Edgar Filing: MEDIX RESOURCES INC

form-s2_062102

As filed with the Securities and Exchange Commission on June 27, 2002 Registration No. 333-73572

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

PRE-EFFECTIVE AMENDMENT NO.4

TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MEDIX RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)

Colorado 84-1123311
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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The Graybar Building
420 Lexington Ave., Suite 1830
New York, New York 10170
(212) 697-2509
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)

Lyle B. Stewart, Esq.
Lyle B. Stewart, P.C.
3751 S. Quebec Street
Denver, CO 80237
(303) 267-0920
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.

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|

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

SUBJECT TO COMPLETION

DATED JUNE 27, 2002

PROSPECTUS

MEDIX RESOURCES, INC.

496,250 Shares of Common Stock

The shareholders of Medix Resources, Inc. named herein will have the right to
offer and sell up to an aggregate of 496,250 shares of our common stock under
this Prospectus.

Medix will not receive directly any of the proceeds from the sale of these
shares by the selling shareholders. However, Medix will receive the proceeds of
the exercise of the options and warrants to purchase the shares to be sold
hereunder. Medix will pay the expenses of registration of these shares.

The common stock is traded on the American Stock Exchange under the symbol
"MXR". On June 25, 2002, the closing price of the common stock was reported as
$0.46.

Medix has available to it an equity line of credit that permits it to draw funds
for its operations, from time to time, and issue shares of its common stock to
the providers of such facility in connection with such draws. The shares issued
are registered so that they can be sold to the public upon issuance. Currently,
4,796,763 shares are registered for sale by the equity line of credit providers
in connection with future draws. See "Equity Line Financing."

The securities offered hereby involve a high degree of risk. See "RISK FACTORS"
beginning on page 3 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 the 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 June __, 2002

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 shareholders 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.

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TABLE OF CONTENTS

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SUMMARY

RISK FACTORS

FORWARD-LOOKING STATEMENTS

THE COMPANY

EQUITY LINE FINANCING

USE OF PROCEEDS

SELLING SHAREHOLDERS

DESCRIPTION OF SECURITIES

PLAN OF DISTRIBUTION

INDEMNIFICATION OF OFFICERS AND DIRECTORS

AVAILABLE INFORMATION

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

LEGAL MATTERS

EXPERTS

SUMMARY

This Prospectus covers the offering and sale of up to 496,250 shares of our
common stock to the public by certain selling shareholders listed under the
heading "Selling Shareholders" further back in this Prospectus. As of June 25,
2002, we had 62,923,624 shares of our common stock outstanding, and
approximately 29,676,164 shares were issuable upon the exercise of outstanding
options, warrants or other rights, and the conversion of outstanding preferred
stock.

We are developing software products for Internet-based communications and
information management by medical service providers. We have no revenue from
operations and are funding the development of our software products through the
sales of our securities. We have granted a security interest in all of our
intellectual property assets to secure a financing. See "The Company-Recent
Developments" and "Risk Factors."

Because of our continuing losses, and the lack of a certain source of capital to
fund our development of software products, our independent accountants included
a "going concern" exception in their audit report on our audited financial
statements for the year 2001. The "going concern" exception signifies that
significant questions exist about our ability to continue in business. See "Risk
Factors."

Currently, we are funding our development and deployment activities through an
equity line of credit financing, which is not an assured source of funds. The
equity line of credit is provided by Cornell Capital Partners, L.P. and Dutchess
Private Equities Fund, L.P. (the "providers"), which jointly provide the
facility under a single agreement. The agreement provides that we may draw down
up to $10,000,000 over its two-year term, ending June 12, 2003, subject to the
conditions for the draws being satisfied, which can not be assured. We issue
shares of our common stock to the providers of such facility in connection with
such draws. The shares issued are registered so that they can be sold to the
public immediately upon issuance. We have made 17 draws on the equity line of
credit since August of 2001. As of June 18, 2002, we had received $2,681,099 in
advances, from which offering expenses of $198,511 were paid, and had issued to
the providers 4,703,237 shares of our common stock relating to the advances. An
additional 542,847 shares have been issued to affiliates of the providers as
fees for arranging the equity line facility. Currently, 4,796,763 shares are
registered for sale by the providers in connection with future draws. The shares
issued pursuant to the equity line advances to date have been priced from $0.41
to $0.77 per share. See "Risk Factors" and "Equity Line Financing."

Our principal executive office is located at 420 Lexington Avenue, Suite 1830,
New York, NY 10170, and its telephone number is (212) 697-2509. Our principal
administrative office is at 7100 East Belleview Ave., Greenwood Village, CO
80111, and its telephone number is (303) 741-2045.

RISK FACTORS

An investment in our common stock:
o has a high degree of risk;
o is highly speculative;
o should only be considered by those persons or entities who can
afford to lose their entire investment.

In addition to the other information contained in this Prospectus, the following
risk factors should be carefully considered in evaluating our business and an
investment in our shares. The order in which the following risk factors are
presented does not indicate the relative magnitude of the risks described.

Our continuing losses endanger our viability and have caused our accountants to
issue a "going concern" exception in their annual audit report.

We reported net losses of ($10,636,000), ($5,415,000) and ($4,847,000) for the
years ended December 31, 2001, 2000 and 1999, respectively, and a net loss of
($1,677,000) for the quarter ending March 31, 2002. At March 31, 2002, we had an
accumulated deficit of ($35,737,000) and a negative working capital of
($1,396,000). Our Cymedix(R)products are still in the testing and deployment
stage and have not generated any significant revenue to date. We are funding our
operations through the sale of our securities. Our independent accountants have
included a "going concern" exception in their audit reports on our audited 2000
and 2001 financial statements. See our Form 10-K, as amended, for the fiscal
year ended December 31, 2001.

Our need for additional financing is acute and failure to obtain it could lead
to the financial failure of our company.

We expect to continue to experience losses, in the near term, until such time as
our Cymedix(R) software products can be successfully deployed with customers and
produce revenue. The continuing development, marketing and deployment of the
Cymedix software products will depend upon our ability to obtain additional
financing. Our Cymedix(R) products are still in the testing and deployment stage
and have not generated any significant revenue to date. We are funding our
operations through the sale of our securities. There can be no assurance that
additional investments or financings will be available to us as needed to
support the development and deployment of Cymedix products. Failure to obtain
such capital on a timely basis could result in lost business opportunities, the
sale of the Cymedix business at a distressed price or the financial failure of
our company. See "The Company-Recent Developments."

Medix has frequent cash flow problems that often cause us to be delinquent in
making payments to our vendors and other creditors, which may cause damage to
our business relationships and cause us to incur additional expenses in the
payment of late charges and penalties.

During 2001, from time to time, its lack of cash flow caused Medix to delay
payment of its obligations as they came due in the ordinary of its business. In
some cases, Medix was delinquent in making payments by the legally required due
dates. At its four office locations, Medix had 48 monthly payments due in the
aggregate during 2001. 31 of those payments were late. 23 of those payments were
paid within 30 days of their due date, and 8 of those payments were between 31
and 60 days late. All payments plus any required penalties were ultimately paid
in full during 2001. Medix had 33 Federal withholding and other payment due
dates. Of those, 17 due dates were missed. The resulting delinquencies ranged
from 1 to 58 days, before the required payments were made. Medix pays the
resulting penalties as they are billed. Medix had state withholding obligations
in five states, Colorado, California, Georgia, New Jersey and New York. Medix
was late in making 45 of 97 withholding payments in those five states. The
length of these delinquencies ranged from 3 to 60 days, before the required
payments were made. Medix pays the resulting penalties as they are billed. Medix
was late in making its deposits of its employees' 401(k) contributions 21 of 26
times during 2001. The length of these delinquencies ranged from 10 to 60 days,
All of the above late payments were made before the end of 2001.

We have granted a security interest in all of our intellectual property assets
to secure a financing, which means if we default in our obligations to the
lender, we may loss these assets in the foreclosure process.

The use of secured borrowings increases the risk of loss of the assets used to
secure the borrowing. If an event of default occurs under the security
agreement, the lender will be able to foreclose on the assets used to secure the
borrowing and sell those assets to the highest bidder. In addition, it is
generally believed that foreclosure sales, which are "distress sales", will not
maximize the proceeds that are paid for the assets being sold. The loan we
entered into is secured by the grant of a security interest in all Medix's
intellectual property, including its patent, copyrights and trademarks. While
Medix can cure a payment default by the forced conversion of the loan into its
common stock, a bankruptcy or similar event of default will trigger the
foreclosure provision of the security agreement. See "The Company-Recent
Developments."

We are a development stage company, which means our products and services have
not yet proved themselves commercially viable and therefore our future is
uncertain.

o We develop software for Internet-based communications and information
management for medical service providers, through our wholly-owned
subsidiary, Cymedix Lynx Corporation. Our Cymedix(R) products are
still in the testing and deployment stage and have not generated any
significant revenue to date. We are funding our operations through the
sale of our securities. Our ability to continue to sell our securities
can not be assured.

o We are still in the process of gaining experience in marketing
software products, providing software support services, evaluating
demand for products, financing a software business and dealing with
government regulation of software 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.
We believe our structure of multiple offices serves our customers
well, but it does present an additional challenge in building our
corporate culture and operating structure.

We rely on healthcare professionals for the quality of the information that is
transmitted through our interconnectivity systems, and we may not be paid for
our services by third-party payors if that quality does not meet certain
standards.

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 professional 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 quality may result in the payor refusing to
pay Medix for its services.

Our market is rapidly changing and the introduction of software services and
products into that market has been slow, which may cause us to be unable to
develop a profitable market for our services and products.

o As a developer of software products, we will be required to anticipate
and adapt to evolving industry standards and new technological
developments. The market for our software products 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. The establishment of standards is largely a
function of user acceptance. Therefore, such standards are subject to
change. Our future success, if any, will depend in part upon our
ability to enhance existing products, to respond effectively to
technology changes, and to introduce new products and technologies
that are functional and meet the evolving needs of our clients in the
healthcare information systems market.

o The introduction of software products in our market has been slow due
to the large number of small practitioners who are resistant to change
and the costs associated with change, particularly in a period of
rising pressure to reduce costs in the market. We are currently
devoting significant resources toward the development of products.
There can be no assurance that we will successfully complete the
development of these products in a timely fashion or that our current
or future products will satisfy the needs of the healthcare
information systems market. Further, there can be no assurance that
products or technologies developed by others will not adversely affect
our competitive position or render our products or technologies
noncompetitive or obsolete.

As a provider of medical software products and services, we may become liable
for product liability claims beyond the levels of our insurance that could have
a materially adverse impact on our financial condition.

Certain of our products provide applications that relate to patient medical
histories and treatment plans. Any failure by our products to provide 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. The limits of that coverage is
$2,000,000 in the aggregate and $1,000,000 per occurrence. 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 or business.
Even unsuccessful claims could result in the expenditure of funds in litigation,
as well as diversion of management time and resources.

Our industry, the healthcare industry, continually experiences rapid change and
uncertainty that could result in issues for our business planning or operations
that could severely impact on our ability to become profitable.

The healthcare and medical services industry in the United States is in a period
of rapid change and uncertainty. Governmental programs have been proposed, and
some adopted, from time to time, to reform various aspects of the U.S.
healthcare delivery system. Some of these programs contain proposals to increase
government involvement in healthcare, lower reimbursement rates and otherwise
change the operating environment for our customers. Particularly, the Health
Insurance Portability and Accountability Act of 1996, and the regulations that
are being promulgated thereunder, are causing the healthcare industry to change
its procedures and incur substantial cost in doing so. 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.

We rely on intellectual property rights, such as patents, copyrights, trademarks
and unprotected propriety technology in our business operations and to create
value in our company, however, protecting intellectual property frequently
requires litigation and close legal monitoring and may adversely impact our
ability to become profitable.

o Our wholly-owned subsidiary, Cymedix Lynx Corporation, has been
granted certain patent rights, trademarks and copyrights relating to
its software business. These patents and copyrights have been assigned
by our subsidiary to the parent company, Medix. The patent rights and
intellectual property legal issues for software programs, such as the
Cymedix(R) 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 the 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. Further, 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. While we have no prospects for marketing or operations in
foreign countries at this time, future opportunities for growth in
foreign markets, for that reason, may be limited. We cannot give any
assurance that the scope of the rights that we have been granted are
broad enough to fully protect our Cymedix software from infringement.

o Litigation or regulatory proceedings may be necessary to protect our
intellectual property rights, such as the scope of our patent. In
fact, the computer software industry in general is characterized by
substantial litigation. 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.

o We also rely upon unprotected 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. We will use our best efforts to protect such information
and techniques, however, no assurance can be given that such efforts
will be successful. The failure to protect our intellectual property
could cause us to lose substantial revenues and to fail to reach its
financial potential over the long term.

Because our business is highly competitive and there are many competitors who
are financially stronger than we are, we are at risk of being outperformed in
staffing, marketing, product development and customer services, which could
severely limit our ability to become profitable.

o eHealth Services. Competition can be expected to emerge from
established healthcare information vendors and established or new
Internet related vendors. The most likely competitors are companies
with a focus on clinical information systems and enterprises with an
Internet commerce or electronic network focus. Many of these
competitors will have access to substantially greater amounts of
capital resources than we have access to, for the financing of
technical, manufacturing and marketing efforts. Frequently, these
competitors will have affiliations with major medical product or
software development companies, who may assist in the financing of
such competitor's product development. We will seek to raise capital
to develop Cymedix products in a timely manner, however, so long as
our operations remain underfunded, as they now are, we will be at a
competitive disadvantage.

o Software Development Personnel. The success of the development of our
Cymedix software 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 Cymedix products operate. 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 or business.

We have relied on the private placement exemption to raise substantial amounts
of capital, and could suffer substantial losses if that exemption was determined
not to have been properly relied upon.

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 institute such suit, Medix could face severe financial
demands that could material and adversely affect our financial position.

The impact of shares of our common stock that may become available for sale in
the future may result in the market price of our stock being depressed.

As of June 25, 2002, we had 62,923,624 shares of common stock outstanding. As of
that date, approximately 29,676,164 shares were issuable upon the exercise of
outstanding options, warrants or other rights, and the conversion of preferred
stock. 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 $0.19 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 the common stock, and the exercise of
any options, warrants or other rights may dilute the book value per share of the
common stock and put downward pressure on the price of the 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 terms more favorable than could be obtained through the exercise or
conversion of such securities. See also the impact of our equity line of credit
financing discussed in the following paragraphs.

Because of dilution to our common stock outstanding from our equity line of
credit , the market price of our stock may be depressed.

o In connection with our equity line of credit financing, we have
registered 9,500,000 shares with the SEC for sale by the providers of
the financing, of which 4,796,763 shares remain available for issuance
as of June 18, 2002. See "Equity Line Financing."

o The shares are issued to the equity line providers at a floating price
based on a discount to market price of the common stock. As a result,
the lower the stock price around the time the equity line is drawn on,
the more common shares the holder gets.

o To the extent that the equity line providers sells our common stock,
the market price of the common stock may decrease due to the
additional shares in the market. This could allow the providers to
receive a greater amount of the stock in future draws on our equity
line of credit, the sale of which could further depress the stock
price.

o The significant downward pressure on the price of our common stock as
the equity line providers receive common stock in connection with
draws on our equity line of credit and then sell material amounts of
the stock, could encourage short sales, which could place further
downward pressure on the price of our common stock.

o The issuance of the common stock in connection with our equity line of
credit may result in substantial dilution to the common stock holdings
of other holders of our common stock.

o Any agreement to sell, or convert debt or equity securities into,
common stock at a future date and at a price based on the then current
market price will provide an incentive to the investor or third
parties to sell the common stock short to decrease the price and
increase the number of shares they may receive in a future purchase,
whether directly from us or in the market. Our equity line of credit
is priced at a discount to the market price at the time of a future
draw.

Because of dilution to our common stock outstanding from the conversion feature
of our $1,000,000 convertible promissory note, the market price of our stock may
be depressed.

o The conversion price of our $1,000,000 promissory note may be equal to
80% of the then-current market value of Medix common stock if Medix is
unable to obtain a written commitment for additional equity
investments of the aggregate of $4,000,000 by the close of business on
September 30, 2002. As a result, the lower the stock price around the
time the the conversion is made, the more common shares the holder of
the convertible promissory note gets. See "The Company - Recent
Developments."

o The significant downward pressure on the price of our common stock at
the time the conversion price is set, could encourage short sales,
which could place further downward pressure on the price of our common
stock.

o The issuance of the common stock in connection with the conversion may
result in substantial dilution to the common stock holdings of other
holders of our common stock.

o Any agreement to sell, or convert debt or equity securities into,
common stock at a future date and at a price based on the then current
market price will provide an incentive to the investor or third
parties to sell the common stock short to decrease the price and
increase the number of shares they may receive in a future purchase,
whether directly from us or in the market. The convertible promissory
note may be priced at a discount to market at the time the conversion
price is set, September 30, 2002.

Because of market volatility in our stock price, investors may find that they
have a loss position if emergency sales become necessary.

Historically, our common stock has experienced significant price
fluctuations. This has been caused by one or more of the following factors:

o unfavorable announcements or press releases relating to the technology
sector;

o regulatory, legislative or other developments affecting our company or
the health care industry generally;

o conversion of our preferred stock and convertible debt into common
stock at conversion rates based on current market prices or below of
our common stock and exercise of options and warrants at below current
market prices;

o sales by those financing our company through an equity line of credit
or convertible securities which have been registered with the SEC and
may be sold into the public market immediately upon receipt; and

o market conditions specific to technology and internet companies, the
health care 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 health care 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.

The application of the "penny stock" rules to our common stock may depress the
market for our stock.

Trading of our common stock may be subject to the penny stock rules under the
Securities Exchange Act of 1934, as amended, unless an exemption from such rules
is available. Broker-dealers making a market in our common stock will be
required to provide disclosure to their customers regarding the risks associated
with our common stock, the suitability for the customer of an investment in our
common stock, the duties of the broker-dealer to the customer and information
regarding bid and ask prices for our common stock, and the amount and
description of any compensation the broker-dealer would receive in connection
with a transaction in our common stock. The application of these rules may
result in fewer market makers making a market of our common stock and further
restrict the liquidity of our common stock.

We do not anticipate paying any cash dividends on our common stock in the
foreseeable future.

We have not had earnings, but if earnings were available, it is our general
policy to retain any earnings for use in our operation. Therefore, we do not
anticipate paying any cash dividends on our common stock in the foreseeable
future. 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, plans for expansion, as well as other factors
that the Board of Directors deems relevant. We anticipate that our future
financing agreements will prohibit the payment of common stock dividends without
the prior written consent of those providers.

FORWARD-LOOKING STATEMENTS

This Prospectus and the documents incorporated by reference into this Prospectus
contain forward-looking statements, which mean that they relate to events or
transactions that have not yet occurred, our expectations or estimates for
Medix's 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
following 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.

THE COMPANY

General

Medix Resources, Inc., a Colorado corporation, sold its supplemental staffing
business, which operated under the tradenames "National Care Resources" and
"TherAmerica" on February 19, 2000, and now principally develops software for
Internet-based communications and information management for medical service
providers, through its wholly-owned subsidiary, Cymedix Lynx Corporation.

We acquired the Cymedix business in January of 1998. Cymedix has developed
Internet-based communications and information management product, which we began
marketing to medical professionals in select markets nationwide. Growth of the
medical information management marketplace is being driven by the need to share
significant amounts of clinical and patient information between physicians,
their outpatient service providers, hospitals, insurance companies and managed
care organizations. This market is one of the fastest-growing sectors in
healthcare today, commanding a projected two-thirds of health care capital
investments. The Cymedix(R) software contains patented elements that can be used
to develop secure medical communications products that make use of the Internet.
Using the Cymedix software, medical professionals can order, prescribe and
access medical information from participating insurance companies and managed
care organizations, as well as from any participating outpatient service
provider, such as a laboratory, radiology center, pharmacy or hospital. We will
provide the software at minimal charges to physicians and clinics, and will
collect user fees whenever these products are used to provide services on the
Internet. The products' relational database technology will provide physicians
with a permanent, ongoing record of each patient's name, address, insurance or
managed care affiliation, referral status, medical history, personalized notes
and an audit trail of past encounters. Physicians will be able to electronically
order medical procedures, receive and store test results, check patient
eligibility, make medical referrals, request authorizations, and report
financial and encounter information in a cost-effective, secure and timely
manner.

Our principal executive office is located at The Graybar Building, 420 Lexington
Ave., Suite 1830 New York, NY 10170, and its telephone number is (212) 697-2509.
Our principal administrative office is at 7100 East Belleview Ave., Greenwood
Village, CO 80111, and its telephone number is (303) 741-2045. We also have
offices in California and Georgia.

Recent Developments

The introduction of our next generation of proprietary, point-of-care products,
Cymedix(R)III, is proceeding with our six active sponsors. Our improved suite of
software products is based upon a robust and device-neutral architecture that
leverages proven workstation, handheld and wireless technologies and is being
installed and tested for Pharmacy, Laboratory and PlanConnect services. We
continue to be in the development and testing phase with each of our active
contracts, and therefore receive no revenue. Revenue will begin when we reach
certain milestones under each contract and we enter the production phase of the
contract. The marketing and development of our Cymedix suite of software
products is our sole business at this time, and a substantial portion of our net
operating loss is due to such efforts. We are funding such expenses as well as
our administrative expenses through the sale of our securities. We have no
significant debt financing available to us.

During 2001, our Automated Design Concepts Division (ADC) ceased operations in
connection with our cost reduction program, which had been brought on by our
inability to raise budgeted capital. It was determined that the business of the
subsidiary was not part of our core business operations and therefore did not
justify our continued financial support. In connection with the termination of
our subsidiaries operations we took a write-off of goodwill in the amount of
$443,000. We also determined that our license of proprietary software from
Zirmed.com had no value to us and had no more than a nominal market value. As a
result, we wrote-off the unamortized value of the related intangible asset,
which was $668,000. We had acquired ADC in early 2000 from an officer and
director of the Company for cash and stock valued at $474,000. He resigned his
positions with us on March 2, 2001.

During 2001, net cash used in operating activities was approximately $5,397,000.
During the year, we raised approximately $5,205,000 from the exercise of options
and warrants, and the issuance of common stock, net of offering expenses, and
debt. Since December 31, 2001 to May 31, 2002, we have used approximately
$2,071,000 in our operating activities, and raised approximately $3,468,000 from
the exercise of options and warrants, and the issuance of common stock and
warrants, net of offering expenses, and debt. We had approximately $651,000 in
cash as of May 31, 2002 with a net working capital deficit of approximately
$856,000. We have been delinquent, from time to time, in the payment of our
current obligations, including payments of withholding and other tax
obligations. We continue in discussions and negotiations with institutional
sources regarding debt and equity financings to fund our operations and to
permit us to remove the "going concern" qualification in our auditor's report in
connection with the audit of our annual financial statements. There can be no
assurance that additional investments or financings will be available to us as
needed. Failure to obtain such capital on a timely basis could result in lost
business opportunities, the sale of the Cymedix business at a distressed price
or our financial failure.

We executed an Amended and Restated Common Stock Purchase Warrant with WellPoint
Pharmacy Management, dated February 18, 2002, to restructure our obligations to
issue warrants to WellPoint. Under that Warrant, we are obligated to issue up to
7,000,000 shares of our common stock at exercise prices of $0.30 per share for
3,000,000, $0.50 per share for 3,000,000 shares and $1.75 per share for
1,000,000 shares, if various performance related vesting requirements are
satisfied by WellPoint. Currently, WellPoint has satisfied certain of these
requirements giving WellPoint the right to purchase 1,850,000 shares of our
common stock at $0.30 per share have been earned by WellPoint. WellPoint's
rights to purchase our shares under the Warrant expire on September 8, 2004. The
Warrant grants to WellPoint certain registration rights to require us to
register with the SEC the shares issued to WellPoint for resale to the public.
In the Warrant, WellPoint has agreed to restrict sales to the public of these
shares during the first year after they have been issued to 200,000 shares per
month and 100,000 shares in any five trading days. The Warrant contains
anti-dilution provisions providing that the number of shares that may be
purchased by WellPoint under the Warrant my be adjusted in certain
circumstances.

We entered into a secured convertible loan agreement with WellPoint, dated
February 19, 2002, pursuant to which we borrowed $1,000,000 from WellPoint
Health Networks Inc. The loan becomes payable on February 19, 2003, if not
converted into our common stock. The loan earns annual interest at a floating
rate of 300 basis points over prime, as it is adjusted from time to time, which
is also payable at maturity and may be converted into common stock. Conversion
into common stock is at the option of either WellPoint or Medix at a contingent
conversion price. The conversion price will be either (i) at the price at which
additional shares are sold to other private placement investors if Medix obtains
written commitments for at least an additional $4,000,000 of equity by the close
of business on September 30, 2002, from persons not affiliates of WellPoint, and
if such sales are closed by the maturity date of the loan, or (ii) at a price
equal to 80% of the then-current Fair Market Value (as defined below) if Medix
is unable to obtain a written commitment for the additional equity investment by
the close of business on September 30, 2002 or close the sales by the maturity
date. For this purpose, "Fair Market Value" shall be the average closing price
of Medix common stock for the twenty trading days ending on the day prior to the
day of the conversion. The loan is secured by the grant of a security interest
in all Medix's intellectual property, including its patent, copyrights and
trademarks. While Medix can cure a default in the repayment of the loan at the
fixed maturity date by the forced conversion of the loan into its common stock,
a cross default, breach of representation or warranty, and bankruptcy or similar
event of default will trigger the foreclosure provision of the security
agreement.

On May 15, 2002, we completed a private placement of our securities for
$1,381,000. In connection therewith, we are issuing 3,452,500 shares of common
stock and warrants to purchase a equal number of shares of common stock at the
exercise price of $0.50 per share.

EQUITY LINE FINANCING

Agreement

We have entered into an Equity Line of Credit Agreement with Cornell Capital
Partners, L.P. ("Cornell"), and Dutchess Private Equities Fund, L.P.
("Dutchess"), dated as of June 12, 2001. Under the agreement, the two providers
have committed to advance to us funds in an amount of up to $10,000,000, as
requested by us, over a 24-month period in return for common stock issued by us
to the providers. As of June 18, 2002, we had received $2,681,099 in advances,
from which offering expenses of $198,511 were paid, under the financing, and had
issued to the providers 4,703,237 shares of our common stock relating to the
advances and an additional 542,847 shares to their affiliates as fees for
arranging the equity line facility. The shares issued pursuant to the equity
line advances to date have been priced from $0.41 to $0.77 per share.

The amount that may be advanced at any time under the equity line is limited as
follows (which conditions may be waived by the providers):

o There must be thirteen stock market trading days between any two of
our requests for advances.

o We can only request an advance if the volume weighted average price of
the common stock, as reported by Bloomberg L.P. for the day before our
request, is equal to or greater than the volume weighted average price
as reported by Bloomberg L.P. for the 22 trading days before we make a
request.

o We will not be able to receive an advance amount that is greater than
175% of the average daily volume of our common stock over the 40
trading days prior to our advance request multiplied by the purchase
price (calculated as provided in the next sentence).

The purchase price of our common stock issued in each advance will be equal to
91% of the three lowest daily volume weighted average prices during the 22
trading days before we make a request for an advance.

Registration Rights

We have agreed to maintain an effective registration statement for the sale of
the shares issued to the providers of our equity line financing, as described
above. If, at any time, the number of shares available under a registration
statement is insufficient to cover all securities issued to the providers, we
have agreed to use our best efforts to cause an amendment or new registration
statement containing those shares to be declared effective. Our agreement with
the providers of our equity line financing contains mutual indemnities against
loses, costs and expenses arising out of the violation of by the other party of
state and Federal securities laws. Insofar as indemnification for liabilities
under the Securities Act of 1933, as amended, may be permitted under such
agreement, we have been informed that in the opinion of the U.S. Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. Our agreements as to
registration rights are only with the providers of our equity line financing and
we have no obligations to assist or indemnify any other holder of the shares
sold by them or to any underwriter designated by such holders.

Currently, 4,796,763 shares are registered for sale by the providers in
connection with future draws. If additional shares are to be issued under the
equity line of credit, they would have to be registered with the SEC and listed
on the AMEX. Listing of additional shares on the AMEX would require a vote of
our shareholders under the AMEX rules the limit the number of shares that can be
issued in below market transactions.

Compensation

We are selling our shares to the providers of our equity line financing at a 9%
discount from the market price as described above. Yorkville Advisors's
Management, LLC, an affiliate of Cornell, has been and will be paid by us 2.31%
of each amount advanced to us under the equity line financing. Dutchess Advisors
Limited, an affiliate of Dutchess, has been and will be paid by us 4.69% of each
amount advanced to us under the equity line financing. Through June 18, 2002, we
have paid an aggregate of $175,511 in such fees. Furthermore, for their
assistance in arranging our equity line facility, we have issued to Yorkville
Advisors and Dutchess Advisors 179,140 shares and 363,707 shares, respectively,
of our common stock, which was also registered for sale under the
above-described registration statement. In addition, through June 18, 2002, we
have paid $15,000, in the aggregate, to counsels to Cornell and Dutchess, and
paid $8,000 for escrow fees and other expenses in connection with this
transaction.

Potential Dilution

We have made 17 draws under the equity line since August 15, 2001, received
$2,681,099 in advances and issued 4,703,237 shares of common stock to the equity
line providers. The issue price of that stock has been between $0.41 and $0.77
during a period when the market prices on the draw dates has ranged from $0.52
to $0.94.

The following table is intended to indicate the future impact of our equity line
on the number of shares of our common stock outstanding, assuming the draw down
of all the remaining availability under the equity line, all at one time, for
hypothetical variations in the price of our common stock. The numbers in the
table are hypothetical and it is highly unlikely that we will draw down all of
the amount available under the equity line at one time. As of June 18, 2002, the
closing price of our common stock on the AMEX was $0.38 per share, and the
number of shares of our common stock outstanding was 62,923,624 shares.

Under our equity line of credit, the purchase price of our common stock issued
to the equity line providers is contractually set at 91% of the average of the
three lowest daily volume weighted average prices ("VWAPs") during the 22
trading days before a draw is made. On June 18, 2002, the average of the three
lowest VWAPs for the prior 22-trading day period was $0.283. On that date, we
had $7,318,901 available to be drawn down under the equity line. In the
following table we present the number of shares that could be issued, and the
issue price thereof, in six different hypothetical situations, if the average of
the three lowest VWAPs for the pricing of the shares to be issued in an equity
line draw down were 25%, 50% and 75% above and below that average on June 18,
2002.

Assumed average Price to equity Number of shares Shares shown in the
of three lowest line providers that could be issued prior column are
VWAPs --------- if remaining availiabity percentage of the
----- was drawn at the price in assumed resulting
the prior column outstanding shares
---------------- ------------------
-------------------- ---------------- --------------------------- ------------------
$0.0708 $0.0644 113,638,267 64.36%
-------------------- ---------------- --------------------------- ------------------
$0.1416 $0.1288 56,819,134 47.45%
-------------------- ---------------- --------------------------- ------------------
$0.2123 $0.1932 37,879,422 37.58%
-------------------- ---------------- --------------------------- ------------------
$0.3539 $0.3220 22,727,653 26.54%
-------------------- ---------------- --------------------------- ------------------
$0.4247 $0.3864 18,939,711 23.14%
-------------------- ---------------- --------------------------- ------------------
$0.4954 $0.4508 16,234,038 20.51%
-------------------- ---------------- --------------------------- ------------------

USE OF PROCEEDS

The net proceeds from the sale of shares will be received by the selling
shareholders. Medix will not receive any of the proceeds from any sale of the
shares by the selling shareholders. However, Medix will receive the proceeds
from the exercise of warrants and options to purchase the shares to be sold
hereunder. If all related warrants and options are exercised, Medix would
receive proceeds of $234,625. However, rights to exchange the equity value of
some warrants and options in the exercise of other warrants and options could
reduce the amount received in cash upon the exercise the warrants and options
referred to in this Prospectus. Any such proceeds will be used as working
capital.

SELLING SHAREHOLDERS

The table below sets forth information as of June 25, 2002, with respect to the
selling shareholders, including names, holdings of shares of common stock prior
to the offering of the shares, the number of shares being offered for each
account, and the number and percentage of shares of common stock to be owned by
the selling shareholders immediately following the sale of the shares, assuming
all of the offered shares are sold. We have been informed that the voting and
investment control of Nais Corporation is exercised by its sole shareholder,
Mrs. Pauline Winter, and its board of directors, Mrs. Winter, Mr. Eric
Ehrenhaus, Dr. Michael Ehrenhaus and Ms. Fawn Spirgel.

Shares of
Common Stock
Beneficially Shares of Shares of Common Stock to be
Name Owned Before Common Stock Beneficially Owned After the
---- the Offering Being Offered Offering
------------ ------------- --------
Number Percentage
------ ----------
Michael I. Ruxin 243,750 243,750 0 0
Nais Corporation 250,000 90,000 160,000 *
Lyle B. Stewart 200,000 75,000 125,000 *
Fritz & Miller, P.C. 15,035 9,568 5,467 *
Shapiro Forman Allen & Miller LLP 30,800 19,600 11,200 *
Guli R. Rajani 30,555 19,444 11,111 *
Nicole S. Rajani 30,555 19,444 11,111 *
Ajay G. Rajani 30,555 19,444 11,111 *
------ ------
Total 831,250 496,250
---------
*less than 1%

Relationship Between Medix and the Selling Shareholders

The selling shareholders have or will acquire the shares of common stock
indicated above upon the exercise of warrants or options issued for services
rendered or in settlement of litigation. None of the persons listed above are
affiliates or controlled by affiliates of the Company. We have a separate
contractual obligation to file this registration with certain of the selling
shareholders.

All of the other selling shareholders, other than Mr. Stewart, received their
shares as a result of the settlement of three litigations with us, Michael I.
Ruxin v. Cymedix Lynx Corporation, and Medix Resources, Inc., Guli R. Rajani v.
Medix Resources, Inc., and Yecheskel Munk and the Nais Corporation v. Medix
Resources, Inc. f/k/a International Nursing Services, Inc. They were all
discussed in our 2000 Form 10-KSB. In the first two cases the settlement
involved issuing warrants to the plaintiffs giving them the right to purchase
243,750 and 137,500 shares, respectively, of our common stock at the exercise
price of $0.50 per share. In the third litigation, the plaintiff Nais
Corporation was issued 90,000 shares of our common stock in the negotiated
settlement of the matter. In each settlement the case against us was dismissed
with prejudice. Mr. Rajani has directed a portion of the warrants he received in
the settlement to his wife and son and to the counsel who represented him in his
litigation against us. 50,000 shares covered by Mr. Rajani's settlement warrants
were registered in an earlier registration statement declared effective by the
SEC.

Mr. Stewart, our outside legal counsel, has received a compensatory grant of
options under our 1999 Stock Option Plan covering the shares registered in his
name. They are exercisable at $0.92 per share.

DESCRIPTION OF SECURITIES

Our authorized capital consists of 100,000,000 shares of common stock, par value
$.001 per share, and 2,500,000 shares of preferred stock. As of June 25, 2002,
we had outstanding 62,923,624 shares of common stock, 1 share of 1996 Preferred
Stock, 50 shares of 1999 Series B Preferred Stock and 100 shares of 1999 Series
C Preferred Stock. As of such date, our common stock was held of record by
approximately 400 persons and beneficially owned by approximately 9,000 persons.

Common Stock

Each share of common stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the election
of directors. Currently, the Board of Directors consists of six directors, who
serve for staggered terms of three years, with at least two directors elected at
every annual meeting. 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 common stock. In the event of liquidation,
dissolution or winding up of Medix, holders of the common stock will be entitled
to receive on a pro rata basis all assets of Medix remaining after satisfaction
of all liabilities and preferences of the outstanding preferred stock. The
outstanding shares of common stock and the shares of common stock issuable upon
conversion or exercise of derivative securities are or will be, as the case may
be, duly and validly issued, fully paid and non-assessable.

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 the our common
stock, at telephone number (303) 262-0600.

PLAN OF DISTRIBUTION

The selling shareholders 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 exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders 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;

o broker-dealers may agree with the selling shareholders 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 shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in securities of the Company or
derivatives of Company securities and may sell or deliver shares in connection
with these trades. The selling shareholders may pledge their shares to their
brokers under the margin provisions of customer agreements. If a selling
shareholder defaults on a margin loan, the broker may, from time to time, offer
and sell the pledged shares. The selling shareholders have advised the Company
that they 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 shareholders.

Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

Selling shareholders 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.

The Company is required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to
certain of the selling shareholders. Otherwise, all discounts, commissions or
fees incurred in connection with the sale of the common stock offered hereby
will be paid by the selling shareholders. The Company has agreed to indemnify
certain selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.

Upon the Company being notified by a selling shareholder 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 shareholder 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.

The Company has advised the selling shareholders 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

Article 109 of the Colorado Business Corporation Act generally provides
that Medix may indemnify its directors, officers, employees and agents against
liabilities in any action, suit or proceeding whether civil, criminal,
administrative or investigative and whether formal or informal (a "Proceeding"),
by reason of being or having been a director, officer, employee, fiduciary or
agent of Medix, if such person acted in good faith and reasonably believed that
his conduct, in his official capacity, was in the best interests of Medix (or,
with respect to employee benefit plans, was in the best interests of the
participants of the plan), and in all other cases that his conduct was at least
not opposed to Medix's best interests. In the case of a criminal proceeding, the
director, officer, employee or agent must have had no reasonable cause to
believe that his conduct was unlawful. Under Colorado Law, Medix may not
indemnify a director, officer, employee or agent in connection with a proceeding
by or in the right of Medix if the director is adjudged liable to Medix, or in a
proceeding in which the directors, officer employee or agent is adjudged liable
for an improper personal benefit.

Our Articles of Incorporation provide that we shall indemnify its
directors, and officers, employees and agents to the extent and in the manner
permitted by the provisions of the laws of the State of Colorado, as amended
from time to time, subject to any permissible expansion or limitation of such
indemnification, as may be set forth in any shareholders' or directors'
resolution or by contract.

Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to directors, officers
or persons controlling Medix pursuant to the foregoing provisions, Medix has
been informed that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.

AVAILABLE INFORMATION

We are a reporting company and file our annual, quarterly and current
reports, proxy material and other information with the SEC. Reports, proxy
statements and other information concerning Medix filed with the Commission may
be inspected at the Public Reference Room maintained by the Commission at its
office, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material
can be obtained from the Public Reference Room of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The public may obtain
information about the Public reference room in Washington, D.C. by calling the
SEC at 1-800-SEC-0330. Our SEC filings are also available at the SEC's Website
at "http://www.sec.gov".

We have filed a 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 SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to the documents filed with the SEC that contains that
information. The information incorporated by reference is an important part of
this Prospectus, and it is important that you review it before making your
investment decision. We hereby incorporate by reference the documents listed
below:

(a) a copy of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, filed with the SEC on April 1, 2002;

(b) a copy of our Form 10-K/A, filed with the SEC on April 5, 2002;

(d) a copy of our Annual Report on Form 10-K/A for the fiscal year ended
December 31, 2001, as amended, and as filed with the SEC on May 24,
2002;

(e) a copy of our Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2002, as filed with the SEC on May 15, 2002;

(f) copies of the our Forms 8-K, filed with the SEC on January 18, March
4, and March 25, April 12, May 24, June 4, June 14 (2 Forms 8-K),
and June 26, 2002.

We are delivering with this Prospectus copies of the most recent Form
10-K/A and Form 10-Q referred to above. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus, or
made herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superceded,
to constitute a part of this Prospectus.

All other documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to
the date of this Prospectus and prior to the termination of the Offering
pursuant to this Prospectus shall be deemed to be incorporated by reference and
to be a part of this Prospectus from the date of filing of such documents.

We will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus is delivered, upon oral or written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, other than the exhibits to such documents (unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Investor Relations
Department, Medix Resources, Inc., 7100 E. Belleview Avenue, Suite 301,
Greenwood Village, Colorado 80111, telephone (303) 741-2045.

LEGAL MATTERS

The validity of the shares offered hereby is being passed upon for us by
Lyle B. Stewart, P.C. Lyle B. Stewart, P.C. has been granted options to purchase
25,000 shares of Medix common stock at an exercise price of $0.26 per share, and
Mr. Stewart, individually, has been granted options to purchase 100,000 and
75,000 shares of Medix common stock at exercise prices of $3.38 and $0.92 per
share, respectively.

EXPERTS

The consolidated financial statements of Medix as of December 31, 2001, and
for each of the three years in the period ended December 31, 2001 appearing in
our 2001 Form 10-K have been audited by Ehrhardt Keefe Steiner & Hottman P.C.,
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.

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.

---------------------------------------------------------------
SEC Registration Fee................................$242
---------------------------------------------------------------
Blue Sky Filing Fees and Expenses.....................0*
---------------------------------------------------------------
Accountants' Fees and Expenses.....................1,000*
---------------------------------------------------------------
Legal Fees and Expenses...........................40,000*
---------------------------------------------------------------
Miscellaneous................................... 0*
----------
---------------------------------------------------------------
TOTAL............................................$41,242*
----------------------------------------------------------------

--------------------
* Estimated, subject to change.

The Company will bear all of the above expenses of the registration of the Shares.

Item 15. Indemnification of Directors and Officers.

See "INDEMNIFICATION OF OFFICERS AND DIRECTORS" in the Prospectus.

Item 16. Exhibits.

Exhibit
Number Description

5.1 Opinion of Lyle B. Stewart, Esq.*

10.1 Participation Agreement, dated as of April 2, 2001, between Medix and
Kaiser Foundation Health Plan of Georgia, Inc. (Portions of this
Exhibit have been omitted pursuant to a request for confidential
treatment that has been granted by the SEC)*

10.2 Agreement, dated as of October 18, 2001, between Medix and Merck-Medco
Managed Care, L.L.C. (Portions of this Exhibit have been omitted
pursuant to a request for confidential treatment that has been granted
by the SEC)*

10.3 Vendor Services Agreement, dated as of September 28, 2001, between
Medix and Express Scripts, Inc. (Portions of this Exhibit have been
omitted pursuant to a request for confidential treatment that has been
granted by the SEC)*

10.4 Binding Letter of Intent for Pilot and Production Programs, dated
September 8, 1999, between Medix, Cymedix and Professional Claims
Services, Inc. (d/b/a WellPoint Pharmacy Management) (Portions of this
Exhibit have been omitted pursuant to a request for confidential
treatment that has been granted by the SEC)*

10.5 Pilot Agreement, dated as of December 28, 1999, between Cymedix and
Professional Claims Services, Inc. (d/b/a WellPoint Pharmacy
Management) (Portions of this Exhibit have been omitted pursuant to a
request for confidential treatment that has been granted by the SEC)*

10.6 Agreement For Internet Medical Communications Network, dated March 2,
2000, between Cymedix and Loyola University Medical Center. (Portions
of this Exhibit have been omitted pursuant to a request for
confidential treatment that has been granted by the SEC)*

10.7 Amended and Restated Common Stock Purchase Warrant, as amended
February 18, 2002, issued to Professional Claims Services, Inc (d/b/a
WellPoint Pharmacy Management)*

10.8 Securities Purchase Agreement, dated February 19, 2002, between Medix
and WellPoint Health Networks Inc.*

10.9 General Security Agreement, dated February 19, 2002, among Medix,
Cymedix and WellPoint Health Networks Inc.*

23.1 Consent of Ehrhardt Keefe Steiner & Hottman P.C.

23.2 Consent of Lyle B. Stewart, Esq. (included in Exhibit 5.1)*

24.1 Power of Attorney*

-----------------
* Previously Filed

Item 17. Undertakings.

A. The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:

(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Act");

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.

(iii)To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;

provided, however, that paragraphs (A)(1)(i) and
(A)(1)(ii) do not apply if the Registration Statement is on
Form S-3, Form S-8 or Form F-3, and the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission (the
"Commission") by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are incorporated by
reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.

B. Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the 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 Act and will be
governed by the final adjudication of such issue.

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-2 and has duly caused this Amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in New York, New York on June 24, 2002.

MEDIX RESOURCES, INC.

By /s/John R. Prufeta
--------------------
John R. Prufeta,
President and CEO

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/John R. Prufeta* President, Chief Executive Officer and June 24, 2002
--------------------- Director (Principal Executive Officer)
John R. Prufeta

/s/Patricia A. Minicucci Executive Vice President, Acting Chief June 24, 2002
------------------------- Financial Officer ( Acting Principal
Patricia A. Minicucci Financial and Accounting Officer)

/s/John T. Lane* Director June 24, 2002
------------------
John T. Lane

/s/David B. Skinner* Director June 24, 2002
--------------------
David B. Skinner

/s/Samuel H. Havens* Director June 24, 2002
----------------------
Samuel H. Havens

/s/Joan E. Herman* Director June 24, 2002
-------------------
Joan E. Herman

/s/Patrick W. Jeffries* Director June 24, 2002
-----------------------
Patrick W. Jeffries

/s/Guy L. Scalzi* Director June 24, 2002
-----------------
Guy L. Scalzi

*John R. Prufeta, by signing his name hereto, does sign this document on behalf
of himself and each of Ms. Herman and Messrs. Lane, Havens, Skinner, Scalzi and
Jeffries in the capacities indicated immediately above, pursuant to powers of
attorney duly executed by each such person and filed with the Securities and
Exchange Commission.

/s/John R. Prufeta
------------------
John R. Prufeta

EXHIBIT INDEX