As filed with the Securities and Exchange Commission on July 8, 2004
Registration No. 333-114734
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RAMP CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 84-1123311
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
33 Maiden Lane
New York, New York 10038
(212) 440-1500
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(Address, including zip code, and telephone number,
Including area code, of registrant's principal executive offices)
Mitchell Cohen
33 Maiden Lane
New York, New York 10038
(212) 440-1500
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(Name, address, including zip code, and telephone number,
Including area code, of agent for service)
Copy to:
Martin Eric Weisberg, Esq.
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
(212) 704-6000
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Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities 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. [ ]
CALCULATION OF REGISTRATION FEE
------------------------------------------------ ------------------- ------------------- ------------------ --------------
Proposed Maximum Proposed Maximum Amount of
Title of Each Class Amount to be Offering Price Aggregate Registration
of Securities to be Registered Registered(1) Per Share Offering Price Fee(7)
------------------------------------------------ ------------------- ------------------- ------------------ --------------
Common Stock, $.001 par value per share ....... 24,746,782(2)(3) $0.52(4) $12,868,326.64 $1,630.42
------------------------------------------------ ------------------- ------------------- ------------------ --------------
Common Stock, $.001 par value per share ....... 3,179,216(2)(5) $0.80(6) $ 2,543,372.80 $ 322.25
------------------------------------------------ ------------------- ------------------- ------------------ --------------
Common Stock, $.001 par value per share ....... 407,500(2)(5) $0.60(6) $ 244,500.00 $ 30.98
------------------------------------------------ ------------------- ------------------- ------------------ --------------
Common Stock, $.001 par value per share ....... 31,248(2)(5) $0.82(6) $ 25,623.36 $ 3.25
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Total Registration Fee........................................................................................ $1,986.90
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(1) Represents the shares of common stock being registered for resale by
the selling stockholders and the number of shares of common stock
issuable upon the exercise of warrants to purchase shares of our common
stock by the selling stockholders.
(2) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the
"Securities Act"), the shares of common stock offered hereby also
include such presently indeterminate number of shares of common stock
as shall be issued by us to the selling stockholders upon adjustment
under anti-dilution provisions covering the additional issuance of
shares by Ramp resulting from stock splits, stock dividends or similar
transactions.
(3) Includes 200% of the number of shares of our common stock issuable to
the investor and placement agent, or 22,553,042 shares of common stock.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (g) of the Securities Act; based on the
average ($0.52) of the closing bid ($0.52) and asked ($0.52) price on
the American Stock Exchange on April 20, 2004.
(5) Represents the number of shares of common stock issuable upon the
exercise of warrants to purchase shares of our common stock.
(6) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(g) of the Securities Act, based on the higher of
(a) the exercise price of the warrants or (b) the offering price of
securities of the same class included in this registration statement.
(7) Calculated pursuant to Section 6(b) of the Securities Act based upon
Proposed Maximum Aggregate Offering Price multiplied by .0001267.
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 Section 8(a), may
determine.
The information in this prospectus is not complete and may be changed.
No dealer, salesman or other person has been authorized to give any information
or to make any representation not contained in or incorporated by reference in
this prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized by us, the selling stockholders or
any other person. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such an offer in such
jurisdiction. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in our affairs since such date.
Subject to completion, dated July 8, 2004
PROSPECTUS
RAMP CORPORATION
28,364,746 Shares of Common Stock
This prospectus relates to the sale by the selling stockholders
identified in this prospectus of up to an aggregate of 28,364,746 shares of our
common stock, including:
o 24,746,782 shares of our common stock;
o 3,179,216 shares issuable upon the exercise of warrants with
an exercise price of $0.80 cents per share;
o 407,500 shares issuable upon the exercise of warrants with an
exercise price of $0.60 cents per share; and
o 31,248 shares issuable upon the exercise of warrants with an
exercise price of $0.82 cents per share.
The exercise price of the warrants are subject to adjustment under
certain circumstances. Please see the sections of this prospectus titled
"Description of the Transactions", "Plan of Distribution" and "Description of
Our Securities" for more information about the terms and conditions of our
common stock and warrants.
We will not receive any of the proceeds from the sale of these shares
by the selling stockholders. However, we will receive the proceeds from any
exercise of warrants to purchase shares to be sold hereunder. See "Use of
Proceeds".
We have agreed to pay the expenses in connection with the registration
of these shares.
Our common stock is traded on the American Stock Exchange under the
symbol "RCO". On July 7, 2004, the closing price of our common stock was
reported as $0.17 cents per share.
Investing in our securities involves a high degree of risk. See "Risk
Factors" beginning on page 4 of this prospectus for certain risks that should be
considered by prospective purchasers of the securities offered hereby.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is July __, 2004.
TABLE OF CONTENTS
Page
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PROSPECTUS SUMMARY............................................................3
RISK FACTORS..................................................................4
FORWARD-LOOKING STATEMENTS...................................................13
DESCRIPTION OF THE TRANSACTIONS..............................................13
SELLING STOCKHOLDERS.........................................................14
DESCRIPTION OF SECURITIES....................................................18
PLAN OF DISTRIBUTION.........................................................18
INDEMNIFICATION OF OFFICERS AND DIRECTORS....................................20
WHERE YOU CAN FIND MORE INFORMATION ABOUT US.................................21
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE............................21
LEGAL MATTERS................................................................22
EXPERTS .....................................................................22
2
PROSPECTUS SUMMARY
The following summary highlights aspects of the offering and the
information incorporated by reference in this prospectus. This prospectus does
not contain all of the information that you should consider before making an
investment decision. You should read this entire prospectus carefully, including
the "Risk Factors" section and the financial statements, related notes and the
other more detailed information appearing elsewhere or incorporated by reference
in this prospectus. Unless otherwise indicated, "we", "us", "our" and similar
terms, as well as references to the "Company" and "Ramp", refer to Ramp
Corporation and its subsidiaries HealthRamp, LifeRamp and its newly acquired
division, Frontline, and not to the selling security holders. All industry
statistics incorporated by reference in this prospectus were obtained from data
prepared or provided by recognized industry sources.
Ramp Corporation
Ramp Corporation (formerly known as Medix Resources, Inc.), through its
wholly-owned HealthRamp subsidiary, provides Internet based communication, data
integration, and transaction processing designed to provide access to safer and
better healthcare. Ramp's products enable communication of high value-added
healthcare information among physician offices, hospitals, health management
organizations, and health insurance companies. In 2002, we organized a
wholly-owned subsidiary, PS Purchase Corp., in Delaware, and in 2003 changed its
name to HealthRamp, Inc. ("HealthRamp") to continue this healthcare technology
business. In 2003, we acquired the businesses and assets of Frontline Physicians
Exchange and Frontline Communications ("Frontline") used in or necessary for the
conduct of its 24-hour telephone answering and messaging services to physicians
and other medically-related businesses and virtual office services to
non-medical businesses and professionals, and the business and assets of
ePhysician, Inc., whose technology has been integrated with those of our
previously developed Cymedix suite of technologies, resulting in the
CarePoint(TM) Suite (the "CarePoint Suite") that we are currently marketing to
physicians and other healthcare professionals. In 2003 we also formed a
wholly-owned subsidiary, LifeRamp Family Financial, Inc. ("LifeRamp"), in Utah
that has not yet commenced business operations. We are currently exploring the
feasibility of using LifeRamp to commence a new business, making non-recourse
loans to terminally ill cancer patients secured by their life insurance
policies.
We have limited revenues from current operations and are funding the
development and deployment of our products through the sales of our securities.
See "Risk Factors".
Because of our significant recurring losses, and the lack of certain
sources of capital to fund our operations, our independent accountants included
a "going concern" uncertainty in their audit reports on our audited financial
statements for the years ended December 31, 2003, 2002 and 2001. The "going
concern" uncertainty signifies that substantial doubt exists about our ability
to continue our business. For a complete description of risks regarding our
business and operations, we refer you to the section of this prospectus entitled
"Risk Factors".
Our principal executive office is located at 33 Maiden Lane, New York,
New York 10038, and our telephone number is (212) 440-1500.
The Offering
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Common stock offered by selling
stockholders 28,364,746
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Use of Proceeds We will not receive any proceeds from the
sale of shares in this offering. We may
receive up to $2,813,496.10 upon exercise of
the warrants.
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American Stock Exchange Symbol RCO
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3
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors and other information in
this prospectus before investing in our common stock. The trading price of our
common stock could decline due to any of these risks, and you may lose all or
part of your investment.
We have incurred and reported significant recurring net losses which
endanger our viability as a going-concern and caused our accountants to issue a
"going concern" qualification in their annual audit report. We have reported net
losses applicable to our common stockholders of ($31,321,000), ($9,014,000) and
($10,636,000) for the years ended December 31, 2003, 2002, and 2001,
respectively. At December 31, 2003, we had an accumulated deficit of
($72,368,000). These losses and negative operating cash flows have caused our
independent accountants to include a "going concern" uncertainty in their
reports in connection with their audits of our financial statements for the
years ended December 31, 2003, 2002 and 2001.
Our independent accountants have advised our management and our Audit
Committee that there were material weaknesses in our internal controls and
procedures during fiscal year 2003, some of which persisted throughout the
fiscal period ended March 31, 2004, and management believes have continued
through the fiscal period ended June 30, 2004. Management believes that if these
material weaknesses are not corrected, a potential misapplication of GAAP or
potential accounting error in our consolidated financial statements could occur.
Enhancing our internal controls to correct the material weaknesses has and will
result in increased costs to us.
Based upon management's review of our internal controls and procedures,
our management, including our current chief executive officer and current chief
financial officer, has determined that we had inadequate controls and procedures
constituting material weaknesses as of December 31, 2003 which persisted during
the first and second quarters of fiscal year 2004. These inadequate controls and
procedures included:
o Inadequate accounting staffing and records to identify and
record all accounting entries.
o Lack of management review of our bank reconciliations, timely
review of expense reports, and timely review of agreements
governing complex financing transactions, employee and
non-employee stock based compensation arrangements and other
transactions having accounting ramifications.
o Failure to perform an adequate internal review of financial
information in periodic reports to ensure accuracy and
completeness.
o Inadequate segregation of duties consistent with our internal
control objectives.
o Ineffective utilization of existing administrative personnel
to perform ministerial accounting functions, which would allow
our accounting department the opportunity to perform
bookkeeping, record keeping and other accounting functions
effectively.
o Lack of management review of entries to the general ledger.
Our management has implemented and continues to implement potential
enhancements to our internal controls and procedures that it believes will
remedy the inadequacies in our internal controls and procedures.
The following sets forth the steps we have taken through the fiscal
period ended June 30, 2004.
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o In November, 2003, we hired a permanent chief financial
officer with public company reporting experience.
o In December, 2003, we hired a staff accountant responsible
for, among other things, recording accounts payable. The
individual assists the chief financial officer to identify,
report and record transactions in a timely manner and provides
additional segregation of duties consistent with our internal
control objectives.
o Management reassigned certain tasks among the expanded
accounting department, as well as existing administrative
personnel to perform ministerial accounting functions, to
improve and better accomplish the bookkeeping, record keeping
and other accounting functions.
o We anticipate hiring a new Director of Finance. The new
Director of Finance will be wholly dedicated to the areas of
internal control, financial accounting and reporting.
o The review and sign off on all monthly bank reconciliations by
the chief financial officer has been instituted. o The review
of all underlying agreements, contracts and financing
arrangements prior to their execution for accounting
ramifications has already been undertaken by the chief
financial officer to the extent possible.
o We strengthened certain controls over cash disbursements
including adopting a policy that requires dual signatures of
two senior officers, at least one of whom is not involved in
the transaction, on disbursements in excess of $10,000.
o We implemented a policy requiring attendance by outside
counsel at all Board and Audit Committee meetings, including
the timely preparation of minutes of such meetings and reports
to management to discuss our implementation of any plans to
address conditions constituting the material weaknesses in its
internal controls.
We intend on implementing the following plans to enhance our internal
controls in the fiscal quarter ending September 30, 2004.
o As the new Director of Finance transitions into his
responsibilities and gains a full understanding of our
business, it is anticipated that this additional resource will
allow further redistribution of responsibilities among the
expanded accounting department, and, more specifically,
provide the chief financial officer with the necessary time to
perform oversight and supervisory functions in future periods.
This includes enabling timely review of expense reports,
underlying agreements, entries to the general ledger and
periodic filings by the chief financial officer.
o Our implementation of formal mechanized month end, quarter end
and year end closing and consolidation processes.
o The appointment of additional independent directors who will
serve on our Audit Committee.
While we believe that the remedial actions that have been or will be
taken will result in correcting the conditions constituting the material
weaknesses in our internal controls as soon as practicable, the exact timing of
when the conditions will be corrected is dependent upon future events which may
or may not occur. We are making every effort to correct the conditions
expediently and expect to correct the conditions, thereby eliminating the
material weaknesses no later than the fourth quarter of fiscal year 2004. It is
estimated that the cost to implement the actions set forth above will be
approximately $300,000 for our fiscal year ended December 31, 2004 and
approximately $200,000 for each fiscal year thereafter.
We rely on investments and financings to provide working capital. While
we believe that we can continue to sell our securities to raise the cash needed
to continue operating until cash flow from operations can support our business,
there can be no assurance that this will occur.
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There can be no assurance that additional investments in our securities or other
debt or equity financings will be available to us on favorable terms, or at all,
to adequately support the development and deployment of our technology.
Moreover, failure to obtain such capital on a timely basis could result in lost
business opportunities.
The success of the development, distribution and deployment of our
technology is dependent to a significant degree on our key management and
technical personnel. We believe that our success will also depend upon our
ability to attract, motivate and retain highly skilled, managerial, sales and
marketing, and technical personnel, including software programmers and systems
architects skilled in the computer languages in which our technology operates.
Competition for such personnel in the software and information services
industries is intense. The loss of key personnel, or the inability to hire or
retain qualified personnel, could have a material adverse effect on our results
of operations, financial condition and/or business.
We expect to continue to experience losses until such time as our
technology can be successfully deployed and produce revenues. The continuing
development, marketing and deployment of our technology will depend upon our
ability to obtain additional financing. Our technology has generated limited
recurring revenues to date. We are funding our operations now through the sale
of our securities. We are currently exploring the feasibility of using LifeRamp
to commence a new business, making non-recourse loans to terminally ill cancer
patients secured by their life insurance policies. There can be no assurance
that we will secure financing on favorable terms necessary to fund that proposed
business model, that the necessary regulatory approvals will be obtained or that
the business, if commenced, will be cash flow positive or profitable. During
2003, we invested approximately $1.1 million in LifeRamp, and we will continue
to divert working capital from HealthRamp until the LifeRamp business becomes
self-supporting or is discontinued.
We may not be able to retain our listing on the American Stock
Exchange. The American Stock Exchange has not notified us of any listing
concerns. However, should our common stock trade at a low price for a
substantial period of time or should the American Stock Exchange consider our
circumstances for continued listing in a negative light, we may not be able to
retain our listing. The American Stock Exchange has certain listing requirements
in order for us to continue to have our common stock traded on this exchange.
Although the American Stock Exchange does not identify a specific minimum price
per share that our stock must trade above or any other rigid standards
compelling delisting, we may risk delisting if our common stock trades at a low
price per share for a substantial period of time or if it fails to meet the
financial condition, result of operations, market capitalization or other
financial or non-financial standards considered by the American Stock Exchange.
Trading in our common stock after a delisting, if any, would likely be conducted
in the over-the-counter markets in the so-called "pink sheets" or on the
National Association of Securities Dealers' Electronic Bulletin Board. As a
consequence of a delisting our shareholders would find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, our
common stock, and our common stock would become substantially less attractive as
collateral for margin and purpose loans, for investment by financial
institutions under their internal policies or state investment laws or as
consideration in future capital raising transactions.
Although we have had operations since 1988, because of our move away
from temporary healthcare staffing to provide healthcare connectivity solutions
at the point of care, we have a relatively short operating history in the
healthcare connectivity solutions business and limited financial data to
evaluate our business and prospects. In addition, our business model is likely
to continue to evolve as we attempt to develop our product offerings and enter
new markets. As a result, our potential for future profitability must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered by companies that are
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attempting to move into new markets and continuing to innovate with new and
unproven technologies. We are still in the process of gaining experience in
marketing physician connectivity products, providing support services,
evaluating demand for products, financing a technology business and dealing with
government regulation of health information technology products. While we are
putting together a team of experienced executives, they have come from different
backgrounds and may require some time to develop an efficient operating
structure and corporate culture for our company. Furthermore, our executive
management and Board of Directors have been subject to change as executives have
left or been terminated and others have been hired to take their places and
directors have left and others have been elected or appointed to take their
places. Such changes can cause disruption and distraction.
Although we have focused our business on healthcare connectivity, we
may decide to explore new business models before our core business generates
cash flow, if at all. Until feasibility is proven for any such new business
models, such as those of our LifeRamp subsidiary described above, some of our
scarce resources may be allocated to endeavors which may never be
commercialized.
The success of our products and services in generating revenue may be
subject to the quality and completeness of the data that is generated and stored
by the physician or other healthcare professionals and entered into our
interconnectivity systems, including the failure to input appropriate or
accurate information. Failure or unwillingness by the healthcare professional to
accommodate the required information may result in our not being paid for our
services.
As a developer of connectivity technology products, we will be required
to anticipate and adapt to evolving industry standards and regulations and new
technological developments. The market for our technology is characterized by
continued and rapid technological advances in both hardware and software
development, requiring ongoing expenditures for research and development, and
timely introduction of new products and enhancements to existing products. Our
future success, if any, will depend in part upon our ability to enhance existing
products, to respond effectively to technology changes and changes in applicable
regulations, and to introduce new products and technologies that are functional
and meet the evolving needs of our clients and users in the healthcare
information systems market.
We rely on a combination of internal development, strategic
relationships, licensing and acquisitions to develop our products and services.
The cost of developing new healthcare information services and technology
solutions is inherently difficult to estimate. Our development of proposed
products and services may take longer than originally expected, require more
testing than originally anticipated and require the acquisition of additional
personnel and other resources. In addition, there can be no assurance that the
products or services we develop or license will be able to compete with the
alternatives available to our customers.
New or newly integrated products and services will not become
profitable unless they achieve sufficient levels of market acceptance. There can
be no assurance that healthcare providers will accept from us new products and
services, or products and services that result from integrating existing and/or
acquired products and services, including the products and services we are
developing to integrate our services into the physician's office or other
medical facility, such as our handheld solution. In addition, there can be no
assurance that any pricing strategy that we implement for any such products and
services will be economically viable or acceptable to the target markets.
Failure to achieve broad penetration in target markets with respect to new or
newly integrated products and services could have a material adverse effect on
our business prospects. The market for our connectivity products and services in
the healthcare information systems may be slow to develop due to the large
number of practitioners who are resistant to
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change, as well as the financial investment and workflow interruptions
associated with change, particularly in a period of rising pressure to reduce
costs in the marketplace.
Achieving market acceptance of new or newly integrated products and
services is likely to require significant efforts and expenditures. Achieving
market acceptance for new or newly integrated products and services is likely to
require substantial marketing efforts and expenditure of significant funds to
create awareness and demand by participants in the healthcare industry. In
addition, deployment of new or newly integrated products and services may
require the use of additional resources for training our existing sales force
and customer service personnel and for hiring and training additional
salespersons and customer service personnel. There can be no assurance that the
revenue opportunities from new or newly integrated products and services will
justify amounts spent for their development, marketing and roll-out.
We could be subject to breach of warranty claims if our software
products, information technology systems or transmission systems contain errors,
experience failures or do not meet customer expectations. We could face breach
of warranty or other claims or additional development costs if the software and
systems we sell or license to customers or use to provide services contain
undetected errors, experience failures, do not perform in accordance with their
documentation, or do not meet the expectations that our customers have for them.
Undetected errors in the software and systems we provide or those we use to
provide services could cause serious problems for which our customers may seek
compensation from us. We attempt to limit, by contract, our liability for
damages arising from negligence, errors or mistakes. However, contractual
limitations on liability may not be enforceable in certain circumstances or may
otherwise not provide sufficient protection to us from liability for damages.
If our systems or the Internet experience security breaches or are
otherwise perceived to be insecure, our business could suffer. A security breach
could damage our reputation or result in liability. We retain and transmit
confidential information, including patient health information. Despite the
implementation of security measures, our infrastructure or other systems that we
interface with, including the Internet, may be vulnerable to physical break-ins,
hackers, improper employee or contractor access, computer viruses, programming
errors, attacks by third parties or similar disruptive problems. Any compromise
of our security, whether as a result of our own systems or systems that they
interface with, could reduce demand for our services.
Our products provide applications that relate to patient medication
histories and treatment plans. Any failure by our products to provide and
maintain accurate, secure and timely information could result in product
liability claims against us by our clients or their affiliates or patients. We
maintain insurance that we believe currently is adequate to protect against
claims associated with the use of our products, but there can be no assurance
that our insurance coverage would adequately cover any claim asserted against
us. A successful claim brought against us in excess of our insurance coverage
could have a material adverse effect on our results of operations, financial
condition and/or business. Even unsuccessful claims could result in the
expenditure of funds in litigation, as well as diversion of management time and
resources. Certain of our products are subject to compliance with HIPAA. Failure
to comply with HIPAA may have a material adverse effect on our business.
Government regulation of healthcare and healthcare information
technology, are in a period of ongoing change and uncertainty and creates risks
and challenges with respect to our compliance efforts and our business
strategies. The healthcare industry is highly regulated and is subject to
changing political, regulatory and other influences. Federal and state
legislatures and agencies periodically consider programs to reform or revise the
United States healthcare system. These programs may contain proposals to
increase governmental involvement in
8
healthcare or otherwise change the environment in which healthcare industry
participants operate. Particularly, compliance with HIPAA and related
regulations are causing the healthcare industry to incur substantial cost to
change its procedures. Healthcare industry participants may respond by reducing
their investments or postponing investment decisions, including investments in
our products and services. Although we expect these regulations to have the
beneficial effect of spurring adoption of our software products, we cannot
predict with any certainty what impact, if any, these and future healthcare
reforms might have on our business. Existing laws and regulations also could
create liability, cause us to incur additional cost or restrict our operations.
The effect of HIPAA on our business is difficult to predict and there can be no
assurance that we will adequately address the business risks created by the
HIPAA. We may incur significant expenses relating to compliance with HIPAA.
Furthermore, we are unable to predict what changes to HIPAA, or the regulations
issued pursuant to HIPAA, might be made in the future or how those changes could
affect our business or the costs of compliance with HIPAA.
Government regulation of the Internet could adversely affect our
business. The Internet and its associated technologies are subject to government
regulation. Our failure to accurately anticipate the application of applicable
laws and regulations, or any other failure to comply, could create liability for
us, result in adverse publicity, or negatively affect our business. In addition,
new laws and regulations may be adopted with respect to the Internet or other
online services covering user privacy, patient confidentiality, consumer
protection and other services. We cannot predict whether these laws or
regulations will change or how such changes will affect our business. Government
regulation of the Internet could limit the effectiveness of the Internet for the
methods of healthcare e-commerce that we are providing or developing or even
prohibit the sale of particular products and services.
Our Internet-based services are dependent on the development and
maintenance of the Internet infrastructure and data storage facilities
maintained by third parties. Our ability to deliver our Internet-based products
and services is dependent on the development and maintenance of the
infrastructure of the Internet and the maintenance of data storage facilities by
third parties. This includes maintenance of a reliable network backbone and data
storage facilities with the necessary speed, data capacity and security, as well
as timely development of complementary products such as high-speed modems, for
providing reliable Internet access and services. If the Internet continues to
experience increased usage, the Internet infrastructure may be unable to support
the demands placed on it. In addition, the performance of the Internet may be
harmed by increased usage. The Internet has experienced a variety of outages and
other delays as a result of damages to portions of its infrastructure, and it
could face outages and delays in the future. These outages and delays could
reduce the level of Internet usage as well as the availability of the Internet
to us for delivery of our Internet-based products and services.
Some of our products and services will not be widely adopted until
broadband connectivity is more generally available. Some of our products and
services and planned services require a continuous broadband connection between
the physician's office or other healthcare provider facilities and the Internet.
The availability of broadband connectivity varies widely from location to
location and even within a single geographic area. The future availability of
broadband connections is unpredictable and is not within our control. While we
expect that many physician's offices and other healthcare provider facilities
will remain without ready access to broadband connectivity for some period of
time, we cannot predict how long that will be. Accordingly, the lack of these
broadband connections will continue to place limitations on the number of sites
that are able to utilize our Internet-based products and services and the
revenue we can expect to generate form those products and services.
Compliance with legal and regulatory requirements will be critical to
LifeRamp's operations, if any. If we, directly or indirectly through our
subsidiaries, erroneously disclose
9
information that could be confidential and/or protected health information, we
could be subject to legal action by the individuals involved, and could possibly
be subject to criminal sanctions. In addition, if LifeRamp is launched and fails
to comply with applicable insurance and consumer lending laws, states could
bring actions to enforce statutory requirements, which could limit its business
practices in such states, including, without limitation, limiting or eliminating
its ability to charge or collect interest on its loans or related fees, or limit
or eliminate its ability to secure its loans with its borrowers' life insurance
policies. Any such actions if commenced, would have a material and adverse
impact on LifeRamp's business, operations and financial condition.
We have been granted certain patent rights, trademarks and copyrights
relating to our software. However, patent and intellectual property legal issues
for software programs, such as the our products, are complex and currently
evolving. Since patent applications are secret until patents are issued in the
United States, or published in other countries, we cannot be sure that we are
first to file any patent application. In addition, there can be no assurance
that competitors, many of which have far greater resources than we do, will not
apply for and obtain patents that will interfere with our ability to develop or
market product ideas that we have originated. Furthermore, the laws of certain
foreign countries do not provide the protection to intellectual property that is
provided in the United States, and may limit our ability to market our products
overseas. We cannot give any assurance that the scope of the rights we have are
broad enough to fully protect our technology from infringement.
Litigation or regulatory proceedings may be necessary to protect our
intellectual property rights, such as the scope of our patent. Such litigation
and regulatory proceedings are very expensive and could be a significant drain
on our resources and divert resources from product development. There is no
assurance that we will have the financial resources to defend our patent rights
or other intellectual property from infringement or claims of invalidity. We
have been notified by a party that it believes our pharmacy product may infringe
on patents that it holds. We have retained patent counsel who has made a
preliminary investigation and determined that our product does not infringe on
the identified patents. At this time no legal action has been instituted.
We also rely upon unpatented proprietary technology and no assurance
can be given that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to or disclose
our proprietary technology or that we can meaningfully protect our rights in
such unpatented proprietary technology. No assurance can be given that efforts
to protect such information and techniques will be successful. The failure to
protect our intellectual property could have a material adverse effect on our
operating results, financial position and business.
As of June 30, 2004, we had 179,261,216 outstanding shares of common
stock and 58,205,107 shares of common stock reserved for issuance upon the
exercise of options, warrants, and shares of our convertible preferred stock and
convertible debentures outstanding on such date. Most of these shares will be
immediately saleable upon exercise or conversion under registration statements
we have filed with the SEC. The exercise prices of options, warrants or other
rights to acquire common stock presently outstanding range from $0.01 per share
to $4.97 per share. During the respective terms of the outstanding options,
warrants, preferred stock and other outstanding derivative securities, the
holders are given the opportunity to profit from a rise in the market price of
our common stock, and the exercise of any options, warrants or other rights may
dilute the book value per share of our common stock and put downward pressure on
the price of our common stock. The existence of the options, conversion rights,
or any outstanding warrants may adversely affect the terms on which we may
obtain additional equity financing. Moreover, the holders of such securities are
likely to exercise their rights to acquire common stock at a time when we would
otherwise be able to obtain capital on
10
terms more favorable than could be obtained through the exercise or conversion
of such securities.
We have raised substantial amounts of capital in private placements
from time to time. The securities offered in such private placements were not
registered with the SEC or any state agency in reliance upon exemptions from
such registration requirements. Such exemptions are highly technical in nature
and if we inadvertently failed to comply with the requirements of any of such
exemptive provisions, investors would have the right to rescind their purchase
of our securities or sue for damages. If one or more investors were to
successfully seek such rescission or prevail in any such suit, we could face
severe financial demands that could materially and adversely affect our
financial position. Financings that may be available to us under current market
conditions frequently involve sales at prices below the prices at which our
common stock currently trades on the American Stock Exchange, as well as the
issuance of warrants or convertible securities at a discount to market price.
Investors in our securities may suffer dilution. The issuance of shares
of common stock, or shares of common stock underlying warrants, options or
preferred stock or convertible notes will dilute the equity interest of existing
stockholders and could have a significant adverse effect on the market price of
our common stock. The sale of common stock acquired at a discount could have a
negative impact on the market price of our common stock and could increase the
volatility in the market price of our common stock. In addition, we may seek
additional financing which may result in the issuance of additional shares of
our common stock and/or rights to acquire additional shares of our common stock.
The issuance of our common stock in connection with such financing may result in
substantial dilution to the existing holders of our common stock. Those
additional issuances of common stock would result in a reduction of your
percentage interest in our company.
Historically, our common stock has experienced significant price
fluctuations. One or more of the following factors influence these fluctuations:
o unfavorable announcements or press releases
relating to the technology sector;
o regulatory, legislative or other developments
affecting us or the healthcare industry generally;
o conversion of our preferred stock and convertible
debt into common stock at conversion rates based on
then current market prices or discounts to market
prices of our common stock and exercise of options
and warrants at below current market prices;
o sales by those financing our company through
convertible securities the underlying common stock
of which have been registered with the SEC and may
be sold into the public market immediately upon
conversion; and
o market conditions specific to technology and
internet companies, the healthcare industry and
general market conditions.
In addition, in recent years the stock market has experienced
significant price and volume fluctuations. These fluctuations, which are often
unrelated to the operating performance of specific companies, have had a
substantial effect on the market price for many healthcare
11
related technology companies. Factors such as those cited above, as well as
other factors that may be unrelated to our operating performance, may adversely
affect the price of our common stock.
We have not had earnings, but if earnings were available, it is our
general policy to retain any earnings for use in our operations. Therefore, we
do not anticipate paying any cash dividends on our common stock in the
foreseeable future despite the recent reduction of the federal income tax rate
on dividends. Any payment of cash dividends on our common stock in the future
will be dependent upon our financial condition, results of operations, current
and anticipated cash requirements, preferred rights of holders of preferred
stock, plans for expansion, as well as other factors that our Board of Directors
deems relevant. We anticipate that our future financing agreements may prohibit
the payment of common stock dividends without the prior written consent of those
investors.
We may have to lower prices or spend more money to compete effectively
against companies with greater resources than us, which could result in lower
revenues. The eventual success of our products in the marketplace will depend on
many factors, including product performance, price, ease of use, support of
industry standards, competing technologies and customer support and service.
Given these factors we cannot assure you that we will be able to compete
successfully. For example, if our competitors offer lower prices, we could be
forced to lower prices which could result in reduced or negative margins and a
decrease in revenues. If we do not lower prices we could lose sales and market
share. In either case, if we are unable to compete against our main competitors,
which include established companies with significant financial resources, we
would not be able to generate sufficient revenues to grow our company or reverse
our history of operating losses. In addition, we may have to increase expenses
to effectively compete for market share, including funds to expand our
infrastructure, which is a capital and time intensive process. Further, if other
companies choose to aggressively compete against us, we may have to increase
expenses on advertising, promotion, trade shows, product development, marketing
and overhead expenses, hiring and retaining personnel, and developing new
technologies. These lower prices and higher expenses would adversely affect our
operations and cash flows.
As with any business, growth in absolute amounts of selling, general
and administrative expenses or the occurrence of extraordinary events could
cause actual results to vary materially and adversely from the results
contemplated by the forward-looking statements. Budgeting and other management
decisions are subjective in many respects and thus susceptible to incorrect
decisions and periodic revisions based on actual experience and business
developments, the impact of which may cause us to alter our marketing, capital
expenditures or other budgets, which may, in turn, affect our results of
operations. Assumptions relating to the foregoing involve judgments with respect
to, among other things, future economic, competitive and market conditions, and
future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Although we believe the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could prove inaccurate, and therefore, there can be no assurance
that the results contemplated in the forward-looking statements will be
realized.
In light of the significant uncertainties inherent in the
forward-looking information included herein, the inclusion of such information
should not be regarded as a representation by us or any other person that our
objectives or plans for the Company will be achieved.
12
FORWARD-LOOKING STATEMENTS
Certain information contained in this prospectus and the documents
incorporated by reference into this prospectus include forward-looking
statements (as defined in Section 27A of the Securities Act and Section 21E of
the Securities Exchange Act), which mean that they relate to events or
transactions that have not yet occurred, our expectations or estimates for our
future operations, our growth strategies or business plans or other facts that
have not yet occurred. Such statements can be identified by the use of
forward-looking terminology such as "might," "may," "will," "could," "expect,"
"anticipate," "estimate," "likely," "believe," or "continue" or the negative
thereof or other variations thereon or comparable terminology. The above risk
factors contain discussions of important factors that should be considered by
prospective investors for their potential impact on forward-looking statements
included in this prospectus and in the documents incorporated by reference into
this prospectus. These important factors, among others, may cause actual results
to differ materially and adversely from the results expressed or implied by the
forward-looking statements.
USE OF PROCEEDS
The selling security holders will receive the net proceeds from the
sale of shares. We will not receive any of the proceeds from any sale of the
shares by the selling security holders. However, we will receive the proceeds
from the cash exercise of warrants to purchase certain of the shares offered
hereunder. If all warrants covered hereby are exercised for cash in accordance
with their terms, we would receive gross proceeds of $2,813,496.10. Any such
gross proceeds will be used for working capital purposes.
DESCRIPTION OF THE TRANSACTIONS
On October 1, 2002, we entered into a Consulting Agreement with Mr.
Benjamin Mayer, which agreement was amended by our mutual agreement on December
4, 2003 (as amended, the "Consulting Agreement"), whereby Mr. Mayer agreed to
perform financial advisory services to us. In connection with the Consulting
Agreement, as a portion of compensation owed to Mr. Mayer and in addition to
payment in cash of $100,000 from us to Mr. Mayer, we agreed to issue to Mayer &
Associates LLC, an entity owned and controlled by Mr. Mayer, warrants to
purchase an aggregate of 173,912 shares of our common stock exercisable at $0.80
cents per share for a five-year term. In connection with the issuance of
warrants, we agreed to register the shares underlying the warrants with the SEC
on a registration statement (of which this prospectus forms a part).
On November 25 and November 26, 2003, we entered into private placement
transactions with three individual accredited investors, whereby we sold an
aggregate of 15,624 units at a purchase price of $4.80 per unit. Each unit
consisted of ten shares of common stock and warrants to purchase two shares of
common stock exercisable at $0.82 cents per share. The warrants are exercisable
for a five-year term. The aggregate number of shares of common stock sold in the
private placement transactions was 156,240 and warrants to purchase 31,248
shares of common stock. We received aggregate gross proceeds of $75,000 as a
result of these private placements. We agreed to register the shares of common
stock and shares underlying the warrants on a registration statement (of which
this prospectus forms a part).
On December 23, 2003 through January 15, 2004, we entered into private
placement transactions with four individual accredited investors and one entity
which also was an accredited investor, whereby we sold an aggregate of 203,750
units at a purchase price of $4.00 per unit. Each unit consisted of ten shares
of common stock and warrants to purchase two shares of common stock exercisable
at $0.60 cents per share. The warrants are exercisable for a five-year
13
term. The aggregate number of shares of common stock sold in the private
placement transactions was 2,037,500 and warrants to purchase 407,500 shares of
common stock. We received aggregate gross proceeds of $815,000 as a result of
these private placements. We agreed to register the shares of common stock and
shares underlying the warrants on a registration statement (of which this
prospectus forms a part).
On March 4, 2004, we entered into a Common Stock and Warrant Purchase
Agreement (the "March Agreement") with Hilltop Services Ltd. ("Hilltop"), a
non-US based accredited investor, which is not affiliated with the Company.
Under the terms of the March Agreement, we sold to Hilltop an aggregate of
10,869,565 shares of Common Stock for the purchase price of $5,000,000. In
addition, we issued to Hilltop warrants to purchase an aggregate of 2,173,913
shares of our common stock, which are exercisable at $0.80 cents per share. The
warrants have a term of five years. If we enter into a transaction at a purchase
price per share less than $0.46 cents per share within forty-five days following
the effective date of the registration statement which includes the shares and
warrants issued to Hilltop, we may be required to issue additional shares of
common stock to Hilltop. In connection with the potential issuance of additional
shares, we have agreed to register 200% of the number of shares issued to
Hilltop on a registration statement (of which this prospectus forms a part).
Pursuant to the Registration Rights Agreement entered into concurrently
with the March Agreement, we have agreed to register the shares of common stock
underlying the common stock and warrants with the SEC on a registration
statement (of which this prospectus forms a part) and to pay to Hilltop
liquidated damages if the registration statement is not filed on or before April
15, 2004 and/or is not declared effective within 120 days following the date of
our agreement, an amount equal to 1 1/2% of the purchase price for each 30 day
period (or portion thereof) of delayed effectiveness.
vFinance Investments, Inc. served as placement agent for sale of the
common stock under the March Agreement. As part of vFinance's compensation, two
of vFinance's managing directors, Richard Rosenblum and David Stefansky,
received an aggregate of 406,956 shares of common stock and warrants to purchase
an aggregate of 81,392 shares of common stock. In connection with this financing
transaction, vFinance received warrants to purchase 311,251 shares of our common
stock, at an exercise price of $0.80 cents per share. vFinance distributed to
each of Messrs. Rosenblum and Stefanksy, respectively, warrants to purchase
219,374 shares of our common stock at an exercise price of $0.80 cents. Each of
the warrants has a term of five years and terms and conditions identical to
those issued to Hilltop in the March Agreement. Pursuant to the Registration
Rights Agreement entered into concurrently with the March Agreement, we agreed
to register the shares of common stock and the shares of common stock underlying
the warrants on a registration statement (of which this prospectus is a part).
Reference is made to the Consulting Agreement, the March Agreement, the
Warrants, and the Registration Rights Agreement that are filed as exhibits, or
incorporated by reference, to the Registration Statement for more complete
descriptions of the provisions that are summarized under this caption.
SELLING STOCKHOLDERS
The following table sets forth the shares beneficially owned, as of
July 8, 2004, by the selling stockholders prior to the offering contemplated by
this prospectus, the number of shares each selling stockholder is offering by
this prospectus and the number of shares which each
14
would own beneficially if all such offered shares are sold. The selling
stockholders acquired their beneficial interests in the shares being offered
hereby in transactions described under the heading "Description of the
Transactions." Except as expressly set forth below, none of the selling
stockholders is a registered broker-dealer or an affiliate of a registered
broker-dealer. Each of the selling stockholders has acquired his, her or its
shares solely for investment and not with a view to or for resale or
distribution of such securities.
Beneficial ownership is determined in accordance with SEC rules and
includes voting or investment power with respect to the securities. However,
each of the selling stockholders is subject to certain limitations on the
exercise of their warrants, if any. The most significant of these limitations is
that such selling stockholder may not exercise its warrants, if such exercise
would cause such holder's beneficial ownership of our common stock (excluding
shares underlying any of their or unexercised warrants) to exceed 4.99% of the
outstanding shares of common stock.
15
Number of
Shares of Percentage of
Shares of Common Common Stock Common Stock
Stock Owned Prior Shares of Common Owned After Owned After
Names and Addresses to Offering Stock to be Sold the Offering the Offering
------------------- ----------- ---------------- ------------ ------------
Hilltop Services Ltd. (1) 13,043,478 13,043,478 (2) 0 0
Richard Rosenblum (3) 1,113,548 463,548 (4) 650,000 (5) *
David Stefansky (3) 1,143,548 463,548 (4) 680,000 (5) *
vFinance Investments, Inc. (6) 723,672 311,251 (7) 412,421 (5) *
Mayer & Associates LLC (8) 782,130 173,912 (9) 608,218 (5) *
Alan Smith (10) 300,000 300,000 (11) 0 0
Arnold Kamhi (12) 225,000 225,000 (13) 0 0
Dan & Fran Berrey (14) 900,000 900,000 (15) 0 0
Living Trust
Lawrence Coben (16) 62,496 62,496 (17) 0 0
Neil Berliner (18) 62,496 62,496 (19) 0 0
Stifel Nicolaus (Custodian for 62,496 62,496 21) 0 0
Barry Olman IRA) (20)
Thomas J. Meade Jr. (22) 300,000 300,000 (23) 0 0
Black Hills Investment Corp. (24) 720,000 720,000 (25) 0 0
------------------------
* Less than 1%
(1) The selling stockholder advised us that the natural person having
voting or dispositive power over such shares of common stock is Ms.
Mary Lowenthal. The address of the selling stockholder is Mevot David
8, Ramat Gan, Israel.
(2) Includes 2,173,913 shares issuable upon exercise of warrants to
purchase shares of common stock. The numbers on the table reflect the
actual number of shares issued or issuable to the selling stockholder.
We are registering 200% of the shares of common stock held by the
selling stockholder to include other shares of our common stock which
might be issuable to the selling stockholder under the terms of the
agreements between us and the selling stockholder. See the
16
sections of this prospectus titled "Description of the Transactions"
for more information regarding our agreement with the selling
stockholder.
(3) The selling stockholder is a Senior Vice President of vFinance
Investments, Inc.
(4) Includes 260,070 shares issuable upon exercise of warrants to purchase
shares of common stock.
(5) The selling stockholder may sell these shares pursuant to a separate
registration statement which has been declared effective by the SEC.
(6) The selling stockholder is a registered broker-dealer, which acted as
placement agent for the private placement to Hilltop Services Ltd. The
selling stockholder advised us that the only natural persons having
voting or dispositive power over such warrants and the related shares
of common stock is Leonard Sokolow. The address of the selling
shareholder is 3010 N. Military Trail, Suite 300, Boca Raton, FL 33431.
(7) Represents shares issuable on exercise of warrants issued to the
placement agent.
(8) The selling stockholder advised us that the only natural person having
voting or dispositive power over such shares is Mr. Benjamin Mayer. The
address of the selling stockholder is 246 12th Street, Lakewood, New
Jersey 08701.
(9) Represents shares issuable upon exercise of warrants to purchase shares
of common stock.
(10) The address of the selling stockholder is 135 Sycamore Drive, East
Hills, New York 11576.
(11) Includes 50,000 shares issuable upon exercise of warrants to purchase
shares of common stock.
(12) The address of the selling stockholder is 27 Evans Drive, Brookville,
New York 11545.
(13) Includes 37,500 shares issuable upon exercise of warrants to purchase
shares of common stock.
(14) The address of the selling stockholder is P.O. Box 3500, No. 224,
Sisters, Oregon 97759.
(15) Includes 150,000 shares issuable upon exercise of warrants to purchase
shares of common stock.
(16) The address of the selling stockholder is 277 Fairfield Road, Suite
207, Fairfield, New Jersey 07004.
(17) Includes 10,416 shares issuable upon exercise of warrants to purchase
shares of common stock.
(18) The address of the selling stockholder is 3194 Jason Drive, Bellmore,
New York 11710.
(19) Includes 10,416 shares issuable upon exercise of warrants to purchase
shares of common stock.
(20) The address of the selling stockholder is 501 North Broadway, St.
Louis, MO 63102.
(21) Includes 10,416 shares issuable upon exercise of warrants to purchase
shares of common stock.
(22) The address of the selling stockholder is 611 Jeanette Road, Endicott,
New York 13760.
(23) Includes 50,000 shares issuable upon exercise of warrants to purchase
shares of common stock.
(24) The address of the selling stockholder is 330 South Decatur Blvd. No.
1000, Las Vegas, Nevada 89107.
(25) Includes 50,000 shares issuable upon exercise of warrants to purchase
shares of common stock.
17
Relationship Between Ramp and the Selling Stockholders
Except as disclosed in this prospectus, none of the selling
stockholders are affiliates or controlled by our affiliates. Except as disclosed
in this prospectus, none of the selling stockholders are now or were at any time
in the past an officer or director of ours or any of any of our predecessors or
affiliates. We have separate contractual obligations to file this registration
statement (of which this prospectus forms a part) with each of the selling
stockholders.
DESCRIPTION OF SECURITIES
Our authorized capital consists of 400,000,000 shares of common stock,
par value $.001 per share, and 2,500,000 shares of preferred stock, par value
$1.00 per share. As of June 30, 2004, we had outstanding 179,261,216 shares of
common stock and 1 share of 1996 Preferred Stock. As of such date, our common
stock was held of record by approximately 460 persons and beneficially owned by
approximately 10,000 persons.
Common Stock
Each share of common stock is entitled to one vote at all meetings of
stockholders. Stockholders are not permitted to accumulate votes in the election
of directors. Currently, the Board of Directors consists of five directors, who
serve for staggered terms of three years, with at least two directors elected at
every annual meeting. We also currently have one vacancy on our Board of
Directors. All shares of common stock are equal to each other with respect to
liquidation rights and dividend rights. There are no preemptive rights to
purchase any additional shares of common stock. In the event of our liquidation,
dissolution or winding up, holders of the common stock will be entitled to
receive on a pro rata basis all of our assets remaining after satisfaction of
all liabilities and preferences of the outstanding preferred stock.
Preferred Stock
We are authorized to issue up to 2,500,000 shares of preferred stock.
Our preferred stock may be issued in one or more series, the terms of which may
be determined at the time of issuance by our Board of Directors, without further
action by stockholders and may include voting rights (including the right to
vote as a series on particular matters), preferences as to dividends and
liquidation, conversion, redemption rights and sinking fund provisions. The
issuance of preferred stock could reduce the rights, including voting rights, of
the holders of common stock, and, therefore, reduce the value of our common
stock. In particular, specific rights granted to future holders of preferred
stock could be used to restrict our ability to merge with or sell our assets to
a third party, thereby preserving control of Ramp Corporation by existing
management.
Transfer Agent and Registrar
We have retained Computershare Trust Company, Inc., 350 Indiana Street,
Suite 800, Golden, Colorado 80401, as Transfer Agent and Registrar, for our
common stock. Computershare Trust Company's telephone number is (303) 262-0600.
PLAN OF DISTRIBUTION
The selling security holders and any of their pledgees, donees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on any stock
18
exchange, market or trading facility on which the shares are traded. These sales
may be at fixed or negotiated prices. The selling security holders may use any
one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer 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-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales, but, if at all, only after the effectiveness of
the Registration Statement and the approval for listing by the
American Stock Exchange of the shares of common stock offered
hereby;
o broker-dealers may agree with the selling security holders to
sell a specified number of such shares at a stipulated price
per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling security holders may also sell shares under Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"), if available,
rather than under this prospectus.
The selling security holders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
The selling security holders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. We believe that the selling security holders have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares other than ordinary course
brokerage arrangements, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of shares by the selling security
holders.
Broker-dealers engaged by the selling security holders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The selling security holders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
Selling security holders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. If the selling security
holders are deemed to be underwriters, the selling security holders may be
subject to certain statutory and regulatory liabilities, including liabilities
imposed pursuant to Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.
We are required to pay all fees and expenses incident to the
registration of the shares. Otherwise, all discounts, commissions or fees
incurred in connection with the sale of the common stock offered hereby will be
paid by the selling security holders.
19
Upon our being notified by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and complied with.
We advised the selling security holders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales of the shares offered hereby.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in general, that a corporation incorporated under the
laws of the State of Delaware, such as the registrant, may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than a derivative action
by or in the right of the corporation) by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. In the case of a derivative action, a Delaware corporation
may indemnify any such person against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification will be made in
respect of any claim, issue or matter as to which such person will have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonably entitled to
indemnity for such expenses.
Our Certificate of Incorporation and Bylaws provide that we shall
indemnify our directors, and officers, employees and agents to the extent and in
the manner permitted by the provisions of the laws of the State of Delaware, as
amended from time to time, subject to any permissible expansion or limitation of
such indemnification, as may be set forth in any stockholders' or directors'
resolution or by contract.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling Ramp pursuant
to the foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission, such
20
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file reports, proxy statements, information statements and other
information with the SEC. You may read and copy this information, for a copying
fee, at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on its
public reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services, from the American Stock Exchange and at
the web site maintained by the SEC at http://www.sec.gov.
We have filed the Registration Statement under the Securities Act, with
respect to the securities offered pursuant to this prospectus. This prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement and the exhibits filed as a part thereof, which may be
found at the locations and website referred to above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission (the "SEC") allows us to
"incorporate by reference" into this prospectus the information we file with the
SEC, which means that we can disclose important information to you by referring
to those documents. The information incorporated by reference is an important
part of this prospectus. We incorporate by reference the following documents we
filed with the SEC:
o Our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2003, filed on May 17, 2004;
o Our Annual Report on Form 10-K for the fiscal year ended
December 31, 2003, filed on April 14, 2004;
o Our Current Report on Form 8-K, filed on June 9, 2004;
o Our Current Report on Form 8-K/A, filed on January 26, 2004;
o Our Definitive Proxy Statement to Shareholders, dated April 4,
2003; and
o Our Definitive Proxy Statement to Shareholders, dated November
6, 2003.
We are also incorporating by reference additional documents that we may
file with the Commission under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act prior to the termination of this offering.
If you are a stockholder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them through the Commission
or us. Documents incorporated by reference are available from us without charge,
except exhibits, unless we have specifically incorporated by reference an
exhibit into a document that this prospectus incorporates. Stockholders may
obtain documents incorporated by reference into this prospectus by requesting
them in writing or by telephone from:
Ramp Corporation
Investor Relations
33 Maiden Lane
New York, New York 10038
(212) 440-1500
21
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be
passed upon for us by Jenkens & Gilchrist Parker Chapin LLP, 405 Lexington
Avenue, New York, New York.
EXPERTS
Our consolidated financial statements as of and for the year ended
December 31, 2003 appearing in our 2003 Form 10-K have been audited by BDO
Seidman, LLP, independent certified public accountants, as stated in their
report appearing therein which contained an explanatory paragraph indicating
that substantial doubt exists as to the Company's ability to continue as a going
concern, and have been incorporated herein by reference in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
Our consolidated financial statements as of December 31, 2002, and for
each of the two years in the period ended December 31, 2002 appearing in our
2003 Form 10-K have been audited by Ehrhardt Keefe Steiner & Hottman PC,
independent auditors, as stated in their report appearing therein, and have been
incorporated herein by reference in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The financial statements of The Duncan Group, Inc. (d/b/a Frontline
Physicians Exchange) as of and for the years ended December 31, 2002 and 2001,
appearing in our current report on Form 8-K/A, filed on January 26, 2004, and in
our current report on Form 8-K, filed on June 9, 2004, were audited by BDO
Seidman, LLP, independent certified public accountants, as stated in their
report appearing therein, and have been incorporated herein by reference in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
22
=======================================================================================================
We have not authorized any dealer, salesperson or
any other person to give any information or to represent
anything other than those contained in this prospectus in
connection with the offer contained herein, and, if given or
made, you should not rely upon such information or
representations as having been authorized by Ramp
Corporation. This prospectus does not constitute an offer of 28,364,746
any securities other than those to which it relates or an SHARES OF COMMON STOCK
offer to sell, or a solicitation of an offer to buy, those
to which it relates in any state to any person to whom it is
not lawful to make such offer in such state. The delivery of RAMP CORPORATION
this prospectus at any time does not imply that the
information herein is correct as of any time after the date
of this prospectus.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY........................................1
RISK FACTORS..............................................4
FORWARD-LOOKING STATEMENTS...............................13
DESCRIPTION OF THE TRANSACTIONS..........................13 ____________
SELLING STOCKHOLDERS.....................................14
DESCRIPTION OF SECURITIES................................18 PROSPECTUS
PLAN OF DISTRIBUTION.....................................18 ____________
INDEMNIFICATION OF OFFICERS
AND DIRECTORS..........................................20
WHERE YOU CAN FIND MORE
INFORMATION ABOUT US...................................21
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE...........................................21
LEGAL MATTERS............................................22
EXPERTS .................................................22
July 8, 2004
=======================================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a list of the estimated expenses to be incurred by the
Registrant in connection with the issuance and distribution of the shares being
registered hereby.
Securities and Exchange Commission registration fee ............$ 1,986.90
Printing and engraving expenses ................................ 1,000.00
Legal fees and expenses ........................................ 50,000.00
Accounting fees and expenses ................................... 50,000.00
Transfer Agent and Trustee fees and expenses ................... 1,000.00
Miscellaneous .................................................. 20,000.00
Total ......................................................... $ 123,986.90
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in general, that a corporation incorporated under the
laws of the State of Delaware, such as the registrant, may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding (other than a derivative action
by or in the right of the corporation) by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. In the case of a derivative action, a Delaware corporation
may indemnify any such person against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification will be made in
respect of any claim, issue or matter as to which such person will have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonably entitled to
indemnity for such expenses.
Our Certificate of Incorporation and Bylaws provide that we shall
indemnify our directors, and officers, employees and agents to the extent and in
the manner permitted by the provisions of the laws of the State of Delaware, as
amended from time to time, subject to any permissible expansion or limitation of
such indemnification, as may be set forth in any stockholders' or directors'
resolution or by contract.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling Ramp pursuant
to the foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission, such
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indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Item 16. Exhibits.
Exhibit
Number Description
------ -----------
4.1 Common Stock and Warrant Purchase Agreement, dated March 4, 2004,
relating to the sale of Stock by and between the Company and Hilltop
Services Ltd. ("Hilltop") (Incorporated by reference to Exhibit 4.34 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 (the "2003 Form 10-K")).
4.2 Warrant issued to Hilltop at an exercise price of $0.80 cents
(Incorporated by reference to Exhibit 4.36 to the 2003 Form 10-K).
4.3 Warrant issued to vFinance Investments, Inc. at an exercise price of
$0.80 cents (Incorporated by reference to Exhibit 4.36 to the 2003 Form
10-K).
4.4 Warrant issued to David Stefansky at an exercise price of $0.80 cents
(Incorporated by reference to Exhibit 4.36 to the 2003 Form 10-K).
4.5 Warrant issued to Richard Rosenblum at an exercise price of $0.80 cents
(Incorporated by reference to Exhibit 4.36 to the 2003 Form 10-K).
4.6 Registration Rights Agreement, dated March 4, 2003, by and between the
Company and Hilltop (Incorporated by reference to Exhibit 4.35 to the
2003 Form 10-K).
4.7 Consulting Agreement, dated as of October 1, 2002, by and between the
Company and Mr. Benjamin Mayer, as amended on December 4, 2003
(Incorporated by reference to Exhibit 4.30 to the 2003 Form 10-K).
4.8 Warrant issued to Mayer & Associates LLC at an exercise price of $0.80
cents (Incorporated by reference to Exhibit 4.36 to the 2003 Form
10-K).
4.9 Stock Purchase Agreement and Warrant issued to each of the accredited
investors in private placement transactions (Incorporated by reference
to Exhibit 4.33 to the 2003 Form 10-K).
5.1 Opinion of Jenkens & Gilchrist Parker Chapin LLP.
23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC.
23.2 Consent of BDO Seidman, LLP.
23.3 Consent of Jenkens & Gilchrist Parker Chapin LLP (included in Exhibit
5.1).
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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:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(b) 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 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective Registration Statement;
(c) 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 clauses (a) and (b) do not apply if the
information required to be included in a post-effective amendment by
such clauses is contained in periodic reports filed with or furnished
to the Securities and Exchange Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed 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.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this 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 may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described
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under Item 15 above, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities, other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding, is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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 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.
(3) The undersigned Registrant hereby 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on July 8, 2004.
RAMP CORPORATION
By: /s/ Andrew Brown
---------------------------------------
Andrew Brown
Chief Executive Officer and President
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