A.D.A.M.

Prospectus Summary

PROSPECTUS SUMMARY

Business

A.D.A.M. serves healthcare organizations, medical professionals, health-interested consumers and students as a leading publisher of visually engaging health and medical information products. A.D.A.M. products are used for learning about health, wellness, disease, clinical treatments, alternative medicine, nutrition, anatomy and general medical reference in both the healthcare and education markets. A.D.A.M. products contain physician-reviewed text, in-house developed medical graphics and multimedia interactivity to create health information solutions that offer a unique "visual learning" experience. Today, we employ a growing range of media, including Internet, software, CD-ROM, television and print, to deploy our proprietary content assets and products.

Our proprietary content library, more than 16 years in the making, includes:

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a physician reviewed Health Encyclopedia that covers approximately 3,800 diseases and medical conditions;


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approximately 40,000 medical illustrations that have been drawn and compiled by A.D.A.M.;


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an extensive library of 3D models developed from the Visible Human Project;


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thousands of web-enabled animations depicting disease states and other medical conditions and topics, many of which are broadcast-quality;


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interactive tools;


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unique technology for viewing the human body's anatomy; and


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an advanced content management system we are implementing.

For the past several years, consumer demand for accurate, credible health information has been increasing at a rapid pace. As the Internet has emerged as a significant global communications medium, it has fueled the consumer's ability to better understand, manage and play a more active role in their personal health. According to a recent Harris Interactive survey, in 2001 nearly 100 million Americans were going online in search of health information.

Results from other recent surveys showed that large portions of these "health seekers" believe that the ability to find credible health information on the Internet empowers them to make more informed personal health choices. In the Harris survey for example, 70% of the survey respondents took additional healthcare actions by making a personal treatment decision, urging a family member or friend to visit a doctor, or changing their lifestyle habits.

The rapid growth of the Internet as a tool for information research and the increasing appetite consumers have for health information has resulted in a proliferation of web sites offering health-related content. While this proliferation has had a positive effect for consumers, it has also raised concerns over the credibility and accuracy of the information being made available. The combined effect of consumers having access to large amounts of information that may or may not be credible is further taxing healthcare providers as they struggle to answer patient's questions or spend additional time redirecting them to other information sources.

The trend for healthcare organizations today is to use health information in two ways:

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to increase the number of encounters with their organization by providing content that connects a consumer or patient directly to a facility's services or products; and,


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to improve the efficiency of the provider-patient relationship by providing relevant, credible information.

We have begun the implementation of an advanced content management system that will enable us to take full advantage of our diverse content assets. The new system is intended to enable us to produce new content products with minimal development costs, access assets more effectively, and deliver products to customers in a more efficient manner. The new system will also streamline our ability to update and maintain our products by providing more real-time update tools to our internal and external reviewers. In the twelve months ended December 31, 2001, we signed a license agreement with Interwoven, a leading content infrastructure company, which provides us with key technology components for this new system. We expect to complete implementation of the new system by the end of the second quarter of 2002.

We believe we are well positioned in the market as the demand for health information grows and as content becomes an increasingly important driver for business growth within the healthcare industry. We have put in place rigorous editorial review and quality assurance processes to insure the accuracy of our products. In addition, we have undertaken technological initiatives to enable our products to be used in broader applications within the healthcare industry such as wireless healthcare delivery, electronic medical records and other point-of-care applications.

We were incorporated in 1990 as A.D.A.M. Software, Inc. We changed our name to adam.com, Inc. in 1999 and to A.D.A.M., Inc. in 2001. We are headquartered at 1600 River Edge Parkway, Suite 800, Atlanta, Georgia and maintain an office in Newton, Massachusetts. Our telephone number is (770) 980-0888.

The Offering

On May 22, 2002, we entered into a common stock purchase agreement with Fusion Capital Fund II, LLC, pursuant to which Fusion Capital has agreed to purchase, on each trading day, $15,000 of our common stock up to an aggregate, under certain conditions, of $12.0 million over a 40 month period. Pursuant to the agreement, A.D.A.M. can control the size and timing of any sales of our common stock to Fusion Capital. For example, we may suspend purchases by Fusion Capital at any time, decrease and increase the daily purchase amount at any time and decrease and increase the minimum purchase price at any time. Fusion Capital, the selling shareholder under this prospectus, is offering for sale up to 2,660,000 shares of our common stock. As of May 22, 2002, there were 7,724,284 shares outstanding, including the 160,000 shares that we have issued to Fusion Capital as a commitment fee for its purchase obligations, but excluding 2,500,000 shares offered by Fusion Capital pursuant to this prospectus which have not yet been issued. The number of shares offered by this prospectus represents 34.4% of the total common stock outstanding as of May 22, 2002. The number of shares ultimately offered for sale by Fusion Capital is dependent upon the number of shares purchased by Fusion Capital under the common stock purchase agreement.

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