SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 2000
PROXYMED, INC
(Exact name of registrant as specified in its charter)
FLORIDA 000-22052 65-0202059
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
2555 Davie Road
Suite 110
Ft. Lauderdale, Florida 33317
(Address of principal executive offices)
954-473-1001
(Registrant's telephone number, including area code)
Item 5. Other Events.
Effective June 16, 2000, ProxyMed, Inc. (the "Company"), satisfied its
obligation under the terms of the Redemption and Exchange Agreement (the
"Redemption Agreement") for the Company's Series B Convertible Preferred Stock
(the "Series B Preferred Stock"), to raise at least $4,000,000 on or prior to
June 17, 2000, through the closing of a private placement of convertible notes
and warrants which generated net proceeds of $5,275,316 to the Company.
Proceeds will be used to comply with the Company's obligation to redeem
2,500 shares of the Series B Preferred Stock, which is required to occur by June
19, 2000. The balance of the proceeds will be used for working capital.
Pursuant to the terms of the Redemption Agreement, the Company is also
required to redeem an additional 2,500 shares of the Series B Preferred Stock on
each of August 1, 2000 and August 31, 2000, and an additional 1,500 shares of
the Series B Preferred Stock on September 29, 2000, plus a 16.5% premium and
accrued dividends.
The Company will be required to obtain at least $14 million of
additional financing in order to fund its operations for the next six months, to
comply with the terms of the Redemption Agreement and to repay amounts owed to
Transamerica Business Credit Corporation ("Transamerica") under the Company's
existing credit facility with Transamerica. Transamerica has advised the Company
that it does not intend to renew the Credit Facility. At this time, the Company
does not have another working capital credit facility available to it and that
there can be no assurance the Company will be able to obtain a credit facility
on acceptable terms, or at all. The Redemption Agreement provides that the
Company must raise additional funds of $5,000,000 by July 31, 2000, and another
$4,000,000 by August 30, 2000. There can be no assurance that such funding will
be available to the Company, or if available, that it will be available on
acceptable terms. If adequate funds are not available, the Company will not be
able to meet the conditions set forth in the Redemption Agreement and the
holders of the Series B Preferred Stock would be entitled to exercise their
conversion and other rights under the terms of the designations for the Series B
Preferred Stock and the Redemption Agreement. Additionally, the Company may be
forced to further curtail its business activities operations and reduce its
discretionary spending to such levels that continuing the Company's operations
may not be feasible. The Company's ability to raise additional funds may be
adversely affected if, among other things, the Company is unable to meet the
terms and conditions set forth in the Redemption Agreement or if the Company
does not continue to improve its operating performance and achieve increased
market acceptance of its products and services. The failure to obtain at least
$20,000,000 of financing on acceptable terms will have a material adverse effect
on the Company's financial condition and its ability to fund continuing
operations.
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The Company's capital requirements will depend on many factors,
including the problems, delays, expenses and complications frequently
encountered by other eHealth companies; the costs associated with developing
improved products and services in response to technological changes; the costs
associated with any marketing or other arrangements; changes in economic,
regulatory, or competitive conditions of the Company's business; and the cost of
retaining management personnel.
The foregoing summary of certain aspects of the Redemption Agreement is
not intended to be complete and is qualified in its entirety by the full text of
such document which is attached as an exhibit to the Company's Report on Form
8-K filed with the Securities and Exchange Commission on May 8, 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Press Release issued on June 16, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROXYMED, INC.
By: /S/ FRANK M. PUTHOFF
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Name: Frank M. Puthoff
Title: Executive Vice President, Chief Legal
Officer, and Secretary
Dated: June 16, 2000
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release issued on June 16, 2000.