As filed with the Securities and Exchange Commission on August 8, 2001
Registration No. 333-59324
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 2
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERIPATH, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0642485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
James C. New
Chief Executive Officer
AmeriPath, Inc.
7289 Garden Road, Suite 200
Riviera Beach, Florida 33404
Telephone: (561) 845-1850
Facsimile: (561) 845-0129
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices and agent for service)
The Commission is requested to send copies of all communications to:
J. Vaughan Curtis, Esq.
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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. [ ]
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The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this 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. The
selling stockholders may not sell these securities until the registration
statement relating to these securities that we have filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
Subject to Completion, Dated August 8, 2001
PROSPECTUS
664,359 Shares
AMERIPATH, INC.
Common Stock
The stockholders named in the table included in the "Selling
Stockholders" section of this prospectus, which begins on page 13, are offering
and selling up to 664,359 shares of our common stock under this prospectus.
Of the 664,359 shares covered by this prospectus, 659,274 shares are
presently issued and outstanding and 5,085 shares have been reserved for
issuance pursuant to the exercise of warrants held by some of the selling
stockholders. Those selling stockholders must first exercise the warrants and
acquire the underlying shares from us before they can resell those shares under
this prospectus.
Our common stock is listed on the Nasdaq National Market under
the symbol "PATH". On August 6, 2001, the last sale price of our common stock as
reported by Nasdaq was $32.20 per share.
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This investment involves risks. See "Risk Factors" beginning on page 3.
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Neither the Securities and Exchange Commission nor any state 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 ___________ ___, 2001
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.................................................... 3
RISK FACTORS.......................................................... 3
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS............ 12
USE OF PROCEEDS....................................................... 12
SELLING STOCKHOLDERS.................................................. 13
PLAN OF DISTRIBUTION.................................................. 17
LEGAL MATTERS......................................................... 18
EXPERTS............................................................... 18
WHERE YOU CAN FIND MORE INFORMATION................................... 18
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................... 19
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PROSPECTUS SUMMARY
We are the largest physician and laboratory company focused on
providing anatomic pathology, cancer diagnostics, genomics, and healthcare
information services. Since the first quarter of 1996, we have completed the
acquisition of 49 physician practices located in 21 states. These practices are
either directly owned or managed by us through one of our subsidiaries. Our 419
pathologists provide medical diagnostic services in outpatient laboratories
owned, operated and managed by us, and in hospitals and outpatient ambulatory
surgery centers. Of these pathologists, 413 are board certified in anatomic and
clinical pathology, and 190 are also board certified in a subspecialty of
anatomic pathology, including dermatopathology (study of diseases of the skin),
hematopathology (study of diseases of the blood) and cytopathology (study of
abnormalities of the cells).
On November 30, 2000, we consummated a merger with Inform DX in which
we (1) issued an aggregate of approximately 2.6 million shares of our common
stock in exchange for all of the outstanding shares of capital stock of Inform
DX and (2) assumed certain outstanding stock options and warrants of Inform DX.
We also granted the former stockholders and warrant holders of Inform DX rights
to register for resale up to one-third of the shares of our common stock they
received in the merger or have the right to receive pursuant to the warrants we
assumed. We have prepared this prospectus and registered the shares offered by
the selling stockholders in order to comply with these registration rights. The
selling stockholders acquired all of the shares of our common stock that they
are offering under this prospectus or warrants to purchase such shares in
connection with the Inform DX merger.
Our principal executive offices are located at 7289 Garden Road, Suite
200, Riviera Beach, Florida 33404. Our telephone number is (561) 845-1850. Our
Internet address is www.ameripath.com. The information contained on our web site
is not part of this prospectus.
RISK FACTORS
Any investment in our common stock involves a high degree of risk. You
should carefully consider each of the following risks and all of the other
information set forth in this prospectus before purchasing our common stock. If
any of the following risks actually occur, our business prospects, financial
condition and results of operations could be materially adversely affected and
the trading price of our common stock could decline. In any such case, you could
lose all or part of your investment in our company.
Our business could be harmed by future interpretation or implementation of state
laws regarding prohibitions on the corporate practice of medicine.
We acquire or affiliate with physician practices located in many states
across the country. However, the laws of many states prohibit business
corporations, including AmeriPath and its subsidiaries, from owning corporations
that employ physicians, or from exercising control over the medical judgments or
decisions of physicians. These laws and their interpretations vary from state to
state and are enforced by both the courts and regulatory authorities, each with
broad discretion. The manner in which we operate each practice is determined
primarily by the corporate practice of medicine restrictions of the state in
which the practice is located and other applicable regulations.
We believe that we are currently in material compliance with the
corporate practice of medicine laws in each of the states in which we operate.
Nevertheless, it is possible that regulatory authorities or other parties may
assert that we are engaged in the unauthorized corporate practice of medicine.
If such a claim were successfully asserted in any jurisdiction, we could be
subject to civil and criminal penalties and could be required to restructure our
contractual and other arrangements. Any restructuring of our
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contractual and other arrangements with physician practices could result in
lower revenues from such practices, increased expenses in the operation of such
practices and reduced influence over the business decisions of such practices.
Alternatively, some of our existing contracts could be found to be illegal and
unenforceable, which could result in the termination of those contracts and an
associated loss of revenue. In addition, expansion of our operations to other
"corporate practice" states may require structural and organizational
modification to the form of relationship that we currently have with physicians,
affiliated practices and hospitals. Such modifications could result in less
profitable relationships with physicians, affiliated practices and hospitals,
less influence over the business decisions of physicians and affiliated
practices and failure to achieve our growth objectives.
We could be hurt by future interpretation or implementation of federal
anti-kickback laws.
Federal anti-kickback laws and regulations prohibit the offer, payment,
solicitation and receipt of any form of remuneration in exchange for referrals
of products or services for which payment may be made by Medicare, Medicaid or
other federal health care programs. Violations of federal anti-kickback laws are
punishable by monetary fines, civil and criminal penalties and exclusion from
participation in Medicare, Medicaid and other federal health care programs.
Several states have similar laws. While we believe our operations are in
material compliance with applicable Medicare and fraud and abuse laws, including
the anti-kickback law, there is a risk that the federal government might
investigate our arrangements with physicians and third parties. Such
investigations, regardless of their outcome, could damage our reputation and
adversely affect important business relationships that we have with third
parties, including physicians, hospitals and private payors. If our arrangements
with physicians and third parties were found to be illegal, we could be subject
to civil and criminal penalties, including fines and possible exclusion from
participation in government payor programs. Significant fines could cause
liquidity problems and adversely affect our results of operations. Exclusion
from participation in government payor programs would eliminate an important
source of revenue and adversely affect our business.
Our business could be harmed by future interpretation or implementation of the
federal Stark Law and other state and federal anti-referral laws.
We are also subject to federal and state statutes and regulations
banning payments for referrals of patients and referrals by physicians to health
care providers with whom the physicians have a financial relationship. The
federal Stark Law applies to Medicare and Medicaid and prohibits a physician
from referring patients for certain services, including laboratory services, to
an entity with which the physician has a financial relationship. Financial
relationship includes both investment interests in an entity and compensation
arrangements with an entity. Many states have similar laws. These state laws
generally apply to services reimbursed by both governmental and private payors.
Violations of these federal and state laws may result in prohibition of payment
for services rendered, loss of licenses, fines, criminal penalties and exclusion
from governmental and private payor programs. We have financial relationships
with our physicians, as defined by the federal Stark Law, in the form of
compensation arrangements, ownership of our common stock and contingent
promissory notes issued by us in connection with acquisitions. While we believe
that our financial relationships with physicians are in material compliance with
applicable laws and regulations, government authorities might take a contrary
position. If our financial relationships with physicians were found to be
illegal, we could be subject to civil and criminal penalties, including fines,
exclusion from participation in government and private payor programs and
requirements to refund amounts previously received from government and private
payors. In addition, expansion of our operations to new jurisdictions, or new
interpretations of laws in our existing jurisdictions, could require structural
and organizational modifications of our relationships with physicians to comply
with that jurisdiction's laws. Such structural and organizational modifications
could result in lower profitability and failure to achieve our growth
objectives.
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We could be hurt by future interpretation or implementation of state and federal
anti-trust laws.
In connection with the corporate practice of medicine laws, the
physician practices with which we are affiliated in some states are organized as
separate legal entities. As such, the physician practice entities may be deemed
to be persons separate both from us and from each other under the antitrust laws
and, accordingly, subject to a wide range of laws that prohibit anti-competitive
conduct among separate legal entities. In addition, we are seeking to acquire or
affiliate with established and reputable practices in our target geographic
markets. While we believe that we are in compliance with these laws and intend
to comply with any laws that may apply to our development of integrated health
care delivery networks, courts or regulatory authorities could nevertheless
investigate our business practices. If our business practices were found to
violate these laws, we could be required to pay fines, penalties and damage
awards and we could be required to restructure our business in a manner that
would reduce our profitability or impede our growth.
Our business could be harmed by future interpretation or implementation of the
Health Care Insurance Portability and Accountability Act
The Health Care Insurance Portability and Accountability Act, or HIPAA,
created provisions that impose criminal penalties for fraud against any health
care benefit program, for theft or embezzlement involving health care and for
false statements in connection with the payment of any health benefits. The
HIPAA provisions apply not only to federal programs, but also to private health
benefit programs. HIPAA also broadened the authority of the OIG to exclude
participants from federal health care programs. Because of the uncertainties as
to how the HIPAA provisions will be enforced, we are currently unable to predict
their ultimate impact on us. Compliance with HIPAA could cause us to modify our
business operations in a manner that would increase our operating costs or
impede our growth. In addition, although we are unaware of any current
violations of HIPAA, if we were found to be in violation of HIPPAA, the
government could seek penalties against us or seek to exclude us from
participation in government payor programs.
We charge our clients on a fee-for-service basis, so we incur financial risk
related to collections as well as potentially long collection cycles when
seeking reimbursement from third party payors.
Substantially all of our net revenues are derived from our practices'
charging for services on a fee-for-service basis. Accordingly, we assume the
financial risk related to collection, including the potential uncollectability
of accounts, long collection cycles for accounts receivable and delays attendant
to reimbursement by third party payors, such as governmental programs, private
insurance plans and managed care organizations. Increases in write-offs of
doubtful accounts, delays in receiving payments or potential retroactive
adjustments and penalties resulting from audits by payors may adversely affect
our operating cash flow and liquidity, require us to borrow funds to meet our
current obligations, reduce our profitability, impede our growth or otherwise
adversely affect our business.
We rely upon reimbursement from government programs for a significant portion of
our revenues, and therefore our business would be harmed if reimbursement rates
from government programs decline.
We derive approximately 20% of our collections from payments made by
government sponsored health care programs (principally Medicare and Medicaid).
These programs are subject to substantial regulation by federal and state
governments. Any changes in reimbursement regulations, policies, practices,
interpretations or statutes that place limitations on reimbursement amounts, or
changes in reimbursement coding practices, could adversely affect our business
by reducing revenues and lowering profitability. Increasing budgetary pressures
at both the federal and state level and concerns over escalating costs of health
care have led, and may continue to lead, to significant reductions in health
care
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reimbursements. State concerns over the growth in Medicaid expenditures also
could result in payment reductions. In addition, Medicare, Medicaid and other
government sponsored health care programs are increasingly shifting to forms of
managed care, which generally offer lower reimbursement rates. Some states have
enacted legislation to require that all Medicaid patients be transitioned to
managed care organizations, which could result in reduced payments to us for
such patients. Similar legislation may be enacted in other states. In addition,
a state-legislated shift of Medicaid patients to a managed care organization
could cause us to lose some or all Medicaid business in that state if we were
not selected by the managed care organization as a participating provider.
Additionally, funds received under all health care reimbursement programs are
subject to audit with respect to the proper billing for physician services and,
accordingly, retroactive adjustments of revenue from these programs could occur.
We expect that there will continue to be proposals to reduce or limit Medicare
and Medicaid reimbursements.
There has been an increasing number of state and federal investigations of
hospitals and hospital laboratories, which may increase the likelihood of
investigations of our business practices.
Significant media and public attention has been focused on the health
care industry due to ongoing federal and state investigations reportedly related
to referral and billing practices, laboratory and home health care services and
physician ownership and joint ventures involving hospitals. Most notably, HCA is
reportedly under investigation with respect to such practices. We operate
laboratories on behalf of numerous hospitals and have numerous contractual
agreements with hospitals, including 28 HCA hospitals as of June 30, 2001.
Therefore, the government's ongoing investigation of HCA or other hospital
operators could result in governmental investigations of one or more of our
operations. In addition, the OIG and the Department of Justice have initiated
hospital laboratory billing review projects in certain states and are expected
to extend such projects to additional states, including states in which we
operate hospital laboratories. These projects further increase the likelihood of
governmental investigations of laboratories that we own or operate. Although we
monitor our billing practices and hospital arrangements for compliance with
prevailing industry practices under applicable laws, such laws are complex and
constantly evolving and it is possible that governmental investigators may take
positions that are inconsistent with our practices or industry practices. The
government's investigations of entities with which we contract may have other
adverse effects on us, including termination or amendment of one or more of our
contracts or the sale of hospitals potentially disrupting the performance of
services under our contracts. In addition, some indemnity insurers and other
non-governmental payors have sought repayment from providers, including
laboratories, for alleged overpayments.
The heightened scrutiny of Medicare and Medicaid billing practices in recent
years may increase the possibility that we will become subject to costly and
time consuming investigations.
Payors periodically reevaluate the services for which they provide
reimbursement. In some cases, government payors such as Medicare also may seek
to recoup payments previously made for services determined not to be
reimbursable. Any such action by payors would adversely affect our revenues and
earnings. Moreover, the federal government has become more aggressive in
examining laboratory billing practices and seeking repayments and penalties
allegedly resulting from improper billing for services (e.g., the billing codes
used). While the primary focus of this initiative has been on hospital
laboratories and on routine clinical chemistry tests, which comprise only a
portion of our revenues, the scope of this initiative could expand and it is not
possible to predict whether or in what direction the expansion might occur.
While we believe that our practices are proper and do not include any allegedly
improper practices now being examined, the government could broaden its
initiative to focus on the type of services we furnish. If this were to happen,
we might be required to repay money. Furthermore, HIPAA and Operation Restore
Trust have strengthened the powers of the OIG and increased the funding for
Medicare and Medicaid audits and investigations. As a result, the OIG is
currently expanding the scope of its health care audits and investigations.
Federal and state audits and inspections, whether on a scheduled or
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unannounced basis, are conducted from time to time at our facilities. If a
negative finding is made as a result of such an investigation, we could be
required to change coding practices or repay amounts paid for incorrect
practices.
We derive a significant portion of our revenues from short-term hospital
contracts and hospital relationships that can easily be terminated.
Our hospital contracts typically have terms of one to five years and
automatically renew for additional one-year terms unless otherwise terminated by
either party. The contracts generally provide that the hospital may terminate
the agreement prior to the expiration of the initial or any renewal term. We
also have business relationships with hospitals that are not reduced to written
contracts and that may be terminated by the hospitals at any time. Loss of any
particular hospital contract or relationship would not only result in a loss of
net revenue to us under that contract or relationship, but may also result in a
loss of outpatient net revenue that may be derived from our association with the
hospital and its medical staff. Continuing consolidation in the hospital
industry may result in fewer hospitals or fewer laboratories as hospitals move
to combine their operations. Our contracts and relationships with hospitals may
be terminated or, in the case of contracts, may not be renewed as their current
terms expire.
If we are unable to make acquisitions in the future, our rate of growth will
slow.
Much of our historical growth has come from acquisitions, and we expect
to continue to pursue growth through the acquisition and development of
laboratories and physician practices. However, we may be unable to continue to
identify and complete suitable acquisitions at prices we are willing to pay or
to obtain the necessary financing on acceptable terms. In addition, as we become
a bigger company, the amount that acquired businesses contribute to our revenue
and profits will likely be smaller on a percentage basis. We compete with other
companies to identify and complete suitable acquisitions. We expect this
competition to intensify, making it more difficult to acquire suitable companies
on favorable terms. Further, the businesses we acquire may not perform well
enough to justify our investment. If we are unable to make additional
acquisitions on suitable terms, we may not meet our growth expectations.
We intend to raise additional capital, which may be difficult to obtain at
attractive prices and which may cause us to engage in financing transactions
that adversely affect our stock price.
We need capital for both internal growth and the acquisition and
integration of new practices, products and services. Therefore, we intend to
raise additional capital through public or private offerings of equity
securities and/or debt financings. Our issuance of additional equity securities
could cause dilution to holders of our common stock and may adversely affect the
market price of our common stock. The incurrence of additional debt could
increase our interest expense and other debt service obligations and could
result in the imposition of covenants that restrict our operational and
financial flexibility. Additional capital may not be available to us on
commercially reasonable terms or at all. The failure to raise additional needed
capital could impede the implementation of our operating and growth strategies.
The success of our growth strategy depends on our ability to adapt to new
markets and to effectively integrate newly acquired practices.
Our expansion into new markets will require us to maintain and
establish payor and customer relationships and to convert the patient tracking
and financial reporting systems of new practices to our systems. Significant
delays or expenses with regard to this process could adversely affect the
integration of additional practices and our profitability. The integration of
additional practices also requires the
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implementation and centralization of purchasing, accounting, human resources,
management information systems, cash management and other systems, which may be
difficult, costly and time-consuming. Accordingly, our operating results in
fiscal quarters immediately following a new practice affiliation may be
adversely affected while we attempt to complete the integration process. We may
encounter significant unanticipated costs or other problems associated with the
future integration of practices into our combined network of affiliated
practices. Our expansion into new markets may require us to comply with present
or future laws and regulations that may differ from those to which we are
currently subject. Failure to meet these requirements could impede our growth
objectives or adversely affect our profitability.
We may inherit significant liabilities from practices that we acquire.
We perform due diligence investigations with respect to potential
liabilities of acquired and affiliated practices and obtain indemnification with
respect to liabilities from the sellers of such practices. Nevertheless,
undiscovered claims may arise and liabilities for which we become responsible
may be material and may exceed either the limitations of any applicable
indemnification provisions or the financial resources of the indemnifying
parties. While we believe, based on our due diligence investigations, that the
operations of our practices prior to their acquisition were generally in
compliance with applicable health care laws, it is nevertheless possible that
such practices were not in full compliance with such laws and that we will
become accountable for their non-compliance. A violation of such laws by a
practice could result in civil and criminal penalties, exclusion of the
physician, the practice or us from participation in Medicare and Medicaid
programs and loss of a physician's license to practice medicine.
We have significant contingent liabilities payable to many of the sellers of
practices that we have acquired.
In connection with our practice acquisitions, we typically agree to pay
the sellers additional consideration in the form of contingent debt obligations,
payment of which depends upon the practice achieving specified profitability
criteria over periods ranging from three to five years after the acquisition.
The amount of these contingent payments cannot be determined until the
contingency periods terminate and achievement of the profitability criteria is
determined. As of December 31, 2000, if the maximum criteria for the contingency
payments with respect to all prior acquisitions were achieved, we would be
obligated to make payments, including principal and interest, of approximately
$198.4 million over the next three to five years. Lesser amounts would be paid
if the maximum criteria are not met. Although we believe we will be able to make
such payments from internally generated funds or proceeds of future borrowings,
it is possible that such payments could cause significant liquidity problems for
us. Payments of these contingent amounts will adversely affect our earnings per
share and may cause volatility in the market price of our common stock. We
expect to continue to use contingent notes as partial consideration for
acquisitions and affiliations.
We have recorded a significant amount of intangible assets, which may never be
realized.
Our acquisitions have resulted in significant increases in net
identifiable intangible assets and goodwill. Net identifiable intangible assets,
which include hospital contracts, physician client lists, management service
agreements and laboratory contracts acquired in acquisitions were approximately
$263.2 million at June 30, 2001, representing approximately 44.8% of our total
assets. Net identifiable intangible assets are recorded at fair value on the
date of acquisition and are being amortized over periods ranging from 10 to 40
years. Goodwill, which relates to the excess of cost over the fair value of net
assets of businesses acquired, was approximately $196.7 million at June 30,
2001, representing approximately 34.6% of our total assets. We amortize goodwill
on a straight-line basis over periods ranging from 15 to 35 years. On an ongoing
basis, we make an evaluation to determine whether events and circumstances
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indicate that all or a portion of the carrying value of intangible assets may no
longer be recoverable, in which case an additional charge to earnings may be
necessary. We may not ever realize the full value of our intangible assets. Any
future determination requiring the write-off of a significant portion of
unamortized intangible assets could adversely affect our results of operations
for the period in which the write-off occurs, which could adversely affect our
stock price.
Our business is highly dependent on the recruitment and retention of qualified
pathologists.
Our business is dependent upon recruiting and retaining pathologists,
particularly those with subspecialties, such as dermatopathology. While our
practices have been able to recruit (principally through practice acquisitions)
and retain pathologists, we may be unable to continue to do so in the future as
competition for the services of pathologists increases. In addition, we may have
to modify the economic terms of our relationships with pathologists in order
enhance our recruitment and retention efforts, which could adversely affect our
profitability. The relationship between the pathologists and their respective
local medical communities is important to the operation and continued
profitability of each practice. Loss of one of our pathologists could lead to
the loss of hospital contracts or other sources of revenue that depend on our
continuing relationship with that pathologist. Our revenues and earnings could
be adversely affected if a significant number of pathologists terminate their
relationships with our practices or become unable or unwilling to continue their
employment, or if a number of our non-competition agreements with physicians
were terminated or determined to be invalid or unenforceable. The two
pathologists in our Birmingham, Alabama practice recently terminated their
employment with us and opened their own pathology lab. As a result, we no longer
have an operating lab in Alabama. We have implemented a strategy to retain our
Alabama customers and service them through other AmeriPath facilities. If we are
unable to retain these customers we could incur a non-cash asset impairment
charge which would not exceed, in the aggregate, $3.9 million. If an impairment
charge is necessary, depending upon the magnitude of the charge, we may have to
seek a waiver from our lenders to avoid violating a covenant under our credit
facility.
Proposals to reform the health care industry may restrict our existing
operations, impose additional requirements on us, limit our expansion or
increase our costs of regulatory compliance.
Federal and state governments have recently focused significant
attention on health care reform. It is not possible to predict which, if any,
proposal will be adopted. It is possible that the health care regulatory
environment will change so as to restrict our existing operations, impose
additional requirements on us or limit our expansion. Costs of compliance with
changes in government regulations may not be subject to recovery through price
increases.
Competition from other providers of pathology services may adversely affect our
business.
Our services include the provision of physician practice management
services to pathology practices and the provision of pathology and cytology
diagnostic services. Companies in other health care segments, such as hospitals,
national clinical laboratories, third party payors and health maintenance
organizations may compete with us in the employment of pathologists and the
management of pathology practices. We also expect to experience increasing
competition in the provision of pathology and cytology diagnostic services from
other anatomic pathology practices, companies in other health care industry
segments (such as other hospital-based specialties), national clinical
laboratories, large physician group practices or other pathology physician
practice management companies. Some of our competitors may have greater
financial and other resources than us, which could further intensify
competition. Increasing competition may erode our customer base and reduce our
sources of revenue and may increase our marketing and other costs of doing
business. Increasing competition may also impede our growth objectives by making
it more difficult or more expensive for us to acquire or affiliate with
additional pathology practices.
We may be subject to significant professional liability claims and we cannot
assure you that our insurance coverage limits will be sufficient to cover such
claims.
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Our business entails an inherent risk of claims of physician
professional liability for acts or omissions of our physicians and laboratory
personnel. We and our physicians periodically become involved as defendants in
medical malpractice lawsuits, some of which are currently ongoing, and are
subject to the attendant risk of substantial damage awards. While we believe
that we have an adequate risk management program, including professional
liability insurance coverage, it is possible that future claims will exceed the
limits of our risk management program, including the limits of our insurance
coverage. It is also possible that the costs of our insurance coverage will rise
causing us to either incur additional costs or further limit the amount of
coverage we have. In addition, our insurance does not cover all potential
liabilities arising from governmental fines and penalties, indemnification
agreements and certain other uninsurable losses.
The continued growth of managed care may have a material adverse effect on our
business.
The number of individuals covered under managed care contracts or other
similar arrangements has grown over the past several years and may continue to
grow in the future. Entities providing managed care coverage have been
successful in reducing payments for medical services in numerous ways, including
entering into arrangements under which payments to a service provider are
capitated, limiting testing to specified procedures, denying payment for
services performed without prior authorization and refusing to increase fees for
specified services. These trends reduce revenues, increase the cost of doing
business and limit the ability to pass cost increases on to customers.
Therefore, the continued growth of the managed care industry could adversely
affect our business.
Our business strategy emphasizes growth, which places significant demands on our
financial, operational and management resources and creates the risk of failing
to meet the growth expectations of investors.
Our growth strategy includes efforts to acquire and develop new
practices, develop and expand managed care and national clinical lab contracts
and develop new products, services, technologies and related alliances with
third parties. The pursuit of this growth strategy consumes capital resources,
thereby creating the financial risk that we will not realize an adequate return
on this investment. In addition, our growth may involve the acquisition of
companies, the development of products or services or the creation of strategic
alliances in areas in which we do not currently operate. This would require our
management to develop expertise in new areas, manage new business relationships
and attract new types of customers. The success of our growth strategy also
depends on our ability to expand our physician and employee base and to train,
motivate and manage employees. The success or failure of our growth strategy is
difficult to predict. The failure to achieve our stated growth objectives or the
growth expectations of investors could disappoint investors and harm our stock
price. We may not be able to implement our growth strategy successfully or to
manage our expanded operations effectively and profitably.
We are pursuing a strategy of becoming a fully integrated healthcare diagnostic
information provider, which adds uncertainty to our future results of operations
and could divert financial and management resources away from our core business.
As we pursue our transition into becoming a fully integrated healthcare
diagnostic information provider, we anticipate that significant amounts of
future revenue may be derived from products, services and alliances that do not
exist today or have not been marketed in sufficient quantities to measure
accurately market acceptance. Similarly, post-transition operating costs are
difficult to predict with accuracy, thereby adding further uncertainty to our
future results of operations. We may experience difficulties that could delay or
prevent the successful development and introduction of new healthcare diagnostic
information products and services and such products and services may not achieve
market
10
acceptance. Any failure by us to complete this transition in a timely and
cost-efficient manner could result in financial losses and could inhibit our
anticipated growth. In addition, the pursuit of this transition could divert
financial and management resources away from our core business.
We depend on certain key executives, the loss of whom could disrupt our
operations, cause us to incur additional expenses and impede our ability to
expand our operations.
Our success is dependent upon the efforts and abilities of our key
management personnel, particularly James C. New, our Chairman and Chief
Executive Officer, Brian C. Carr, our President, Gregory A. Marsh, our Vice
President and Chief Financial Officer, Alan Levin, M.D., our Chief Operating
Officer and Dennis M. Smith, Jr., M.D., our Senior Vice President and Medical
Director. The services of these individuals would be very difficult to replace.
Therefore, it would be costly and time consuming to find suitable replacements
for these individuals. The need to find replacements combined with the temporary
loss of these key services could also disrupt our operations and impede our
growth by diverting management attention away from our core business and growth
strategies.
Because of the complex nature of our billing and reimbursement arrangements, we
may be at a greater risk of Internal Revenue Service Examinations.
The Internal Revenue Service, or IRS, conducted an examination of our
federal income tax returns for the tax years ended December 31, 1996 and 1997
and concluded that no changes to the tax reported needed to be made. Although we
believe that we are in compliance with all applicable IRS rules and regulations,
if the IRS should determine that we are not in compliance in any other years, we
could be required to pay additional taxes, including penalties and interest. In
addition, IRS examinations are costly in that they can consume a great deal of
management time and attention that would otherwise be spent pursuing operational
improvements and growth strategies.
Our stock price is volatile and the value of your investment may decrease for
various reasons, including reasons that are unrelated to the performance of our
business.
There has been significant volatility in the market price of securities
of health care companies that often has been unrelated to the operating
performance of such companies. In fact, our common stock, which trades on the
Nasdaq National Market, has traded from a low of $8 per share to a high of $26
15/16 per share for the year ended December 31, 2000. We believe that various
factors, such as legislative and regulatory developments, quarterly variations
in our actual or anticipated results of operations, lower revenues or earnings
than those anticipated by securities analysts, the overall economy and the
financial markets could cause the price of our common stock to fluctuate
substantially.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Statements contained anywhere in this prospectus that are not limited to
historical information are considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding our
expectations, beliefs, intentions, plans or strategies regarding the future.
These forward-looking statements are based largely on our expectations and are
subject to a number of known and unknown risks and uncertainties discussed in
this prospectus and in other documents we file with the Securities and Exchange
Commission that may cause actual results to be materially different from those
anticipated, expressed or implied by the forward-looking statements. All
forward-looking statements included in this prospectus are based on information
available to us on the date hereof, and, except as required by law, we assume no
obligation to update any such forward-looking
11
statements to reflect future events or circumstances. Forward-looking statements
are sometimes indicated by words such as "may," "should," "believe," "expect,"
"anticipate" and similar expressions.
USE OF PROCEEDS
The shares of our common stock offered under this prospectus are for
the account of the selling stockholders. We will not receive any proceeds from
the sale of common stock by the selling stockholders. However, 5,085 of the
shares covered by this prospectus are subject to issuance by us pursuant to the
exercise of warrants held by some of the selling stockholders, 3,746 of which
have an exercise price of $0.12 per share and 1,339 of which have an exercise
price of $3.73 per share. We may receive cash proceeds from the exercise of
these warrants if the warrant holders elect not to make "cashless" exercises as
permitted under the terms of the warrants. Any cash proceeds that we receive
from the exercise of these warrants would be used for general corporate
purposes.
12
SELLING STOCKHOLDERS
The following table provides:
o The name of each of the selling stockholders;
o The number of shares of common stock beneficially owned by
each selling stockholder before this offering;
o The number of shares of common stock being offered by each
selling stockholder under this prospectus; and
o The number of shares of common stock beneficially owned by
each selling stockholder after completion of the offering.
The table assumes that the selling stockholders will sell all shares
they are offering under this prospectus, that the selling stockholders will not
acquire additional shares of our common stock prior to completion of this
offering, and that the selling stockholders will not dispose of any shares of
our common stock not covered by this prospectus. Each selling stockholder
beneficially owns less than 1% of the total number of shares of common stock
outstanding based on 25,274,105 shares of common stock outstanding as of August
2, 2001.
-----------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Before Shares Owned After
Name Offering Offered Offering
---- -------- ------- --------
-----------------------------------------------------------------------------------------------------------------
Haywood D. Cochrane, Jr. 8,113 2,704 5,409
-----------------------------------------------------------------------------------------------------------------
Brian C. Carr(1) 40,486 13,495 26,991
-----------------------------------------------------------------------------------------------------------------
James E. Billington 8,676 2,892 5,784
-----------------------------------------------------------------------------------------------------------------
William H. Brownie 4,498 1,499 2,999
-----------------------------------------------------------------------------------------------------------------
Norman O. Hill 1,446 482 964
-----------------------------------------------------------------------------------------------------------------
Douglas A. Olson 2,678 893 1,785
-----------------------------------------------------------------------------------------------------------------
Richland Ventures, L.P. 29,607 9,869 19,738
-----------------------------------------------------------------------------------------------------------------
Richland Ventures II, L.P. 11,805 3,935 7,870
-----------------------------------------------------------------------------------------------------------------
DFW Capital Partners, L.P. 27,692 9,231 18,461
-----------------------------------------------------------------------------------------------------------------
Calver Fund, Inc. 17,282 5,761 11,521
-----------------------------------------------------------------------------------------------------------------
Noro - Moseley Partners III, L.P. 17,193 6,731 11,462
-----------------------------------------------------------------------------------------------------------------
J.G. Partnership, LTD. 15,189 5,063 10,126
-----------------------------------------------------------------------------------------------------------------
HLM Partners VII, L.P. 13,905 4,635 9,270
-----------------------------------------------------------------------------------------------------------------
HLM Partners V, L.P. 12,516 4,172 8,344
-----------------------------------------------------------------------------------------------------------------
Chrysalis Ventures I, Ltd. 11,522 3,841 7,681
-----------------------------------------------------------------------------------------------------------------
SSM Venture Partners, L.P. 11,462 3,821 7,641
-----------------------------------------------------------------------------------------------------------------
J. David Grissom 11,143 3,714 7,429
-----------------------------------------------------------------------------------------------------------------
Thomas McColl Chesney, M.D. 12,378 4,126 8,252
-----------------------------------------------------------------------------------------------------------------
Allen D. Berry III, M.D. (2) 12,940 4,313 8,627
-----------------------------------------------------------------------------------------------------------------
Carolyn McIntyre Chesney, M.D. 12,378 4,126 8,252
-----------------------------------------------------------------------------------------------------------------
William A. Wesche, M.D. 3,615 1,205 2,410
-----------------------------------------------------------------------------------------------------------------
A. Weldon Schott, D.O. 1,232 411 821
-----------------------------------------------------------------------------------------------------------------
13
-----------------------------------------------------------------------------------------------------------------
Cheng C. Tsai, M.D. 1,003 334 669
-----------------------------------------------------------------------------------------------------------------
Daniel J. Santa Cruz, M.D. 2,276 759 1,517
-----------------------------------------------------------------------------------------------------------------
Eugene C. Wienke, M.D. 1,232 411 821
-----------------------------------------------------------------------------------------------------------------
Kathryn DeSchryver, M.D. 546 182 364
-----------------------------------------------------------------------------------------------------------------
Mark A. Hurt, M.D. 636 212 424
-----------------------------------------------------------------------------------------------------------------
Oscar Lazcano, M.D. 546 182 364
-----------------------------------------------------------------------------------------------------------------
Robert W. Brangle, M.D. 1,232 411 821
-----------------------------------------------------------------------------------------------------------------
Paul D. Cook, D.O. 318 106 212
-----------------------------------------------------------------------------------------------------------------
Charles B. Bramlett Jr., M.D. 803 268 535
-----------------------------------------------------------------------------------------------------------------
Jack Teryle Pearson, M.D. 803 268 535
-----------------------------------------------------------------------------------------------------------------
Joseph C. Moore, M.D. 2,142 714 1,428
-----------------------------------------------------------------------------------------------------------------
H.W. Ferrell, M.D. 2,401 800 1,601
-----------------------------------------------------------------------------------------------------------------
John R. Olson, M.D. 2,401 800 1,601
-----------------------------------------------------------------------------------------------------------------
Carlene Ann Hawksley, 100% Trustee of the
Hawksley Trust 1997 Created by Declaration of
Trust, February 12, 1997 4,670 1,557 3,113
-----------------------------------------------------------------------------------------------------------------
Kelly R. O'Keefe and Patricia O'Keefe,
Trustee of the O'Keefe Family Trust dated
December 20, 1995 3,866 1,289 2,577
-----------------------------------------------------------------------------------------------------------------
Robert M. Rinehart and Julie M. Rinehart as
Trustee of the Rinehart Living Trust Dated
November 2, 1989 4,670 1,557 3,113
-----------------------------------------------------------------------------------------------------------------
Simon S. Chan and Julia S. Chan 1993
Intervivos Trust 4,670 1,557 3,113
-----------------------------------------------------------------------------------------------------------------
Winterling Martin 1997 Revocable Trust
4,670 1,557 3,113
-----------------------------------------------------------------------------------------------------------------
Kenneth W. Westphal, M.D. 803 268 535
-----------------------------------------------------------------------------------------------------------------
William R. Beach, III 377 126 251
-----------------------------------------------------------------------------------------------------------------
William H. West, M.D. 1,915 638 1,277
-----------------------------------------------------------------------------------------------------------------
William H. Lomicka 1,391 464 927
-----------------------------------------------------------------------------------------------------------------
Wachovia Bank of Georgia, N.A. - Custodian
for Alan I. Jacobson IRA 377 126 251
-----------------------------------------------------------------------------------------------------------------
UMB Bank, N.A., Trustee Melissa S. Elliot 98 33 65
-----------------------------------------------------------------------------------------------------------------
UMB Bank, N.A., Trustee Max L. Elliot, M.D. 75 25 50
-----------------------------------------------------------------------------------------------------------------
Thomas W. Beasley 377 126 251
-----------------------------------------------------------------------------------------------------------------
Thomas L. West, M.D. Profit Sharing Trust 1,842 614 1,228
-----------------------------------------------------------------------------------------------------------------
Steven F. Drake 20,083 6,694 13,389
-----------------------------------------------------------------------------------------------------------------
Steffanie N. Drake Heritage Trust 161 54 107
-----------------------------------------------------------------------------------------------------------------
Samuel W. Bartholomew 461 154 307
-----------------------------------------------------------------------------------------------------------------
Rose Marie Anderson Trust 4,500 1,500 3,000
-----------------------------------------------------------------------------------------------------------------
Robert R. West 37,861 12,620 25,241
-----------------------------------------------------------------------------------------------------------------
Robert LaFollette West 444 148 296
-----------------------------------------------------------------------------------------------------------------
Robert E. Brierty & Joan C. Brierty 151 50 101
-----------------------------------------------------------------------------------------------------------------
Robert Armistead First IRA Rollover 3,954 1,318 2,636
-----------------------------------------------------------------------------------------------------------------
Robert A. Frist 965 322 643
-----------------------------------------------------------------------------------------------------------------
14
-----------------------------------------------------------------------------------------------------------------
Nickel Medical Laboratory, Inc. 342 114 228
-----------------------------------------------------------------------------------------------------------------
Michael W. Blackburn 38 13 25
-----------------------------------------------------------------------------------------------------------------
Melissa D. Springer 117 39 78
-----------------------------------------------------------------------------------------------------------------
McKenzie Investment Company 2,167 722 1,445
-----------------------------------------------------------------------------------------------------------------
Mark T. Springer 117 39 78
-----------------------------------------------------------------------------------------------------------------
Marianna L. Dennison 1,712 571 1,141
-----------------------------------------------------------------------------------------------------------------
Kristine Margaret West 444 148 296
-----------------------------------------------------------------------------------------------------------------
Trico & Co. 1,285 428 857
-----------------------------------------------------------------------------------------------------------------
Jackson W. and Elizabeth W. Moore 4,788 1,596 3,192
-----------------------------------------------------------------------------------------------------------------
Jack Roy Anderson Trust Fund 4,500 1,500 3,000
-----------------------------------------------------------------------------------------------------------------
Jack R. Anderson 4,356 1,452 2,904
-----------------------------------------------------------------------------------------------------------------
Gerald M. Bordin & Sheila W. Bordin 188 63 125
-----------------------------------------------------------------------------------------------------------------
Frederick C. Glavin & Martha G. Glavin 377 126 251
-----------------------------------------------------------------------------------------------------------------
Ernest S. Tucker, III 151 50 101
-----------------------------------------------------------------------------------------------------------------
Douglas Crawford Huber 226 75 151
-----------------------------------------------------------------------------------------------------------------
Delaware Charter Guarantee & Trust - FBO
Robert Nakamura IRA 151 50 101
-----------------------------------------------------------------------------------------------------------------
Dawn Dixie Drake Heritage Trust 161 54 107
-----------------------------------------------------------------------------------------------------------------
Cora S. Humberson & Michael Whittaker 90 30 60
-----------------------------------------------------------------------------------------------------------------
Brian Datnow, M.D. 377 126 251
-----------------------------------------------------------------------------------------------------------------
Bobbye Williams 151 50 101
-----------------------------------------------------------------------------------------------------------------
Arthur S. Demoss Foundation 7,141 2,380 4,761
-----------------------------------------------------------------------------------------------------------------
Andres Aquino 151 50 101
-----------------------------------------------------------------------------------------------------------------
James R. Miller Lifetime Trust 471 157 314
-----------------------------------------------------------------------------------------------------------------
Vincent H. Stack Living Trust 188 63 125
-----------------------------------------------------------------------------------------------------------------
Stephen M. Russell, M.D. 161 54 107
-----------------------------------------------------------------------------------------------------------------
Rodgers Business Interests 461 154 307
-----------------------------------------------------------------------------------------------------------------
James M. Shapiro and Sarah B. Shapiro Trustee
FBO James M. Shapiro and Sarah B. Shapiro
Trust 1,004 335 669
-----------------------------------------------------------------------------------------------------------------
Union Street Partners, L.P. 40,165 13,388 26,776
-----------------------------------------------------------------------------------------------------------------
Questor Partners Fund, L.P. 701,166 233,722 467,444
-----------------------------------------------------------------------------------------------------------------
Questor Side-by-Side Partners, L.P. 50,328 16,776 33,552
-----------------------------------------------------------------------------------------------------------------
Robert J. Friedman, M.D. 113,625 37,875 75,750
-----------------------------------------------------------------------------------------------------------------
Edward Heilman, M.D. 113,625 37,875 75,750
-----------------------------------------------------------------------------------------------------------------
Richard Jacoby, M.D. 70,644 20,252 50,392
-----------------------------------------------------------------------------------------------------------------
Mario DiLeonardo, M.D. 70,644 20,252 50,392
-----------------------------------------------------------------------------------------------------------------
Waine C. Johnson, M.D. 29,664 9,888 19,776
-----------------------------------------------------------------------------------------------------------------
Thomas D. Griffin, M.D. 29,664 9,888 19,776
-----------------------------------------------------------------------------------------------------------------
Gary R. Kantor, M.D. 29,664 9,888 19,776
-----------------------------------------------------------------------------------------------------------------
Richard L. Spielvogel, M.D. 29,664 9,888 19,776
-----------------------------------------------------------------------------------------------------------------
Finova Mezzanine Capital Inc. 21,034 7,011 14,023
-----------------------------------------------------------------------------------------------------------------
Ben F. Martin, M.D. 20,113 6,704 13,409
-----------------------------------------------------------------------------------------------------------------
John H. Parker, M.D. 20,113 6,704 13,409
-----------------------------------------------------------------------------------------------------------------
Roxanne Perryman, M.D. 1,607 536 1,071
-----------------------------------------------------------------------------------------------------------------
George F. Bale, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
15
-----------------------------------------------------------------------------------------------------------------
Robert M. Bradley, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Michael F. Bugg, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Thomas R. Callihan, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Kenneth D. Groshart, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Johnnie Cameron Hall, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Shamim M. Moinuddin, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Gene D. Spencer, Jr., M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Bruce L. Webber, M.D. 12,137 4,046 8,091
-----------------------------------------------------------------------------------------------------------------
Richard C. Olshock, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
James A. Hopfenbeck, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
Cathy Van Blerkom, M.D. 3,088 1,029 2,059
-----------------------------------------------------------------------------------------------------------------
John E. Boline, M.D. 6,176 2,059 4,117
-----------------------------------------------------------------------------------------------------------------
Mary E. Corkhill, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
William F. Cox, Jr., M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
Donald K. McClure, M.D. 8,235 2,745 5,490
-----------------------------------------------------------------------------------------------------------------
Timothy W. Morgan, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
Steven J. Temple, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
Carlton L. Wallis, Jr., M.D. 6,176 2,059 4,117
-----------------------------------------------------------------------------------------------------------------
Michael J. Pushchak, M.D. 12,353 4,118 8,235
-----------------------------------------------------------------------------------------------------------------
Craig MacNab(3) 1,606 535 1,071
-----------------------------------------------------------------------------------------------------------------
Robert A. Reeves(3) 803 268 535
-----------------------------------------------------------------------------------------------------------------
H. Richard Pascoe, M.D.(3) 321 107 214
-----------------------------------------------------------------------------------------------------------------
Russell T. Ray(3) 803 268 535
-----------------------------------------------------------------------------------------------------------------
Gerardo Rosencranz(3) 481 160 321
-----------------------------------------------------------------------------------------------------------------
Stuart F. Smith(3) 321 107 214
-----------------------------------------------------------------------------------------------------------------
R. Riley Sweat(3) 321 107 214
-----------------------------------------------------------------------------------------------------------------
David Wilson(3) 481 160 321
-----------------------------------------------------------------------------------------------------------------
Guarantee and Trust F/B/O. Edward S. Brokaw(3) 1,606 535 1,071
-----------------------------------------------------------------------------------------------------------------
SunTrust Equitable Securities Corporation(3) 8,032 2,678 5,354
-----------------------------------------------------------------------------------------------------------------
Mark R. Klausner(3) 160 53 107
-----------------------------------------------------------------------------------------------------------------
______________________
(1) Shareholdings include 321 shares issuable pursuant to the exercise of
warrants, 107 of which are being offered pursuant to this prospectus.
(2) Shareholdings include 803 shares owned jointly with Dr. Berry's spouse,
Dianne J. Berry.
(3) Shareholdings represent shares issuable pursuant to the exercise of
warrants.
Certain Relationships among the Selling Stockholders and AmeriPath
We acquired Inform DX on November 30, 2000 in a stock-for-stock merger
transaction. Each of the selling stockholders was a stockholder or warrant
holder of Inform DX at the time of the merger. The shares covered by this
prospectus were issued pursuant to the merger or are issuable pursuant to
warrants assumed by us in connection with the merger.
In connection with the Inform DX merger, AmeriPath agreed to take
certain actions necessary to register the resale of the shares covered by this
prospectus, including the preparation and filing of the registration statement
of which this prospectus forms a part and the payment of expenses associated
with the registration statement and this prospectus.
16
Some of the selling stockholders were employees, officers or directors
of Inform DX prior to the merger.
Some of the selling stockholders currently are employees of AmeriPath
or of medical practices managed by AmeriPath. Some of the Selling Stockholders
are officers, directors or owners of medical practices managed by AmeriPath.
Brian C. Carr is the President of AmeriPath and James E. Billington is
the Senior Vice President, Operations of AmeriPath.
Brian C. Carr is also a director of AmeriPath.
Haywood D. Cochrane, Jr. is a director of AmeriPath.
PLAN OF DISTRIBUTION
Our common stock is quoted on the Nasdaq National Market under the
symbol "PATH". This prospectus is intended to be used to comply with the
prospectus delivery requirements of the Securities Act of 1933 in connection
with any offers or resales. Any or all of the shares of our common stock offered
under this prospectus may be sold from time to time by the selling stockholders,
or by pledgees, donees, transferees, or other successors in interest. These
sales may be made:
o to or through underwriters, agents, brokers or dealers;
o directly to one or more purchasers;
o through agents on a best efforts basis; or
o through a combination of any such methods of sale.
In addition, such sales may be made in the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price or in negotiated transactions. Any or all of the
shares of common stock may be sold by one or more of the following:
o a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the
exchange or any automated interdealer quotation system on which
the common stock is then listed;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and o writing options on the shares.
Any underwriters, agents or broker-dealers involved in the distribution
of the shares may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the shares
for which such underwriters, agents or broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to an underwriter,
agent or particular broker-dealer will be negotiated prior to the sale and may
be in excess of customary compensation). If required by applicable law at the
time a particular offer of shares is made, the terms and conditions of that
transaction will be set forth in a supplement to this prospectus.
The selling stockholders and any underwriters, agents or broker-dealers
who act in connection with the sale of the shares under this prospectus may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any compensation received by them might be deemed to be
underwriting discounts and commissions under the Securities Act.
17
The selling stockholders will pay all applicable stock transfer taxes,
transfer fees and brokerage commissions or underwriting or other discounts. We
will bear all expenses in connection with the registration of the shares being
offered by the selling stockholders. We have agreed to indemnify the selling
stockholders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Alston & Bird LLP, Atlanta, Georgia, will pass upon the status of the
shares offered under this prospectus as legally and validly issued, fully paid
and nonassessable.
EXPERTS
The financial statements of AmeriPath, Inc. and its consolidated
subsidiaries, as of December 31, 2000 and 1999 and for each of the three years
in the period ended December 31, 2000, except Pathology Consultants of America,
Inc. (d/b/a "InformDX") as of December 31, 1999 and for the years ended December
31, 1999 and 1998, incorporated by reference in this prospectus have been
audited by Deloitte & Touche LLP as stated in their reports incorporated by
reference herein. The financial statements of InformDX, consolidated with those
of AmeriPath, Inc. and not presented separately herein, have been audited by
Ernst & Young LLP as stated in their reports incorporated by reference herein.
Such financial statements of the Company and its consolidated subsidiaries are
incorporated by reference herein in reliance upon the respective reports of such
firms given upon their authority as experts in accounting and auditing. All of
the foregoing firms are independent auditors.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. These reports,
proxy statements and other information may be obtained:
o At the public reference room of the Commission, Room 1024 --
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549;
o At the public reference facilities at the Commission's
regional offices located at Seven World Trade Center, 13th
Floor, New York, New York 10048 or Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661;
o From the Commission, Public Reference Room, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549;
o At the offices of The Nasdaq Stock Market, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006; or
o From the internet site maintained by the Commission at
http://www.sec.gov, which contains reports, proxy and
------------------
information statements and other information regarding issuers
that file electronically with the Commission.
Some locations may charge prescribed rates or modest fees for copies.
For more information on the public reference room, call the Commission at
1-800-SEC-0330.
We filed with the Securities and Exchange Commission a registration
statement on Form S-3 (which contains this prospectus) under the Securities Act
of 1933, as amended, to register with the Securities and Exchange Commission the
resale by the selling stockholders of our common stock. This prospectus does not
contain all the information you can find in the registration statement or the
exhibits
18
and schedules to the registration statement. For further information with
respect to us, and our common stock, please refer to the registration statement,
including the exhibits and schedules. You may inspect and copy the registration
statement, including the exhibits and schedules, as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information that we file with them in other documents, which
means that we can disclose important information to you by referring to those
documents. The information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the Securities and
Exchange Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and all future documents
filed with the Securities and Exchange Commission under Sections 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934 until the termination of the
offering to which this prospectus relates:
o Current Report on Form 8-K, filed March 6, 2001;
o Current Report on Form 8-K, filed April 6, 2001;
o Current Report on Form 8-K, filed August 8, 2001;
o Annual Report on Form 10-K for the year ended December 31,
2000, filed April 2, 2001, including those portions of our
proxy statement for our 2001 annual meeting of stockholders
that are incorporated into the Form 10-K by reference;
o Amendment No. 1 on Form 10-K/A to the Annual Report on Form
10-K for the year ended December 31, 2000, filed August 8,
2001;
o Quarterly Report on Form 10-Q for the quarter ended March 31,
2001, filed May 15, 2001;
o The description of common stock set forth in our registration
statement filed pursuant to Section 12 of the Exchange Act,
and any amendment or report filed for the purpose of updating
such description; and
o The description of rights to purchase Series A Junior
Participating Preferred Stock set forth in our registration
statement filed pursuant to Section 12 of the Exchange Act,
and any amendment or report filed for the purpose of updating
such description.
On written or oral request, we will provide at no cost to each person
who receives a copy of this prospectus, a copy of any or all of the documents
incorporated in this prospectus by reference. We will not provide exhibits to
any of the documents listed above, however, unless those exhibits are
specifically incorporated by reference into those documents. You should direct
your request to the Secretary of AmeriPath, 7289 Garden Road, Suite 200, Riviera
Beach, Florida 33404, telephone number (561) 845-1850.
You should rely only on the information that we incorporate by
reference or provide in this prospectus or any supplement. We have not
authorized anyone else to provide you with different information. Neither we nor
the selling stockholders will make an offer of these shares in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents.
19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration fee to Securities and Exchange Commission.................$4,987
Accounting fees and expenses................................................0
Legal fees and expenses................................................55,000
Miscellaneous expenses..................................................2,000
Total............................................................$61,987
=======
The foregoing items, except for the registration fee to the Securities and
Exchange Commission, are estimated. We have agreed to bear all expenses in
connection with the registration of the shares being offered by the selling
stockholders, except that the selling stockholders will bear all underwriting
discounts and commissions and transfer taxes, if any. We have agreed to
indemnify the selling stockholders against certain liabilities, including
liabilities under the Securities Act.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our amended and restated certificate of incorporation eliminates the
personal liability of our directors to AmeriPath and its stockholders for
monetary damages for breach of fiduciary duty as a director, except that it does
not eliminate the liability of a director:
o for any breach of the duty of loyalty to AmeriPath and its
stockholders;
o for acts or omissions not in good faith which involve
intentional misconduct or a knowing violation of law;
o under the Delaware General Corporation Law for a director's
willful or negligent violation of statutory provisions that
prevent the unlawful payment of a dividend; and
o for any transaction in which a director receives an improper
personal benefit.
In addition, if at any time the Delaware General Corporation Law is
amended to authorize further elimination or limitation of the personal liability
of a director, then the liability of each of our directors shall be eliminated
or limited to the fullest extent permitted by such provisions, as so amended,
without further action by the stockholders, unless otherwise required.
Our bylaws require us to indemnify any director or officer of AmeriPath
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than an action by or in
the right of AmeriPath) by reason of the fact that the indemnified person was or
is a director, officer, employee or agent of AmeriPath, or is or was serving at
the request of AmeriPath as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such indemnified person in connection with such action,
suit or proceeding, as long as the indemnified person:
o acted in good faith;
II-1
o acted in a manner reasonably believed to be in or not opposed
to the best interests of AmeriPath; and
o with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
Our bylaws also require us to indemnify any director or officer of
AmeriPath 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 AmeriPath
to procure a judgment in AmeriPath's favor by reason of the fact that the
indemnified person was or is a director, officer, employee or agent of
AmeriPath, or is or was serving at the request of AmeriPath as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, actually and reasonably incurred by
such indemnified person in connection with the defense or settlement of such
action or suit, as long as the indemnified person:
o acted in good faith; and
o acted in a manner reasonably believed to be in or not opposed
to the best interests of AmeriPath.
However, no indemnification shall be made by us under the preceding
paragraph in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to AmeriPath unless otherwise determined by
court order.
The determination of whether the applicable standard of conduct
described above has been meet shall be made with respect to a person who is a
director or officer at the time of such determination:
o by a majority vote of the directors who are not parties to
such action, suit or proceeding ("disinterested directors"),
even though less than a quorum; or
o by a committee of disinterested directors designated by a
majority vote of the disinterested directors, even though
less than a quorum; or
o if there are no disinterested directors, or if the
disinterested directors so direct, by independent legal
counsel in a written opinion; or
o by the stockholders.
AmeriPath also has written indemnification agreements with each of its
directors and executive officers that provide for substantially the same scope
of indemnification as is provided to directors and officers of AmeriPath under
AmeriPath's bylaws.
AmeriPath maintains a standard form of officers' and directors'
liability insurance policy that provides coverage to its officers and directors
for certain liabilities, including certain liabilities that may arise out of
this registration statement.
We have agreed to indemnify each selling stockholder, each underwriter,
if any, and each person controlling the selling stockholders or the
underwriters, if any, within the meaning of the Securities Act, from and against
any losses, claims, damages or liabilities, joint or several, to which such
selling stockholders, underwriters or controlling persons may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in this registration statement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violations by us of applicable federal or state securities laws relating to such
registration.
II-2
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
------------------
2.1 Agreement and Plan of Merger by and among the Registrant, AMP Merger
Corp. and Pathology Consultants of America, Inc. (d/b/a Inform DX),
dated as of November 7, 2000 (incorporated by reference from Exhibit
2.2 to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000)
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference from Exhibit 3.1 to our registration statement on Form S-1,
Registration No. 333-34265)
4.2 Amended and Restated Bylaws
4.3 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation (incorporated by reference from Exhibit 3.3 to our
registration statement on Form S-1, Registration No. 333-34265)
4.4 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation
4.4 Rights Agreement, dated as of April 8, 1999, between the Registrant and
American Stock Transfer & Trust Company, as Rights Agent, including the
form of Certificate of Designations of Series A Junior Participating
Preferred Stock, the form of Rights Certificate, and the form of
Summary of Rights (incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K filed April 16, 1999)
4.5 Registration Rights Agreement, dated November 30, 2000, among the
Registrant and the Shareholders and Warrant Holders of Pathology
Consultants of America, Inc. (d/b/a Inform DX) (incorporated by
reference from Exhibit 10.46 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2000)
5.1* Opinion of Alston & Bird LLP, including consent
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Alston & Bird LLP (filed as part of Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page to this
registration statement, as filed on April 20, 2001)
-----------
* Previously filed.
(b) Financial Statement Schedules
II-3
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(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 end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this Section do not apply if the registration statement is on Form S-3, Form S-8
or Form F-3 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 Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 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.
The undersigned registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, 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 of 1933 and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
II-4
(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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-5
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 for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Riviera Beach, State of Florida on the 8th day of
August, 2001.
AmeriPath, Inc.
By: /s/ James C. New
-------------------------------------
Name: James C. New
Title: Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ James C. New Chairman and Chief Executive August 8, 2001
--------------------------------------------------
James C. New Officer(Principal Executive
Officer)
/s/ Gregory A. Marsh Vice President, Chief Financial August 8, 2001
--------------------------------------------------
Gregory A. Marsh Officer and Secretary (Principal
Financial and Accounting Officer)
* Director August 8, 2001
--------------------------------------------------
Brian C. Carr
* Director August 8, 2001
--------------------------------------------------
E. Martin Gibson
* Director August 8, 2001
--------------------------------------------------
Alan Levin, M.D.
* Director August 8, 2001
--------------------------------------------------
C. Arnold Renschler, M.D.
* Director August 8, 2001
--------------------------------------------------
E. Roe Stamps, IV
*By: /s/ James C. New
--------------------------------
James C. New
Attorney-in-Fact
II-6
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
2.1 Agreement and Plan of Merger by and among the Registrant, AMP Merger
Corp. and Pathology Consultants of America, Inc. (d/b/a Inform DX),
dated as of November 7, 2000 (incorporated by reference from Exhibit
2.2 to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2000)
4.1 Amended and Restated Certificate of Incorporation (incorporated by
reference from Exhibit 3.1 to our registration statement on Form S-1,
Registration No. 333-34265)
4.2 Amended and Restated Bylaws
4.3 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation (incorporated by reference from Exhibit 3.3 to our
registration statement on Form S-1, Registration No. 333-34265)
4.4 Certificate of Amendment to the Amended and Restated Certificate of
Incorporation
4.4 Rights Agreement, dated as of April 8, 1999, between the Registrant
and American Stock Transfer & Trust Company, as Rights Agent,
including the form of Certificate of Designations of Series A Junior
Participating Preferred Stock, the form of Rights Certificate, and the
form of Summary of Rights (incorporated by reference to Exhibit 4.1 to
our Current Report on Form 8-K filed April 16, 1999)
4.5 Registration Rights Agreement, dated November 30, 2000, among the
Registrant and the Shareholders and Warrant Holders of Pathology
Consultants of America, Inc. (d/b/a Inform DX) (incorporated by
reference from Exhibit 10.46 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2000)
5.1* Opinion of Alston & Bird LLP, including consent
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Alston & Bird LLP (filed as part of Exhibit 5.1)
24.1 Power of Attorney (included as part of the signature page to this
registration statement, as filed on April 20, 2001)
-----------
* Previously filed.