New 8K filing.
From Free edgar:
<April 30, 1998
To our Shareholders:
During 1997, and the early part of 1998, the company initiated several
important steps to strengthen its capital structure, better define and achieve
its long-term goals, and position the company for future growth.
We received a new $5.0 million revolving credit line from HCFP Funding, Inc.
of Chevy Chase, Maryland, which helped to improve cash flow and reduce
interest expense for the year. We disposed of several assets in the company's
supplemental staffing business which allowed us to liquidate certain
short-term debt and provided additional working capital to support growth.
The company also repurchased the majority of the outstanding units of
convertible preferred stock and warrants from the 1997 private placement, and
exchanged warrants from the 1996 and 1997 private placements for newly issued
shares of the company's common stock, which combined, reduced the outstanding
number of warrants. We will continue to seek alternatives to simplify our
capital structure in an effort to achieve our long-term business initiatives.
Most importantly, the disposition of assets from the sale of the company's
staffing business also allowed us to acquire a medical information management
technology company, Cymedix Lynx Corporation, and fund the commercial
availability of its Internet-based Cymedix Lynx software product, a secure,
patent-pending medical communications software. To reflect our new business
direction in the information management technology market and to provide
unique market identification, we changed our name to Medix Resources, Inc.
These combined initiatives have positioned Medix to take advantage of the many
opportunities in the growing medical information technology marketplace,
currently estimated at $40 billion.
To date, we have completed two commercial sales of the Cymedix Lynx product.
The first represents a three-year contract with Loyola University Medical
Center of Chicago, which will be networked to at least 200 physicians with the
medical center's laboratory services outreach program. Affiliate hospitals of
Loyola are expected to be added in the future, thereby increasing the
potential number of physicians utilizing Cymedix Lynx throughout the Chicago
area to more than 1,000. The second contract is a multi-year licensing
agreement with Medical Technology Corporation (MTC), a division of MTC
Laboratory, Inc. of Miami. Under the terms of the agreement, Cymedix Lynx
will be offered to a minimum of 200 physician offices affiliated with MTC
throughout Southern Florida.
We believe our existing relationships with key decision makers among our
business base of healthcare institutions will allow us to maximize the growth
opportunities in the medical information technology market, which has emerged
as one of the fastest-growing segments in the healthcare industry today.
CONTINUED LISTING ON NASDAQ SMALLCAP MARKET
For over twelve months, the company's Common Stock has traded below $1.00 per
share, which is the minimum bid price for continued listing on the Nasdaq
SmallCap Market. The company had maintained its listing on the Nasdaq
SmallCap Market by meeting an alternative test. On August 25, 1997, The
Nasdaq Stock Market, Inc. (Nasdaq) announced revised initial and continuing
listing standards for the Nasdaq SmallCap Market, which included the
elimination of the alternative test to the $1.00 minimum bid. In order to
comply with this Nasdaq standard, the Board of Directors has proposed a
reverse stock split (details are contained in the enclosed proxy solicitation
material). On March 31, 1998, Nasdaq informed the company that it is not in
compliance with a second test of (1) tangible net worth of $2.0 million (while
the Company's balance sheet shows net assets of in excess of this amount, a
substantial portion of those assets are intangible); (2) a market
capitalization of $35.0 million; or (3) net income in two of the last three
years of $500,000. On April 15, 1998, the company filed a plan to regain
compliance with the Nasdaq requirement. On April 27, 1998, Nasdaq rejected
that plan and determined that the company's securities, including its common
stock, would be delisted at the close of business on Friday, May 1, 1998. The
company has appealed this decision, which will stay the delisting pending an
oral hearing. However, the company can give no assurance that its appeal will
be successful or that the company's common stock will remain listed on the
Nasdaq SmallCap Market. If the company's securities are delisted, the company
anticipates that market price quotations of its common stock will be listed on
the OTC Bulletin Board, which is not as widely published as the market price
quotations of the Nasdaq SmallCap Market.
I would personally like to thank our customers, shareholders and employees who
have continued to support the company's ongoing development efforts.
Management is excited about the opportunities for growth in the medical
information technology marketplace, and look forward to reporting on our
progress for the remainder of 1998 and beyond.
Sincerely,
John P. Yeros, Chairman and Chief Executive Officer>
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