-step
reorganization pursuant to a Merger Agreement dated January 28, 2002 by and
among I-trax, WC Acquisition, Inc., an Illinois corporation and a wholly-owned
subsidiary of I-trax, WellComm and WellComm's two principals. The initial step
of the reorganization transaction involved a merger of WC Acquisition with and
into WellComm, in which merger WellComm continued as the surviving corporation.
The second step of the reorganization transaction involved a statutory merger of
WellComm with and into I-trax, in which merger I-trax continued as the surviving
corporation.
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At the closing of the WellComm merger, we delivered to the WellComm
stockholders approximately $2,200,000 in cash and 1,488,000 shares of our common
stock, and to each of two senior officers of WellComm options to acquire 56,000
shares of our common stock at a nominal exercise price. After the merger, three
executive officers of WellComm joined us as senior executives and WellComm's two
principal stockholders were elected to our board of directors.
We funded the acquisition of WellComm by selling a 6% convertible
senior debenture in the aggregate principal amount of $2,000,000 to Palladin
Opportunity Fund LLC pursuant to a Purchase Agreement dated as of February 4,
2002 between Palladin and us. Pursuant to the purchase agreement, we also issued
Palladin a warrant to purchase up to 307,692 shares of our common stock. The
outstanding principal and any interest under the debenture are payable in full
on or before February 3, 2004. Further, outstanding principal and any interest
may be converted at any time at the election of Palladin into our common stock.
The conversion price under the debenture, and the exercise price under the
warrant, is $1.75.
I-trax acquired iSummit effective February 7, 2001 in an exchange
transaction pursuant to a Contribution and Exchange Agreement dated September
22, 2000, as amended, by and among iSummit, I-trax, Health Management and
iSummit's three members. I-trax issued 580,682 shares of common stock to acquire
iSummit (reflecting a post closing adjustments to the aggregate number of issued
shares effective as of December 31, 2001).
I-trax Health Management Solutions, Inc.--Operating Subsidiary
Health Management is a predecessor to I-trax and is our operating
subsidiary. It was incorporated in the State of Delaware under the name of
Marmac Corporation in May 1969. In December 1979, it changed its name to Ibex
Industries International, Inc. On April 1, 1996, Health Management purchased the
assets of certain physician practices, changed its name to U.S. Medical
Alliance, Inc., and commenced operations as a physician practice management
company.
As U.S. Medical Alliance, Health Management completed one additional
physician practice acquisition. However, it did not have adequate liquidity or
capital resources to withstand the downturn in the physician practice management
industry, nor the ability to acquire profitable physician practices. In January
1997, the board of directors of Health Management, in an effort to reorganize,
elected Frank A. Martin as its President. Mr. Martin negotiated the return of
the previously acquired physician practice assets to the physicians in exchange
for the cancellation of any Health Management capital stock or notes associated
with those acquisitions. Health Management changed its name to I-Trax.com, Inc.
in August 1999.
Health Management merged with Member-Link effective December 30, 1999
pursuant to a Merger Agreement dated as of December 14, 1999. In the merger,
Health Management issued an aggregate of 1,554,368 shares (as adjusted) of its
common stock. On February 7, 2001, Health Management and I-trax completed the
previously described holding company reorganization. Health Management assumed
its current name, I-trax Health Management Solutions, Inc., on March 21, 2001.
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RISK FACTORS
In addition to other information contain and incorporated by reference
in this prospectus, you should carefully consider the following risks and the
other information in evaluating I-trax and its business. Our business, financial
condition and results of operations could be materially and adversely affected
by each of these risks. Such an adverse effect could cause the market price of
our common stock to decline, and you could lose all or part of your investment.
Risk Related to I-trax
We have a history of operating losses and anticipate continued
operating losses through the third quarter of 2003.
We have used substantial cash to fund our operating losses, and we
have never earned a profit. Through June 30, 2003, we have used approximately $
14.4 million of cash to fund our operating activities. Moreover, we expect to
use additional cash to fund our operating losses through the third quarter of
2003. Our ability to achieve profitability will depend, in part, on:
o the commercial success of our service and software applications;
o successful deployment and retention of our services and software
applications by our customers; and
o our sales and marketing activities.
The success of our business model depends on attracting customers,
such as public health agencies, hospitals, health plans, self-insured employers,
and colleges and universities, to our population health management solutions.
Although we believe that this business model will be successful, we cannot
assure you that we will achieve or sustain profitability or that our operating
losses will not increase in the future.
We will require additional capital to fund our operating losses and
improve our products and services.
Additional funds are required to complete our planned product
development efforts, expand our sales and marketing activities, and to cover
cash shortfalls until our current and projected pipeline materializes. At
present, we expect to obtain such funds from operations and financings
activities. Financing activities may include equity or debt financings,
strategic alliances with corporate partners and others, or through other
sources. We cannot provide assurance that additional funding will be available
on acceptable terms, if at all. If adequate funds are not available, we may have
to delay, scale-back or eliminate certain aspects of our operations or attempt
to obtain funds through arrangements with collaborative partners or others.
Moreover, if we continue to have operating losses and are unable to obtain
capital to cover them, we may be unable to remain in business. These results, in
turn, could cause the relinquishment of our rights to certain of our
technologies, products or potential markets, dilution of your ownership in our
business, or our loss of what we believe is a current competitive advantage in
technology enabled population health management field. Therefore, the inability
to obtain adequate funds could have a material adverse impact on our business,
financial condition and results of operations.
The segment of the healthcare industry in which we operate is
relatively new and our sales cycle is long and complex.
The disease and population health management business, although
growing rapidly, is a relatively new segment of the overall healthcare industry
and has many entrants. Many companies use the generic label of "disease
management" to characterize activities ranging from the sale of medical supplies
and drugs to services aimed at managing demand for healthcare services. Because
this segment of the industry is relatively new, potential purchasers take a long
time to evaluate and purchase such services, lengthening our sales cycle.
Further, the sales and implementation process for our services and software
applications is lengthy, involves a significant technical evaluation and
requires our customers to commit a great deal of time and money. Finally, the
sale and implementation of our solutions are subject to delays due to our
customers' internal budgets and procedures for
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approving large capital expenditures and deploying new services and software
applications within their organizations. The sales cycle for our solutions,
therefore, is unpredictable and has generally ranged from 3 to 24 months from
initial contact to contract signing. The time it takes to implement our
solutions is also difficult to predict and has lasted as long as 18 months from
contract execution to the commencement of live operation. During the sales cycle
and the implementation period, we may expend substantial time, effort and money
preparing contract proposals, negotiating the contract and implementing the
solution without receiving any related revenue.
Our limited operating experience may cause us to misjudge the segment
of the healthcare industry in which we are operating.
We have only recently begun to design, build and offer disease
management and comprehensive health management solutions. Our enterprise
software applications have been operational for less than four years, our
web-based solutions have been operational for less than two years and our
disease management and comprehensive health management solutions have been
operational for only one year. Accordingly, we have a limited operating history
in our business. Furthermore, we are also facing other risks and challenges,
including a lack of meaningful historical financial data upon which to plan
future budgets, increasing competition, the need to develop strategic
relationships, and other risks described below. We cannot guarantee that we will
be able successfully to implement our business model. An investor in our common
stock must consider the risks, uncertainties, expenses and difficulties
frequently encountered by companies in their early stages of development. As a
result of the absence of meaningful history and experience in our business, we
may easily misjudge the nature or size of our perceived markets, or the amount
of work or capital necessary to complete our pending products or to implement
our business plan.
We may be unable to implement our business strategy to deploy our
products effectively and attract customers.
Although we believe that there is significant demand for our services
and products in the overall healthcare market, there are many reasons why we may
be unable to execute our business strategy, including our possible inability to:
o deploy our services and software applications on a large scale;
o attract a sufficiently large number of public health agencies,
hospitals, health plans, self-insured employers and colleges and
universities to subscribe for our services and software
applications;
o increase awareness of our brand;
o strengthen user loyalty;
o develop and improve our services and software applications;
o continue to develop and upgrade our services and software
applications; and
o attract, retain and motivate qualified personnel.
The healthcare industry is subject to cost pressures.
The healthcare industry is currently under pressure by governmental
and private-sector revenue sources to cut spiraling costs. These pressures will
continue and possibly intensify. Although we believe that our services and
software applications assist public health agencies, hospitals, health plans and
self-insured employers to control the high costs associated with the treatment
of chronic diseases, the pressures to reduce costs immediately may hinder our
ability (or the length of time we require) to obtain new contracts. In addition,
the focus on cost reduction may pressure our customers to restructure contracts
and reduce our fees.
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Government regulation could adversely affect our business.
Many of our existing and potential clients are subject to considerable
state and federal government regulations. Many of these regulations are vaguely
written and subject to differing interpretations that may, in certain cases,
result in unintended consequences that may affect our ability to effectively
deliver our services. Regulatory and legislative efforts currently focus on the
confidentiality of patient identifiable medical information, as evidenced by
such legislation as the Health Insurance Portability and Accountability Act of
1996 (or HIPAA). While we believe that our ability to obtain patient
identifiable medical information for disease management purposes from certain of
our clients is protected in recently released federal regulations governing
medical record confidentiality, state legislation or regulations will preempt
federal legislation if it is more restrictive. Accordingly, new federal or state
legislation or regulations restricting the availability of this information for
disease management purposes would have a material negative effect on us.
Although we are not directly subject to many of the regulations
governing healthcare delivery, our clients, such as public health agencies,
hospitals, health plans, and self-insured employers, must comply with
regulations including the licensing and reimbursement requirements of federal,
state and local agencies. Further, certain of our professional healthcare
employees, such as doctors and nurses, are subject to individual licensing
requirements. All of our healthcare professionals who are subject to licensing
requirements are licensed in the state in which they are physically present.
Multiple state licensing requirements for healthcare professionals who provide
services telephonically over state lines may require us to license some of our
healthcare professionals in more than one state. We continually monitor the
developments in telemedicine. There is no assurance, however, that new judicial
decisions or federal or state legislation or regulations would not increase the
requirement for multi-state licensing of all central operating unit call center
health professionals, which would significantly increase our administrative
costs.
We are indirectly affected by changes in the laws governing health
plan, hospital and public health agency reimbursement under governmental
programs such as Medicare and Medicaid. There are periodic legislative and
regulatory initiatives to reduce the funding of the Medicare and Medicaid
programs in an effort to curtail or reduce overall federal healthcare spending.
Federal legislation has and may continue to significantly reduce Medicare and
Medicaid reimbursements to most hospitals. These reimbursement changes are
negatively affecting hospital revenues and operations. There can be no assurance
that such legislative initiatives or government regulations would not adversely
affect our operations or reduce demand for our services.
Various federal and state laws regulate the relationship among
providers of healthcare services, other healthcare businesses and physicians.
The "fraud and abuse" provisions of the Social Security Act provide civil and
criminal penalties and potential exclusion from the Medicare and Medicaid
programs for persons or businesses who offer, pay, solicit or receive
remuneration in order to induce referrals of patients covered by federal
healthcare programs (which include Medicare, Medicaid, TriCare and other
federally funded health programs). Although we believe that our business
arrangements with our clients are in compliance with these statutes, these fraud
and abuse provisions are broadly written and the full extent of their
application is not yet known. We are therefore unable to predict the effect, if
any, of broad enforcement interpretation of these fraud and abuse provisions.
Our dependence on the Internet and Internet-related technologies
subjects us to frequent change and risks.
Our web-based software applications that form the backbone of our
disease management and comprehensive health management solutions depend on the
continuous, reliable and secure operation of Internet servers and related
hardware and software. In the past, several large Internet commerce companies
have suffered highly publicized system failures, which depressed their stock
prices, caused significant negative publicity and sometimes led to litigation.
It is possible that we may also suffer service outages from time to time. To the
extent that our service is interrupted, our users will be inconvenienced and our
reputation may be diminished. If access to our system becomes unavailable at a
critical time, users could allege we are liable, which could depress our stock
price, cause significant negative publicity and possibly lead to litigation.
Although our computer and communications hardware is protected by physical and
software safeguards, it is still vulnerable to fire, storm, flood, power loss,
telecommunications failures, physical or software break-ins and similar events.
We will not have 100%
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redundancy for all of our computer and telecommunications facilities. A
catastrophic event could have a significant negative effect on our business,
results of operations, and financial condition.
We also depend on third parties to provide certain of our clients with
Internet and online services necessary for access to our servers. It is possible
that our clients will experience difficulties with Internet and other online
services due to system failures, including failures unrelated to our systems.
Any sustained disruption in Internet access provided by third parties could have
a material adverse effect on our business, results of operations and financial
condition.
Finally, we retain confidential healthcare information on our servers.
It is, therefore, critical that our facilities and infrastructure remain secure
and are perceived by clients to be secure. Although we operate our software
applications from a secure facility managed by a reputable third party, our
infrastructure may be vulnerable to physical break-ins, computer viruses,
programming errors or similar disruptive problems. A material security breach
could damage our reputation or result in liability to us.
We may be sued by our users if we provide inaccurate health information
on our website or inadvertently disclose confidential health
information to unauthorized users.
Because users of our website will access health content and services
relating to a medical condition they may have or may distribute our content to
others, third parties may sue us for defamation, negligence, copyright or
trademark infringement, personal injury or other matters. We could also become
liable if confidential information is disclosed inappropriately. These types of
claims have been brought, sometimes successfully, against online services in the
past. Others could also sue us for the content and services that will be
accessible from our website through links to other websites or through content
and materials that may be posted by our users in chat rooms or bulletin boards.
Any such liability will have a material adverse effect on our reputation and our
business, results of operations or financial position.
Our business will be adversely affected if we lose a key employee or
fail to recruit and retain other skilled employee.
Our Chairman and Chief Executive Officer, Frank A. Martin, is an
integral part of our business and our future success greatly depends upon his
retention. Our failure to retain Mr. Martin could significantly reduce our
ability to compete and succeed in the future.
Our future success also depends on our ability to attract, retain and
motivate highly skilled employees. As we secure new contracts and implement our
services and products, we will need to hire additional personnel in all
operational areas. We may be unable to attract, assimilate or retain such highly
qualified personnel. We have in the past experienced, and we expect to
experience in the future, difficulty in hiring and retaining highly skilled
employees with appropriate qualifications. If we do not succeed in attracting
new personnel or retaining and motivating our current personnel, our business
will be adversely affected.
We may be unable to compete successfully against companies offering
similar products.
Many healthcare companies are offering disease management services and
healthcare focused software solutions. Further, a vast number of Internet sites
offer healthcare content, products and services. In addition, traditional
healthcare providers compete for consumers' attention both through traditional
means as well as through new Internet initiatives. Although we believe our
technology-enabled service solutions are unique and better than our
competitors', we compete for customers with numerous other businesses.
Many of these potential competitors are likely to enjoy substantial
competitive advantages compared to us, including:
o greater name recognition and larger marketing budgets and
resources;
o larger customer and user bases;
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o larger production and technical staffs;
o substantially greater financial, technical and other resources;
and
o a wider array of online products and services.
To be competitive, we must continue to enhance our products and
services, as well as our sales and marketing channels and our financial
condition.
We may be exposed to liability claims.
We maintain professional malpractice, errors and omissions and general
liability insurance for all of our locations and operations. Although we believe
that these insurance policies are adequate in amount and coverage for our
current operations, there can be no assurance that coverage is sufficient to
cover all future claims or will continue to be available in adequate amounts or
at a reasonable cost.
I-trax Health Management Solutions, Inc., our operating subsidiary,
had engaged in the physician practice management business. While we are no
longer engaged in that business, Health Management may be subject to unknown
liabilities arising from such prior business operations, which may have a
material adverse effect on our business, operations, financial condition, or
prospects.
Member-Link Systems, Inc., a company we acquired in 1999 by way of a
merger with Health Management, was engaged in the business of marketing, selling
and installing eImmune(R) and AsthmaWatch(R) applications. Since beginning its
operations in 1996 until March 15, 2000, Member-Link and Health Management did
so without obtaining product or professional liability insurance. Accordingly,
if any customer of Member-Link or Health Management should in the future claim
that the software applications Member-Link and Health Management sold prior to
obtaining insurance on March 15, 2000 were defective, we would not have the
protection of insurance in satisfying or defending against such claims. At this
time we are not aware of any such claims. Any such claims, however, could have a
material adverse effect on our business, results of operations, financial
condition and prospects.
Our clients may sue us if any of our software applications or services
is defective, fails to perform properly or injures the user. Even though we
currently have insurance, claims could require us to spend significant time and
money in litigation, to pay significant damages and to reserve for such
liability on our financial statements. At this time we are not aware of any such
claims. However, any such claims, whether or not successful, could seriously
damage our reputation and our business, results of operations or financial
position.
If our intellectual property rights are undermined by third parties,
our business will suffer.
Our intellectual property is important to our business. We rely on a
combination of copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to protect our intellectual property. Our
efforts to protect our intellectual property may not be adequate. Our
competitors may independently develop similar technology or duplicate our
products or services. Unauthorized parties may infringe upon or misappropriate
our products, services or proprietary information. In addition, the laws of some
foreign countries do not protect proprietary rights as well as the laws of the
United States do, and the global nature of the Internet makes it difficult to
control the ultimate destination of our products and services. In the future,
litigation may be necessary to enforce our intellectual property rights or to
determine the validity and scope of the proprietary rights of others. Any such
litigation would probably be time-consuming and costly. We could be subject to
intellectual property infringement claims as the number of our competitors grows
and the content and functionality of software applications and services overlap
with competitive offerings. Defending against these claims, even if not
meritorious, could be expensive and divert our attention from operating our
company. If we become liable to third parties for infringing their intellectual
property rights, we could be required to pay a substantial damage award and
forced to develop noninfringing technology, obtain a license or cease selling
the applications that contain the infringing technology. We may be unable to
develop noninfringing technology or obtain a license on commercially reasonable
terms, or at all. We also intend to rely on a variety of technologies that we
will license from third parties, including any database and Internet server
software, which will be used to operate our applications. These third-party
licenses
-10-
may not be available to us on commercially reasonable terms. The loss of or
inability to obtain and maintain any of these licenses could delay the
introduction of enhancements to our software applications, interactive tools and
other features until equivalent technology could be licensed or developed. Any
such delays could materially adversely affect our business, results of
operations and financial condition.
Provisions of our certificate of incorporation could impede a takeover
of our company even though a takeover may benefit our stockholders.
Our board of directors has the authority, without further action by
the stockholders, to issue from time to time, up to 2,000,000 shares of
preferred stock in one or more classes or series, and to fix the rights and
preferences of such preferred stock. We are subject to provisions of Delaware
corporate law which, subject to certain exceptions, will prohibit us from
engaging in any "business combination" with a person who, together with
affiliates and associates, owns 15% or more of our common stock (referred to as
an interested stockholder) for a period of three years following the date that
such person became an interested stockholder, unless the business combination is
approved in a prescribed manner. Additionally, our bylaws establish an advance
notice procedure for stockholder proposals and for nominating candidates for
election as directors. These provisions of Delaware law and of our certificate
of incorporation and bylaws may have the effect of delaying, deterring or
preventing a change in our control, may discourage bids for our common stock at
a premium over market price and may adversely affect the market price, and the
voting and other rights of the holders of our common stock.
Our officers and directors have effective control of the company and
other stockholders may have little or no voice in corporate management.
Our Chairman, the venture capital firm with which our Chairman is
affiliated, three other members of our management team and two directors
beneficially own, in the aggregate, approximately 30% of the outstanding shares
of our common stock. As a result, these stockholders, acting together,
effectively control the election of directors and matters requiring approval by
our stockholders. Thus, they may be able to prevent corporate transactions such
as future mergers that might be favorable from our standpoint or the standpoint
of the other stockholders.
The loss of any of our very limited number of customers will have a
material adverse effect on our business.
Historically, a very limited number of customers has accounted for a
significant percentage of our revenues. In 2001, our largest customer, Walter
Reed Army Medical Center, accounted for 84% of our revenues. In 2002, our
largest customers, UICI and Aetna Health Management, Inc. accounted for 42% and
30% of our revenues, respectively. We anticipate that our results of operations
in any given period will continue to depend to a significant extent upon a small
number of customers. Accordingly, if we were to lose the business of even a
single customer, our results of operations would be materially and adversely
affected.
If we cannot repay the debenture we sold to Palladin, we will be in
default on a material obligation, which will cause us to suffer a
material adverse event.
We owe Palladin Opportunity Fund, LLC (or Palladin) $2,000,000 under a
6% convertible senior debenture. If Palladin does not convert this sum into our
common stock, this sum, together with interest, must be repaid on February 3,
2004. If we do not have sufficient funds to repay this sum on debenture's due
date, we will be in default on a material obligation and as a result our
operations may be materially and adversely effected.
Investment Risks
The price of our common stock is volatile.
Our stock price has been and we believe will continue to be volatile.
For example, in 2002, the per share price of our stock has fluctuated from a
high of $7.65 to a low of $2.50. The stock's volatility may be influenced by the
market's perceptions of the healthcare sector in general, or other companies
believed to be similar to us or by the market's perception of our operations and
future prospects. Many of these perceptions are beyond our control.
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In addition, our stock is not heavily traded and therefore the ability to
achieve relatively quick liquidity without a negative impact on our stock price
is limited.
Shares eligible for future sale upon the conversion of the debenture
and upon the exercise of issued options and warrants may cause
significant dilution.
Palladin purchased from us a debenture with the principal amount of
$2,000,000. The debenture and accrued interest on the debenture is convertible
into such number of shares of our common stock as determined by dividing the
principal amount and accrued interest thereon by the then current conversion
price. If converted on June 30, 2003, the debenture would convert into
approximately 1,240,960 shares of our common stock. Our stockholders, therefore,
could experience dilution of their investment upon conversion of the debenture.
The shares of common stock issuable upon the conversion of the debenture are
registered under the Securities Act of 1933, as amended (or Securities Act), and
may be sold by Palladin, subject to certain limitations, at any time.
As of June 30, 2003, approximately 5,489,092 shares of our common
stock were reserved for issuance upon exercise of our outstanding warrants and
options in addition to the shares of our common stock reserved for issuance upon
the conversion of the debenture.
We may need additional funds in the future which may not be available
and which may result in dilution of the value of our common stock
In the future, we may need to raise additional funds, which may not be
available on favorable terms, if at all. If adequate funds are not available on
acceptable terms, we may be unable to fund our business growth plans. In
addition, if funds are available, the issuance of securities could dilute the
value of shares of our common stock and cause the market price to fall.
-12-
MARKET FOR OUR COMMON STOCK
Our common stock trades on the American Stock Exchange under the
symbol "DMX." Prior to January 15, 2003, our common stock was quoted on
Over-the-Counter Bulletin Board under the symbol "IMTX" and "ITRX." The
following table sets forth the high and low closing prices for our common stock
for the periods indicated. All closing prices have been adjusted to reflect a
1-for-5 reverse stock split effected as of close of business on January 3, 2003.
High Low
---- ----
2003
Third Quarter $ 3.790 $ 2.600
Second Quarter 3.000 1.510
First Quarter 5.000 1.370
2002
Fourth Quarter 4.300 2.500
Third Quarter 5.100 2.750
Second Quarter 6.625 4.150
First Quarter 7.650 5.100
2001
Fourth Quarter 8.350 1.800
Third Quarter 3.850 1.800
Second Quarter 5.155 2.900
First Quarter 15.000 3.440
We obtained the information presented above from Nasdaq.com.
As of October 10, 2003, there were approximately 480 registered
holders of our common stock. On October 13, 2003, the last reported sales price
of our common stock was $3.66.
Dividend Policy
We have never paid or declared any cash dividends on our common stock
or other securities and do not anticipate paying cash dividends in the
foreseeable future.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of our common
stock offered under this prospectus. However, we may receive proceeds from the
exercise of the warrants by the selling shareholders, which proceeds will be
used for general corporate purposes.
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SELLING SECURITY HOLDERS
We are registering for offer and sale by the applicable holders:
o up to 1,211,631 shares of our common stock; and
o up to 416,667 shares of common stock issuable upon the exercise
of outstanding warrants and conversion of a convertible
promissory note.
The selling shareholders may offer their shares for sale on a
continuous basis pursuant to Rule 415 under the Securities Act.
All of the selling shareholders' shares covered by this prospectus
will become tradable upon conversion on the effective date of the registration
statement of which this prospectus is a part.
Based on information provided to us by the selling shareholders, the
following table sets forth ownership and registration information regarding the
shares held by the selling shareholders.
Number of
Shares of Number of
Common Stock Shares of Common Stock Owned After
Owned Before Common Stock Offering Is Complete
Name of Selling Shareholder Offering (1) Offered
Number of
Shares Percentage
------------------------------------------------- -------------- ----------------- -------------- ----------------
Hans C. Kastensmith 465,828 420,114 45,714
The Del Mar Consulting Group, Inc. 490,000 475,412 14,588
Joseph and Greta Shamy, JT (2) 609,830 338,630 271,200 2.5%
Michael Steinberg (3) 125,000 125,000 --
Barry Honig (3) 125,000 125,000 --
Robert Prag 43,000 43,000 --
Andrew Friis 33,000 33,000 --
Jean F. Martin 42,500 20,000 22,500
Charles O. Howey Trust 20,000 20,000 --
Evan Taber 7,142 7,142 --
Marco Palatini 8,000 8,000 --
Marc Rubin 5,000 5,000 --
Mento Soponis 4,000 4,000 --
Leo C. Mueller, III 2,000 2,000 --
Leo C. Mueller, JR 2,000 2,000 --
------------- ----------------- --------------
TOTAL: 1,987,300 1,628,298 359,002
(1) The actual number of shares of common stock offered in this
prospectus, and included in the registration statement of which
this prospectus is a part, includes such additional number of
shares of common stock as may be issued or issuable by reason of
any stock split, stock dividend or similar transaction involving
the common stock, in accordance with Rule 416 under the
Securities Act.
(2) The aggregate number of shares offered include 66,667 shares of
common stock issuable upon the conversion at $1.50 per share of
a convertible promissory note in the principal amount of
$100,000 and 100,000 share of common stock issuable upon the
exercise of a warrant at $1.50 per share.
(3) The offered shares are issuable upon the exercise of a warrant
at $1.50 per share.
-14-
Material Relationships and Transactions
o Hans C. Kastensmith served as a director and vice chairman of
I-trax from February 2001 through May 2002. Of the total shares
to be offered for resale by Mr. Kastensmith under this
prospectus, Mr. Kastensmith acquired 285,714 shares in a private
placement initiated by I-trax on May 1, 2003 and closed on July
2, 2003. In this private placement, I-trax issued an aggregate
of 1,311,682 shares of common stock at $1.75 per share to
approximately 16 participants. We later refer to this private
placement as the "Summer 2003 Private Placement." The balance of
134,400 shares to be offered for resale by Mr. Kastensmith under
this prospectus, Mr. Kastensmith acquired from third parties.
o The Del Mar Consulting Group, Inc. provides I-trax consulting
services under a consulting agreement. The agreement has been
effective as of May 15, 2003 and lasts one year. Del Mar's
services include assisting I-trax with stockholder and investor
communications, business strategy development and general public
relations. I-trax common stock held by Del Mar and covered by
this prospectus was issued to Del Mar as compensation for its
services under the consulting agreement. Robert Prag exercises
sole voting and dispositive powers with respect to the shares to
be offered for resale by Del Mar under this prospectus. Mr. Prag
also acquired the I-trax shares to be offered by him for resale
under this prospectus in the Summer 2003 Private Placement.
o Of the total shares to be offered for resale by Joseph and Greta
Shamy under this prospectus, Mr. and Mrs. Shamy acquired 171,963
shares in the Summer 2003 Private Placement. Of the remaining
balance, 66,667 shares are issuable upon the conversion of a
convertible promissory note in the principal amount of $100,000
and 100,000 share are issuable upon the exercise of a warrant.
Mr. and Mrs. Shamy acquired the convertible promissory note and
warrant pursuant to a subscription agreement dated March 30,
2003. The conversion price under the convertible promissory
note, and the exercise price under the warrant, is $1.50.
o Michael Steinberg provides I-trax consulting services under a
consulting agreement entered into as of June 2, 2003 and lasting
a term of one year. Mr. Steinberg's consulting services include
assisting I-trax with introductions to research analysts and
other members of the investment community. A warrant to purchase
125,000 shares of I-trax common stock at $1.50 per share was
issued to Mr. Steinberg as compensation for his services under
the consulting agreement. The warrant is exercisable for 5
years.
o Barry Honig provides I-trax consulting services under a
consulting agreement entered into as of June 2, 2003 and lasting
a term of one year. Mr. Honig's consulting services include
assisting I-trax with introductions to research analysts and
other members of the investment community. A warrant to purchase
125,000 shares of I-trax common stock at $1.50 per share was
issued to Mr. Honig as compensation for his services under the
consulting agreement. The warrant is exercisable for 5 years.
Mr. Honig is an affiliate of a registered broker-dealer. Mr.
Honig acquired the warrant covering the shares of common stock
offered under this prospectus for resale in his personal
ordinary course of business. Mr. Honig had no agreements,
arrangements or understandings with any other persons, either
directly or indirectly, to dispose of I-trax securities.
o Jean F. Martin is the mother of Frank A. Martin, chief executive
officer and director of I-trax. Mr. Martin exercises investment
control and thus dispositive power over the I-trax common stock
owned by his mother. The shares to be offered for resale by Mrs.
Martin under this prospectus were purchased by Mrs. Martin in
the Summer 2003 Private Placement.
o Each of Andrew Friis and Evan Taber is an affiliate of a
registered broker-dealer. Each acquired the shares to be offered
for resale under this prospectus in the Summer 2003 Private
Placement and for resale in his personal ordinary course of
business. Neither of these individuals had agreements,
arrangements or understandings with any other persons, either
directly or indirectly, to dispose of I-trax securities.
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o Charles O. Howey Trust, Marco Palatini, Marc Rubin, Mento
Soponis, Leo C. Mueller, III and Leo C. Mueller, JR acquired the
shares to be offered for resale under this prospectus in a
private placement closed in January 2002. In this private
placement, I-trax issued an aggregate of 1,092,995 shares at
$2.50 per share to approximately 50 participants.
PLAN OF DISTRIBUTION
The shares being offered by the selling shareholders or their
respective pledgees, donees, transferees or other successors in interest, will
be sold from time to time in one or more transactions, which may involve block
transactions:
o on the American Stock Exchange or on such other market on which
the common stock may from time to time be trading;
o in privately-negotiated transactions;
o through the writing of options on the shares;
o short sales; or
o any combination thereof.
The sale price to the public may be:
o the market price prevailing at the time of sale;
o a price related to such prevailing market price;
o at negotiated prices; or
o such other price as the selling shareholders determine from time
to time.
The shares may also be sold pursuant to Rule 144. The selling
shareholders shall have the sole and absolute discretion not to accept any
purchase offer or make any sale of shares if they deem the purchase price to be
unsatisfactory at any particular time.
The selling shareholders or their respective pledgees, donees,
transferees or other successors in interest, may also sell the shares directly
to market makers acting as principals or broker-dealers acting as agents for
themselves or their customers. These broker-dealers may be compensated with
discounts, concessions or commissions from the selling shareholders or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both. The compensation as to a particular
broker-dealer might be greater than customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. The selling shareholders may sell shares of common stock in
block transactions to market makers or other purchasers at a price per share,
which may be below the then market price. The selling shareholders cannot assure
that all or any of the shares offered in this prospectus will be issued to, or
sold by, the selling shareholders. The selling shareholders and any brokers,
dealers or agents, upon effecting the sale of any of the shares offered in this
prospectus, may be deemed "underwriters" as that term is defined under the
Securities Act or the Securities Exchange Act of 1934 (or Exchange Act) or the
rules and regulations under such acts.
The selling shareholders, alternatively, may sell all or any part of
the shares offered in this prospectus through an underwriter. No selling
stockholder has entered into any agreement with a prospective underwriter and
there is no assurance that any such agreement will be entered into. If a selling
shareholders enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revisions to this prospectus.
-16-
The selling shareholders and any other persons participating in the
sale or distribution of the shares will be subject to applicable provisions of
the Exchange Act and the rules and regulations under the Exchange Act,
including, without limitation, Regulation M. These provisions may restrict
certain activities of, and limit the timing of purchases and sales of any of the
shares by, the selling shareholders or any other such person. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. All of these limitations may affect the marketability of the shares.
AVAILABLE INFORMATION
We file reports, proxy statements and other information with the SEC
(File No. 0-30275). Copies of these reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the SEC at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
Copies of these materials can also be obtained by mail at prescribed
rates from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a website that contains reports, proxy statements and other
information regarding our company. The address of this website is
http://www.sec.gov.
We have filed a registration statement on Form S-3 under the
Securities Act with the SEC with respect to the shares of our common stock
covered by this prospectus. This document constitutes the prospectus of I-trax
filed as part of that registration statement. This document does not contain all
of the information set forth in the registration statement because some parts of
the registration statement are omitted as provided by the rules and regulations
of the SEC. You may inspect and copy the registration statement at any of the
addresses listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents we have filed with the SEC (File No. 0-30275)
pursuant to the Exchange Act are incorporated herein by reference:
o our Annual Report on Form 10-KSB for the year ended December 31,
2002, filed on April 15, 2003,
o our amended Quarterly Reports on Form 10-QSB for the quarters
ended March 31, 2002, June 30, 2002 and September 30, 2002, each
filed on May 15, 2003,
o our Quarterly Report on Form 10-QSB for the quarter ended March
31, 2003, filed on May 15, 2003, and our Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2003, filed on August
14, 2003,
o our Current Reports on Form 8-K filed on February 12, 2003,
February 19, 2003, April 22, 2003, May 19, 2003 and August 15,
2003,
o the description of our common stock, $0.01 par value per share,
and associated rights, contained in our registration statement
on Form 8-A, filed on January 14, 2003, including any amendment
or report filed for the purpose of updating this description,
and
o all reports and other documents filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this prospectus and prior to the termination of the
offering.
Any statement contained in a document incorporated by reference in
this prospectus will be deemed to be incorporated by reference in this
prospectus and to be part of this prospectus from the date of filing of the
document. Any statement modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part
-17-
of this prospectus. We will provide upon written or oral request without charge
to each person to whom this prospectus is delivered a copy of any or all of the
documents which are incorporated in this prospectus by reference (other than
exhibits to those documents unless those exhibits are specifically incorporated
by reference into the documents that this prospectus incorporates). Written
requests for copies should be directed to I-trax, Inc., Investor Relations, One
Logan Square, Suite 2615, 130 N. 18th Street, Philadelphia, Pennsylvania 19103.
Our telephone number is (215) 557-7488.
LEGAL MATTERS
The validity of the shares of our common stock offered by this
prospectus will be passed upon for us by our Vice President, General Counsel and
Secretary.
EXPERTS
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-KSB of I-trax, Inc. for the year ended December
31, 2002 have been so incorporated in reliance on the reports of Goldstein Golub
Kessler LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting
The financial statements incorporated in this prospectus by reference
to the Annual Report on Form 10-KSB of I-trax, Inc. for the year ended December
31, 2001 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
-18-
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by
I-trax in connection with the sale of the securities being registered. All
amounts are estimates except the SEC registration fee:
SEC registration fee $ $373
Printing and engraving expenses 1,000
Accounting fees and expenses 6,000
Attorneys' fees and expenses 2,000
Transfer agent's fees and expenses 1,000
Miscellaneous 627
------------
Total: $ 11,000
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145(a) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
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 or enterprise, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding 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, had no cause to believe his conduct was unlawful.
Section 145(b) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit 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, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
court in which such action or suit was brought shall determine that, despite
such adjudication of liability, such person is fairly and reasonably entitled to
be indemnified for such expenses which the court shall deem proper.
Section 145 of the Delaware General Corporation Law further provides
that to the extent a director or officer of a Delaware corporation has been
successful in the defense of any action, suit or proceeding referred to in
subsections (a) or (b) of Section 145 or in the defense of any claim, issue or
matter therein, he shall be indemnified against any expenses actually and
reasonably incurred by him in connection therewith; that the indemnification
provided for by Section 145 shall not be deemed exclusive of any rights to which
the indemnified party may be entitled and the corporation may purchase and
maintain insurance on behalf of a director or officer of the corporation 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 Section 145.
Section 102(b)(7) of the Delaware General Corporation Law permits a
Delaware corporation to include a provision in its Certificate of Incorporation,
and I-trax's Certificate of Incorporation contains such a provision, to the
-II-1-
effect that, subject to certain exceptions, a director of a Delaware corporation
is not personally liable to the corporation or its stockholders for monetary
damages for a breach of his fiduciary duty as a director.
I-trax's By-laws also provide that I-trax shall indemnify its
directors and officers and, to the extent permitted by the Board of Directors,
I-trax's employees and agents, to the full extent permitted by and in the manner
permissible under the laws of the State of Delaware. In addition, I-trax's
By-laws permit the Board of Directors to authorize the Company to purchase and
maintain insurance against any liability asserted against any of the Company's
directors, officers, employees or agents arising out of their capacity as such.
ITEM 16. EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
4.1** Convertible Promissory Note of I-trax, Inc. issued to
Joseph Shamy and Greta Shamy JT on March 30, 2003.
4.2** Warrant certificate of I-trax, Inc. issued to Joseph
Shamy and Greta Shamy JT on March 30, 2003.
4.3** Form of warrant certificate of I-trax, Inc. issued to
each of Michael Steinberg and Barry Honing on June 2,
2003.
5* Opinion of Vice President, General Counsel and
Secretary.
23.1* Consent of Vice President, General Counsel and
Secretary. (Included in Exhibit 5.)
23.2** Consent of Goldstein Golub Kessler LLP.
23.3** Consent of PricewaterhouseCoopers LLP.
24 Power of Attorney. (Included in signature page.)
_____________________________
* Previously filed.
** Filed with this registration statement.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer 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 small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection
-II-2-
with the securities being registered, the small business issuer will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing of this Registration Statement on Form S-3 and has
duly caused this registration statement to be singed on its behalf by the
undersigned, thereunto duly authorized in the City of Philadelphia, Commonwealth
of Pennsylvania on October 14, 2003.
I-TRAX, INC.
By: /s/ Frank A. Martin
-----------------------------
Frank A. Martin, Chairman and
Chief Executive Officer
By: /s/ William S. Wheeler
--------------------------------
William S. Wheeler, Chief
Financial Officer
(Principal Financial and
Accounting Officer)
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement on Form S-3 was signed by the following persons in
the capacities and on the dates stated.
Each person whose signature appears below in so signing also makes,
constitutes and appoints Frank A. Martin and William S. Wheeler and each of
them, his or her true and lawful attorney-in-fact, with full power of
substitution, for him or her in any and all capacities, to execute and cause to
be filed with the Securities and Exchange Commission any and all amendments and
post-effective amendments to this Registration Statement and any related
registration statement (and any and all amendments and post-effective amendments
thereto) contemplated by Rule 462 under the Securities Act of 1933, as amended,
in each case with exhibits thereto and other documents in connection therewith
and hereby ratifies and confirms all that said attorney-in-fact or his or her
substitute or substitutes may do or cause to be done by virtue hereof.
Signature Title Date
---------------------- --------------------------------- -----------------
/s/ Frank A. Martin Chairman, Chief Executive Officer, October 14, 2003
---------------------- President and Director
Frank A. Martin
* Director October 14, 2003
----------------------
John Blazek
* Director October 14, 2003
----------------------
David R. Bock
* Director October 14, 2003
----------------------
Philip D. Green
* Director October 14, 2003
----------------------
Dr. Michael M.E. Johns
* Director October 14, 2003
----------------------
Dr. Arthur N. Leibowitz
* Director October 14, 2003
----------------------
Dr. David Nash
* Director October 14, 2003
----------------------
John R. Palumbo
-II-4-
* Director October 14, 2003
----------------------
R. Dixon Thayer
/s/ William S. Wheeler Director October 14, 2003
----------------------
William S. Wheeler
*By: Frank A. Martin, Attorney in Fact.
---------------
-II-5-