Electronically Transmitted to the Securities and Exchange Commission on
May 9, 2001
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PROXYMED, INC.
(Exact name of Registrant as specified in its charter)
Florida 65-0202059
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Michael K. Hoover
Chief Executive Officer
ProxyMed, Inc.
2555 Davie Road, Suite 110 2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317 Fort Lauderdale, Florida 33317
(954) 473-1001 (954) 473-1001
(Name, address, including zip code, (Name, address, including zip code,
and telephone number, including area code, and telephone number, including area code,
of registrant's principal executive offices) of agent of service)
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Copies of communications to:
Frank M. Puthoff, Esq. Steven Sonberg, Esq.
Executive Vice President and Holland & Knight LLP
Chief Legal Officer 701 Brickell Avenue
ProxyMed, Inc. Suite 3000
2555 Davie Road, Suite 110 Miami, Florida 33131
Fort Lauderdale, Florida 33317 (305) 374-8500
(954) 473-1001
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Approximate date of commencement of proposed sale to the public:
From time to time as described in the Prospectus after the effective date
of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
=============================================================================================================
Amount To Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Be Offering Price Aggregate Offering Registration
Securities to be Registered Registered(1) Per Share(2) Price(2) Fee
- -------------------------------------------------------------------------------------------------------------
Common Stock ($.001 par value) 3,282,423 $1.04 $3,413,720 $853.43
=============================================================================================================
(1) The number of shares of Common Stock offered pursuant to this Registration
Statement are 3,282,423 shares, representing the number of shares of Common
Stock issuable upon the exchange of certain warrants issued to investors
pursuant to certain Exchange Agreements dated April 24, 2001.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) of the Securities Act and based on the average of the high and
low bid price for the Common Stock on May 4, 2001 as reported by the Nasdaq
National Market System.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
================================================================================
The information in this Prospectus is not complete and may be changed.
The selling shareholders may not sell the securities offered by this Prospectus
pursuant to this Prospectus until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 9, 2001
PROSPECTUS
Shares
[LOGO OMITTED]
Common Stock
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This Prospectus relates to up to 3,282,423 shares of Common Stock of
ProxyMed, Inc. which may be sold from time to time by the selling shareholders
listed on page 13, or their transferees, pledgees, donees or successors.
The selling shareholders may sell all or any portion of their shares of
Common Stock in one or more transactions through ordinary brokerage
transactions, in private, negotiated transactions, or through any other means
described in the section entitled "Plan of Distribution" beginning on page 19.
The selling shareholders are selling these shares for their own
accounts. We will not receive any of the proceeds from the sale of the shares by
the selling shareholders, but will pay all registration expenses. The selling
shareholders will pay all selling expenses, including all underwriting discounts
and selling commissions.
Our Common Stock is traded on the Nasdaq National Market under the
symbol "PILL".
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INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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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 MAY __, 2001
TABLE OF CONTENTS
Page
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WHERE YOU CAN FIND MORE INFORMATION 2
FORWARD-LOOKING INFORMATION 3
ABOUT PROXYMED 4
RISK FACTORS 5
USE OF PROCEEDS 12
SELLING SHAREHOLDERS 13
DESCRIPTION OF SECURITIES 13
PLAN OF DISTRIBUTION 19
LEGAL OPINION 22
EXPERTS 22
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the public reference facilities of the
SEC in Washington, D.C., Chicago, Illinois and New York, New York. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference into this Prospectus the following documents listed
below and any future filings that we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(1) Our Annual Report on Form 10-K for the year ended December 31,
2000 filed on March 28, 2001;
(2) Our Current Report on Form 8-K filed on April 26, 2001;
(3) Our Current Report on Form 8-K filed on May 7, 2001, and
(4) The description of our Common Stock contained in our
Registration Statement on Form 8-A declared effective on
August 5, 1993, including any other amendment or report filed
for the purpose of updating such information.
2
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
ProxyMed, Inc.
2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317
Attn: Corporate Secretary
Telephone: (954) 473-1001, ext. 300
You should rely only on information incorporated by reference or provided in
this Prospectus and any prospectus supplement. No one (including any salesman or
broker) is authorized to provide oral or written information about this offering
that is not included in this Prospectus.
FORWARD-LOOKING INFORMATION
This Prospectus, including the information incorporated by reference,
contains forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve substantial risks and uncertainties. These forward-looking
statements can generally be identified as such because the context of the
statement includes words such as the company "believes" "anticipates",
"expects", "intends", or other words of similar import. Similarly, statements
that describe the Company's future plans, objectives and goals are also
forward-looking statements. Further, certain forward-looking statements are
based upon assumptions of future events, which may not prove to be accurate. The
Company's actual results, performance or achievements could differ materially
from those expressed or implied in these forward-looking statements as a result
of certain factors, including those risk factors set forth on page 5 and
elsewhere in this Prospectus, certain of which may be detailed from time to time
in our periodic reports filed with the SEC.
3
ABOUT PROXYMED
ProxyMed is an electronic healthcare transaction processing services
company providing connectivity services and related value-add products to
physicians, payers, pharmacies, medical laboratories, and other healthcare
providers and suppliers. Our electronic transaction processing services support
a broad range of both financial and clinical transactions. To facilitate these
services, we operate ProxyNet(r), our secure, proprietary national electronic
information network, which provides physicians and other primary care providers
with direct connectivity to one of the industry's largest list of payers, the
largest list of chain and independent pharmacies and the largest list of
clinical laboratories. Our products and services are provided from our three
operating facilities located in Fort Lauderdale, Florida; Santa Ana, California;
and New Albany, Indiana.
The healthcare industry generates billions of financial and clinical
transactions each year, including new prescription orders, refill
authorizations, laboratory orders and results, radiology orders and results,
medical insurance claims, insurance eligibility inquiries, encounter
notifications, and referral requests and authorizations. We believe that the
healthcare industry lags behind many other transaction-intensive industries,
such as the travel, securities and banking industries, in the number of
transactions processed electronically, with the vast majority of healthcare
transactions being performed manually and on paper. For physicians, payers, labs
and pharmacies to meet the financial and clinical demands of an evolving managed
care system, we believe that participants in the healthcare system will need to
process many of these types of transactions electronically. Due to the number of
participants, lack of standards and complexity of establishing reliable and
secure communication networks, the healthcare industry needs companies such as
ProxyMed, with its secure, proprietary systems, to facilitate the processing of
these transactions.
* * *
Our principal executive offices are located at 2555 Davie Road, Suite
110, Fort Lauderdale, Florida 33317-7424, and our telephone number is (954)
473-1001.
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RISK FACTORS
In addition to the other information in this Prospectus or incorporated
in this Prospectus by reference, you should consider carefully the following
factors in evaluating ProxyMed and our business before purchasing the Common
Stock offered by this Prospectus.
We have incurred losses in the past and we expect losses in the future which
could have a detrimental effect on the market price of our stock
We have incurred substantial losses, including losses of $48,052,000,
$21,856,000, and $11,788,000 for the fiscal years ended December 31, 2000, 1999,
and 1998, respectively. As of December 31, 2000, we had an accumulated deficit
of $90,425,000. We can give no assurance that we will ever achieve profitable
operations. This could have a detrimental effect on the market price of our
stock.
We have important business relationships with other companies to market and sell
some of our clinical products and services which have not resulted in
significant sales yet and if these companies are unsuccessful, we will need to
add this emphasis internally, which may divert our efforts and resources from
others projects
For the marketing and sale of some of our clinical products and
services, we entered into important business relationships with physician office
management information system vendors and electronic medical record vendors and
through other agreements. These important business relationships, which have
required and may continue to require significant commitments of effort and
resources, have yet to generate substantial recurring revenue, and we cannot
assure that they will ever generate substantial recurring revenue. Most of these
relationships are on a non-exclusive basis, and we cannot assure that our
electronic commerce partners and other strategic partners, most of whom have
significantly greater financial and marketing resources than we do, will not
develop and market products and services in competition with us in the future or
will not otherwise discontinue their relationship with us. Also, our
arrangements with some of our partners involve negotiated payments to the
partners based on percentages of revenues generated by the partners. If the
payments prove to be too high, we may be unable to realize acceptable margins,
but if the payments prove to be too low, the partners may not be motivated to
produce a sufficient volume of revenues. The success of our important business
relationships will depend in part upon our partners' own competitive, marketing
and strategic considerations, including the relative advantages of alternative
products being developed and marketed by such partners. If any such partners are
unsuccessful in marketing our products, we will need to place added emphasis on
these aspects of our business internally, which may divert our planned efforts
and resources from other projects.
5
Our laboratory communication devices may be replaced with web-based technology
for lab results delivery, and we may not be successful in converting our
customers to our own internet portal, proxyMed.com, which would adversely impact
our revenues
A key element of our Laboratory Services business strategy is to market
our laboratory results reporting devices and related services, and our web-based
solutions, directly to independent and hospital-based medical laboratories. As
the Internet becomes a more acceptable method of transmitting laboratory orders
and reporting results because of the efficiencies and savings believed to be
available, we are leveraging our 20-plus years of goodwill and reputation for
quality of products and superior service to migrate our customers over to our
own Internet portal, proxyMed.com. We expect others to develop similar web-based
solutions and compete aggressively in an attempt to capture our large customer
base. We have no assurances that we will be able to retain or continue to grow
our customer base. Further, even as to the continuing sales of our laboratory
communication devices, we are unable to control many of the factors that
influence our customers' buying decisions, including our customers' budgets and
procedures for approving expenditures, and the changing political, economic and
regulatory influences which affect the purchasing practices and operation of
healthcare organizations.
The acceptance of electronic transaction processing in the healthcare industry
is still in its early stages; thus, the future of our business is uncertain
Our strategy anticipates that electronic processing of healthcare
transactions, including transactions involving clinical as well as financial
information, will become more widespread and that providers and third-party
payers increasingly will use electronic transaction processing networks for the
processing and transmission of data. Electronic transmission of healthcare
transactions (and, in particular, the use of the Internet to transmit them) is
still developing, and complexities in the nature and types of transactions which
must be processed have hindered, to some degree, the development and acceptance
of electronic transaction processing in this industry. We cannot assure that
continued conversion from paper-based transaction processing to electronic
transaction processing in the healthcare industry, using proprietary physician
management systems or the Internet, will occur.
Our clinical transaction products and services have yet to be tested on a large
scale and could fail under a heavy customer load
The quality of our clinical transaction products and services is
important to our business. Although we have completed the development of most of
our electronic transaction processing network, which we believe efficiently
performs the principal functions for which it has been designed, our clinical
transaction products and services and the network are currently being utilized
only by a limited number of customers for these transactions. We cannot assure
that, upon widespread commercial use of our clinical transaction products and
services, they will satisfactorily perform all of the functions for which we
have designed them or that unanticipated technical or other errors
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will not occur which would result in increased costs or material delays. Any of
these errors could delay our plans, result in harmful publicity or cause us to
incur substantial remedial costs.
Since an error by any party in the process of prescribing drugs and filling
prescriptions could result in substantial injury to a patient, our liability
insurance may not be adequate in a catastrophic situation
Our business exposes us to potential liability risks that are
unavoidably part of being in the healthcare electronic transaction processing
industry. Many of our products and services relate to prescribing and refilling
of drugs and the transmission of medical laboratory results, an error by any
party in the process could result in substantial injury to a patient. As a
result, our liability risks are significant.
We cannot assure that our insurance will be sufficient to cover
potential claims arising out of our current or proposed operations, or that our
present level of coverage will be available in the future at a reasonable cost.
A partially or completely uninsured claim against us, if successful and of
sufficient magnitude, would have significant adverse financial consequences. Our
inability to obtain insurance of the type and in the amounts we require could
generally impair our ability to market our products and services.
Our products employ proprietary information and technology which may infringe on
the intellectual property rights of third parties
In large part, our success is dependent on our proprietary information
and technology. We rely on a combination of contract, copyright, trademark and
trade secret laws and other measures to protect our proprietary information and
technology. We have no patents. We have copyright registrations for twelve of
our software products. As part of our confidentiality procedures, we generally
enter into nondisclosure agreements with our employees, distributors and
customers, and limit access to and distribution of our software, databases,
documentation and other proprietary information. We cannot assure that the steps
taken by us will be adequate to deter misappropriation of our proprietary rights
or that third parties will not independently develop substantially similar
products, services and technology. Although we believe our products, services
and technology do not infringe on any proprietary rights of others, as the
number of software products available in the market increases and the functions
of those products further overlap, we and other software and internet developers
may become increasingly subject to infringement claims. These claims, with or
without merit, could result in costly litigation or might require us to enter
into royalty or licensing agreements, which may not be available on terms
acceptable to us.
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We depend on connections to insurance companies and other payers, and if we lose
these connections, our service offerings would be limited and less desirable to
healthcare participants
Our business is enhanced by the substantial number of payers, such as
insurance companies, Medicare and Medicaid agencies to which we have electronic
connections. These connections may either be made directly or through a
clearinghouse. We have attempted to enter into suitable contractual
relationships to ensure long-term payer connectivity; however, we cannot assure
that we will be able to maintain our links with all these payers. In addition,
we cannot assure that we will be able to develop new connections, either
directly or through clearinghouses, on satisfactory terms. Lastly, some
third-party payers provide systems directly to healthcare providers, bypassing
us and other third-party processors. Our failure to maintain existing
connections with payers and clearinghouses or to develop new connections as
circumstances warrant, or to increase the utilization of direct links between
providers and payers, could cause our electronic transaction processing system
to be less desirable to healthcare participants, which would slow down or reduce
the number of transactions that we process and for which we are paid.
Evolving industry standards and rapid technological changes could result in our
products becoming obsolete or no longer in demand
Rapidly changing technology, evolving industry standards and the
frequent introduction of new and enhanced internet-based services characterize
the market for our products and services. Our success will depend upon our
ability to enhance our existing services, introduce new products and services on
a timely and cost-effective basis to meet evolving customer requirements,
achieve market acceptance for new products or services and respond to emerging
industry standards and other technological changes. We cannot assure that we
will be able to respond effectively to technological changes or new industry
standards. Moreover, we cannot assure that other companies will not develop
competitive products or services, or that any such competitive products or
services will not cause our products and services to become obsolete or no
longer in demand.
If electronic transaction processing penetrates the healthcare industry, we may
face pressure to reduce our prices which potentially may cause us to no longer
be competitive
If electronic transaction processing extensively penetrates the
healthcare market or becomes highly standardized, it is possible that
competition among electronic transaction processors will focus increasingly on
pricing. This competition may put intense pressure on us to reduce our pricing
in order to retain market share. If we are unable to reduce our costs
sufficiently to offset declines in our prices, or if we are unable to introduce
new, innovative service offerings with higher prices, we may not be competitive.
8
Computer network systems like ours could suffer security and privacy breaches
that could harm our customers and us
We currently operate servers and maintain connectivity from multiple
facilities. Despite our implementation of network security measures, such as
limiting physical and network access to routers, our infrastructure may be
vulnerable to computer viruses, break-ins and similar disruptive problems caused
by customers or other users. Computer viruses, break-ins or other security
problems could lead to interruption, delays or cessation in service to our
customers. These problems could also potentially jeopardize the security of
confidential information stored in the computer systems of our customers, which
may deter potential customers from doing business with us and give rise to
possible liability to users whose security or privacy has been infringed. The
security and privacy concerns of existing and potential customers may inhibit
the growth of the healthcare information services industry in general, and our
customer base and business in particular. A significant security breach could
result in loss of customers, damage to our reputation, direct damages, costs of
repair and detection and other unplanned expenses.
We depend on uninterrupted computer access for our customers; any prolonged
interruptions in our operations could cause our customers to seek alternative
providers of our services
Our success is dependent on our ability to deliver high-quality,
uninterrupted computer networking and hosting, requiring us to protect our
computer equipment and the information stored in servers against damage by fire,
natural disaster, power loss, telecommunications failures, unauthorized
intrusion and other catastrophic events. We plan to develop additional back-up
site capability and a program to manage technology to reduce risks in the event
of a disaster, including periodic "back-ups" of our computer programs and data.
Any damage or failure resulting in prolonged interruptions in our operations,
such as the current California rolling blackouts, could cause our customers to
seek alternative providers of our services. In particular, a system failure, if
prolonged, could result in reduced revenues, loss of customers and damage to our
reputation, any of which could cause our business to suffer. While we carry
property and business interruption insurance to cover operations, the coverage
may not be adequate to compensate us for losses that may occur.
We may not be able to retain key personnel or replace them if they leave
Our success is largely dependent on the personal efforts of Michael K.
Hoover, our Chairman of the Board and Chief Executive Officer. Although we have
entered into employment agreements with Mr. Hoover and other senior executives,
the loss of any of their services could cause our business to suffer. Our
success is also dependent upon our ability to hire and retain qualified
operations, development and other personnel. Competition for qualified personnel
in the healthcare information services industry is intense, and we cannot assure
that we will be able to hire or retain the personnel necessary for our planned
operations.
9
We may issue additional shares which could adversely affect the market price of
our common stock
Certain events over which you have no control could result in the
issuance of additional shares of our Common Stock or preferred stock, which
would dilute your ownership percentage in ProxyMed and could adversely affect
the market price of our Common Stock. We may issue additional shares of Common
Stock or preferred stock for many reasons including:
o to raise additional capital or finance acquisitions;
o upon the exercise or conversion or an exchange of outstanding
options, warrants and shares of convertible preferred stock;
or
o in lieu of cash payment of dividends.
In addition, the number of shares of Common Stock that we are required
to issue upon conversion or exercise, as the case may be, of Series B Preferred
Stock, Series C Preferred Stock and many of our outstanding options and warrants
may increase if certain anti-dilution events occur (such as, certain issuances
of Common Stock, options and convertible securities).
Proposed healthcare legislation and changes to existing laws could cause an
erosion of our current competitive strengths
Our customers are subject to extensive and frequently changing federal
and state healthcare laws and regulations. Political, economic and regulatory
influences are subjecting the healthcare industry in the United States to
fundamental change. Potential reform legislation may include:
o mandated basic healthcare benefits,
o controls on healthcare spending through limitations on the
growth of private health insurance premiums and Medicare and
Medicaid reimbursement,
o the creation of large insurance purchasing groups,
o fundamental changes to the healthcare delivery system,
o FTC enforcement actions of existing privacy laws relating to
the internet,
o federal and state privacy and confidentiality statutes,
regulations rules and guidelines covering medical records and
patient information.
The federal Health Insurance Portability and Accountability Act of
1996, known as HIPAA for short, mandates the use of standard transactions,
standard identifiers, security and other provisions for electronic claims
transactions. HIPAA specifically designates clearinghouses (including us and
other financial network operators) as the
10
compliance facilitators for healthcare providers and payers. On August 17, 2000,
the U.S. Department of Health and Human Services published final regulations to
govern eight of the most common electronic transactions involving healthcare
information. We must comply by April 14, 2003. We believe that we will be in
compliance by that date or sooner, and we expect, but have no assurances that
our business partners or customers who may also be covered by these regulations
will also be in compliance by that date. Due to mandated standards, however,
there is a possibility that it will be easier for competitors to offer
electronic transaction processing services similar to ours, which would make our
competitive strength of accepting financial transactions in multiple formats
less of a differentiating factor for our customers.
We anticipate Congress and state legislatures will continue to review
and assess alternative healthcare delivery systems and payment methods, as well
as internet and healthcare privacy legislation, and that public debate of these
issues will likely continue in the future. Due to uncertainties as to these
reform initiatives and their enactment and implementation, we cannot predict
which, if any, of such reform proposals will be adopted, when they may be
adopted or what impact they may have on us.
Because we are smaller and have fewer financial resources than many of our
competitors, we may not be able to successfully compete in the very competitive
healthcare electronic transaction processing industry
We face competition from many healthcare information systems companies
and other technology companies. Many of our competitors are significantly larger
and have greater financial resources than we do and have established reputations
for success in implementing healthcare electronic transaction processing
systems. Other companies have targeted this industry for growth, including the
development of new technologies utilizing internet-based systems. We cannot
assure that we will be able to compete successfully with these companies or that
these or other competitors will not commercialize products, services or
technologies that render our products, services or technologies obsolete or less
marketable.
Investors should not anticipate receiving cash dividends on our Common Stock
We currently anticipate retaining all of our future earnings, if any,
for use in the operation and expansion of our business, and do not plan to pay
any cash dividends on shares of our Common Stock in the foreseeable future. The
provisions of our Series B Preferred Stock prohibit the payment of dividends on
our Common Stock unless we get the consent of the holders of two-thirds of the
Series B Preferred Stock. Potential investors who anticipate a need for
dividends should not invest in our Common Stock.
Our Common Stock price has fluctuated considerably and may not appreciate in
value
The market price of shares of our Common Stock has fluctuated
substantially in recent years and is likely to fluctuate significantly from its
current level. During the
11
period from January 1, 2001 through May 4, 2001, our Common Stock closing price
has ranged from a high of $1.50 per share to a low of $0.94 per share. In 1998,
our Common Stock closing price ranged from a low of $5.25 per share to a high of
$16.50 per share, during 1999, our Common Stock closing price ranged from a low
of $9.50 per share to a high of $19.25 per share, and during 2000, our Common
Stock closing price ranged from a low of $0.81 per share to a high of $11.13 per
share. Future announcements concerning our financial performance, conversion of
shares of the Series B or the Series C Preferred Stock into Common Stock,
warrant and option exercises, year-end selling for tax losses, the announcement
of strategic business relationships, the introduction of new products, services
or technologies or changes in product pricing policies by us or our competitors
or changes in earnings estimates by analysts, among other factors, could cause
the market price of our Common Stock to fluctuate substantially. Stock markets
have experienced extreme price and volume volatility in the last year. This
volatility has had a substantial effect on the market prices of securities of
many public companies, including those in the eHealth sector, for reasons
frequently unrelated to the operating performance of the specific companies.
These broad market fluctuations may also cause declines in the market price of
our Common Stock. Investors seeking short-term liquidity should be aware that we
cannot assure that the stock price will appreciate in value or, as noted above,
that cash dividends will be paid.
We may be required to delist our shares from Nasdaq if certain events occur
The Nasdaq Stock Market has certain rules that must be met in order for
a listed company to maintain its listing on the National Market System. We may
be required to delist from Nasdaq if the bid price of our Common Stock closes
below one dollar ($1.00) for thirty consecutive trading days. In such event,
trading, if any, in the Common Stock may then continue to be conducted on the
over-the-counter market in what are commonly referred to as the "pink sheets",
or on the OTC Electronic Bulletin Board. As a result of trading in the
over-the-counter market, an investor may find it more difficult to dispose of,
or to obtain accurate quotations as to the market value of, the Common Stock. In
addition, trading in the Common Stock would likely decrease substantially, and
the price of the Common Stock may decline.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of Common
Stock by any of the selling shareholders.
We estimate that our expenses in connection with the filing of this
registration statement will be approximately $35,000.
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SELLING SHAREHOLDERS
General
The shares of Common Stock being offered by the selling shareholders
were issued in exchange for certain warrants. We are registering the shares in
order to permit the selling shareholders to offer these shares for resale from
time to time. None of the selling shareholders has had any material relationship
with us within the past three years.
Common Shares
Beneficially Common Shares
Owned Prior Offered By This Common Shares Percentage
Name of Selling Shareholder to Offering Prospectus After Offering of Class
- --------------------------- ------------- --------------- -------------- ----------
Fisher Capital Ltd.(1) 626,186 626,186 - *
Leonardo, L.P. 1,262,473 1,262,473 - *
Royal Bank of Canada 1,009,976 1,009,976 - *
Wingate Capital Ltd.(1) 383,788 383,788 - *
* Less than 1%
(1) Citadel Limited Partnership is the trading manager of each of Fisher
Capital Ltd. and Wingate Capital Ltd. and consequently has voting control
and investment discretion over securities held by them. Kenneth C. Griffin
indirectly controls Citadel Limited Partnership. The ownership for Fisher
Capital Ltd. does not include the ownership information for Wingate Capital
Ltd. and the ownership information for Wingate Capital Ltd. does not
include the ownership information for Fisher Capital Ltd. Citadel Limited
Partnership, Kenneth C. Griffin, Fisher Capital Ltd. and Wingate Capital
Ltd. each disclaims beneficial ownership of the securities held by the
others.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 100,000,000 shares of Common
Stock, par value $.001 per share, and 2,000,000 shares of preferred stock, par
value $.01 per share, of which 15,000 shares have been designated Series B
Preferred Stock and 300,000 shares have been designated Series C Preferred
Stock. At May 4, 2001, 24,757,988 shares of Common Stock were issued and
outstanding, 110 shares of Series B Preferred Stock were issued and outstanding
and 253,265 shares of Series C Preferred Stock were issued and outstanding.
The 24,757,988 shares of Common Stock outstanding on May 4, 2001, do
not include the 121,002 shares of Common Stock issuable as of May 4, 2001, upon
conversion of Series B Preferred Stock, the 25,326,500 shares of Common Stock
issuable upon conversion of the Series C Preferred Stock, the 24,146,174 shares
of Common Stock issuable upon exercise of currently outstanding warrants, and
11,833,161 shares of Common Stock reserved for issuance upon exercise of
currently outstanding stock options.
The descriptions below of the terms of Common Stock, Series B Preferred
Stock, Series C Preferred Stock and the related warrants are summaries of the
material terms only and do not purport to be complete. Such descriptions are
subject to and qualified by the actual agreements relating to Series B Preferred
Stock, Series C Preferred Stock, such warrants, our amended Articles of
Incorporation and By-laws, all of which have been
13
filed with the SEC and are incorporated into this Prospectus by reference, and
by applicable law.
Common Stock
The issued and outstanding shares of Common Stock, including the shares
being offered by this Prospectus, are validly issued, fully paid and
non-assessable. The holders of outstanding shares of Common Stock are entitled
to receive dividends out of assets legally available for them at such times and
in such amounts as the Board of Directors may from time to time determine. We
have not paid any dividends and do not expect to pay cash dividends on our
Common Stock in the foreseeable future.
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, have one vote per share in all matters to be voted upon
by the shareholders. Cumulative voting in the election of directors is not
allowed, which means that the holders of more than 50% of the outstanding shares
can elect all the directors if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any directors.
The shares have no preemptive, subscription, conversion or redemption
rights. Upon liquidation, dissolution or winding-up of ProxyMed, the holders of
Common Stock are entitled to receive pro rata the assets of ProxyMed which are
legally available for distribution to shareholders.
Preferred Stock
In addition to Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock, our Board of Directors has the authority to issue
1,746,625 additional shares of preferred stock in one or more series and to fix
the designation, relative powers, preferences and rights and qualifications,
limitations or restrictions of all shares of each such series, including
dividend rates, conversion rights, voting rights, redemption and sinking fund
provisions, liquidation preferences and the number of shares constituting each
such series, without any further vote or action by the shareholders.
The issuance of preferred stock could decrease the amount of earnings
and assets available for distribution to holders of Common Stock or adversely
affect the rights and powers, including voting rights, of the holders of Common
Stock and could have the effect of delaying, deferring or preventing a change in
control of ProxyMed without further action by the shareholders.
Series B Preferred Stock
Pursuant to the terms of a Securities Purchase Agreement dated December
23, 1999, we issued 15,000 shares of Series B Preferred Stock in a private
placement to institutional investors. The shares of Series B Preferred Stock are
non-voting and carry a cumulative dividend at a rate of 6% per annum, payable
quarterly or upon conversion or
14
redemption, which may be paid in cash or Common Stock, at our option, subject to
certain conditions. The shares of Series B Preferred Stock mature on December
23, 2001, subject to extension in certain circumstances, at which time the
Series B Preferred Stock will be redeemed or converted at our option, subject to
certain conditions. The conversion price of Series B Preferred Stock at maturity
is 95% of the average of the closing trade price on the Nasdaq National Market
of the Common Stock for the 30 consecutive trading days immediately preceding
December 23, 2001.
In connection with the sale of Series B Preferred Stock, we issued
warrants (the "Old Warrants") to purchase up to 800,000 shares of Common Stock,
subject to adjustment in certain events. The original exercise price of the Old
Warrants was $12.05 per share, subject to adjustment in certain events. The Old
Warrants expire on December 23, 2002. As of May 4, 2001, Old Warrants to
purchase 1,285,337 shares of Common Stock at $1.00 per share were outstanding.
In addition, in order to obtain the consent of Transamerica Business Credit
Corporation to the sale of Series B Preferred Stock, a warrant to purchase
25,000 shares of Common Stock at an original exercise price of $11.62 per share
was issued to Transamerica (the "Transamerica Warrant") on substantially the
same terms as the Old Warrants. The exercise price and number of shares of
Common Stock which may be purchased upon exercise of such warrants continue to
be subject to further adjustment upon the occurrence of certain dilution events
including, without limitation, certain issuances of Common Stock, stock options
or convertible securities or certain corporate transactions such as stock
splits, mergers or asset sales.
Series B Preferred Stock converts into Common Stock at a floating rate
based on the market price of the Common Stock. The terms of Series B Preferred
Stock provide that the holders could not exercise their rights to convert Series
B Preferred Stock prior to December 23, 2000, unless certain triggering events
occurred. One such triggering event occurred as of May 1, 2000 when the closing
price of the Common Stock had been below $4.21 for 10 trading days, thus causing
the restriction on conversions to cease to be in effect.
In order to attempt to prevent the conversion of all of the shares of
Series B Preferred Stock and the resulting significant dilution to the holders
of Common Stock, we engaged in negotiations with the original holders of Series
B Preferred Stock to restructure certain terms of Series B Preferred Stock.
Effective May 4, 2000, we entered into a Redemption and Exchange Agreement (the
"Redemption Agreement") with holders of 13,000 shares of Series B Preferred
Stock. Under the terms of the Redemption Agreement, we have redeemed 13,000
shares of Series B Preferred Stock at 116.5% of the Conversion Amount (as
defined in the Articles of Amendment to our Articles of Incorporation creating
Series B Preferred Stock (the "Series B Articles of Amendment")). As of May 4,
2001, the original holder of the other 2,000 shares of Series B Preferred Stock
had converted 1,890 shares of Series B Preferred Stock into an aggregate of
1,621,936 shares of Common Stock and 110 shares of Series B Preferred Stock
continue to be held by such holder.
The Redemption Agreement also provided for the exchange of 693,333 of
the Old Warrants issued to the holders of Series B Preferred Stock subject to
the Redemption Agreement for warrants (the "Exchanged Warrants") with an
exercise price of $1.50 per
15
share. In addition, such holders have received, in the aggregate, 650,000
additional warrants (the "New Warrants") at an exercise price of $1.50 per
share. The exercise price and number of shares of Common Stock which could have
been purchased upon exercise of the Exchanged Warrants and the New Warrants were
subject to adjustment upon the occurrence of certain dilution events which
occurred 180 days after the date of issuance of such warrants including, without
limitation, certain issuances of Common Stock, stock options or convertible
securities or certain corporate transactions such as stock splits, mergers or
asset sales or other events. In February 2001, as a result of certain
anti-dilution provisions, the 693,333 Exchanged Warrants were reset into
3,425,493 warrants with a new exercise price of $1.25883 per share.
Effective April 24, 2001, the Company entered into Exchange Agreements
(the "Exchange Agreements") with the former holders of $13,000,000 of its
$15,000,000 Series B Preferred Stock. The Company and such holders had
previously entered into the Redemption Agreement.
Under the Exchange Agreements, the Company cancelled and exchanged all
outstanding Exchanged Warrants and New Warrants for an aggregate of 3,282,423
shares of Common Stock. Additionally, under terms of the Exchange Agreement, the
Company is required to register certain of these shares under Form S-3 by May 9,
2001. For this transaction, the Company expects to record a $1.8 million deemed
dividend charge in the quarter ended June 30, 2001.
In connection with the cancellation and exchange of these warrants, the
remaining holder of the Series B Preferred Stock and the holders of the Series C
Preferred Stock have agreed to waive certain anti-dilution rights afforded by
certain outstanding warrants, the Series B Preferred Stock and the Series C
Preferred Stock.
In the event of the liquidation of ProxyMed, the holder of the Series B
Preferred Stock will be entitled to a liquidation preference before any amounts
are paid to the holders of Common Stock. The liquidation preference is equal to
the amount originally paid for the Series B Preferred Stock ($1,000 per share)
plus accrued and unpaid dividends (and any unpaid default interest) on any
outstanding Series B Preferred Stock through the date of determination.
Other than as required by law, the holders of the Series B Preferred
Stock have no voting rights except that the consent of holders of at least
two-thirds of the outstanding Series B Preferred Stock will be required to (1)
effect any change in our Articles of Incorporation that would change any of the
rights of the Series B Preferred Stock; or (2) issue any Series B Preferred
Stock other than pursuant to the Securities Purchase Agreement.
Complete copies of the Series B Articles of Amendment, the form of the
Old Warrants and the Securities Purchase Agreement are contained in our Current
Report on Form 8-K filed with the SEC on December 28, 1999, and are incorporated
herein by
16
reference. Complete copies of the Redemption Agreement, the Exchanged Warrants
and the New Warrants are contained in our Current Report on Form 8-K filed with
the SEC on May 8, 2000, and are incorporated herein by reference. Complete
copies of the Exchange Agreements are contained in our Current Report on Form
8-K filed with SEC on April 26, 2001 and are incorporated herein by reference.
The descriptions of these documents are summaries of the material terms and
conditions only and are qualified in their entirety by reference to the complete
documents which are publicly available from the SEC.
Series C Preferred Stock
Pursuant to the terms of a Subscription Agreement dated June 28, 2000,
we sold, in a private placement to institutional and individual investors (the
"Series C Preferred Financing"), a total of $24,310,000 of 7% Convertible Senior
Secured Notes (the "Notes") due January 1, 2001. Together with the Notes, we
issued five-year warrants for the purchase of an aggregate of 12,155,000 shares
of Common Stock at an exercise price of $1.00 per share. As described below, all
of the Notes have been converted into shares of Series C Preferred Stock. The
conversion price of the Series C Preferred Stock, the warrant exercise price,
and number of shares of Common Stock issuable upon exercise of the warrants are
subject to adjustment upon the occurrence of certain dilution events including,
without limitation, certain issuances of Common Stock, stock options or
convertible securities issued after June 2001, or certain corporate transactions
such as stock splits, mergers or asset sales.
As a result of completion of the redemption of the Series B Preferred
Stock pursuant to the Redemption Agreement, the Notes, plus accrued interest
thereon of approximately $20,000, automatically converted into 243,265 shares of
Series C Preferred Stock on June 30, 2000. Shares of Series C Preferred Stock
are immediately convertible into Common Stock at any time by the holder at an
initial conversion price of $1.00 per share. Shares of Series C Preferred are
subject to mandatory conversion if we raise more than $30 million in gross
proceeds from the issuance of securities in a private or public placement or if
the closing stock price of the Company is trading at $3.00 for 20 consecutive
trading days. The Series C Preferred Stock is entitled to receive a 7% annual
non-cumulative dividend, payable quarterly in cash or shares of Common Stock at
the Company's option. If paid in Common Stock, the Common Stock is valued at
$1.00 per share, subject to adjustment. Commonwealth served as private placement
agent in the Series C Preferred Financing for which it received, in addition to
cash fees of $2,431,000, five-year warrants to purchase 7,293,000 shares of
Common Stock at an exercise price of $1.00 per share. As part of its
compensation for financial advisory services in connection with the Series C
Preferred Financing, we paid cash fees of $250,000 and also issued to
Commonwealth a five-year warrant to purchase 1,000,000 shares of Common Stock at
an exercise price of $1.50 per share.
The investors in the Series C Preferred Financing agreed to a one-year
lockup on the transfer or sale of any shares of Common Stock received upon
conversion of Series C Preferred Stock and exercise of the related warrants
issued. Additionally,
17
Commonwealth has agreed to a 15-month lockup on the sale or transfer of the
shares of Common Stock underlying the warrants issued in connection with Series
C Preferred Financing and certain officers of ProxyMed have also agreed to a
similar lockup on all Common Stock owned or acquired during the 15-month period.
At the discretion of Commonwealth, lockup periods for all parties can be
extended for a period of up to an additional 12 months or may be terminated
early.
In August 2000, the Company sold 10,000 shares of Series C Preferred
Stock for $1 million in a private placement and issued five-year warrants for
the purchase of 500,000 shares of Common Stock at an exercise price of $1.00 per
share to Mr. Michael K. Hoover, its new Chairman of the Board and Chief
Executive Officer, under terms substantially identical to the Series C Preferred
Financing. Mr. Hoover has also agreed to similar lockup terms agreed to in the
Series C Preferred Financing by other officers of ProxyMed, as noted above.
At our option, the quarterly dividend on Series C Preferred Stock may
be paid in cash (to the extent permitted by the terms of the Series B Preferred
Stock) or Common Stock. If paid in stock, the stock is valued at $1.00 per
share, subject to adjustment. Dividends on Series C Preferred Stock are
non-cumulative. Dividends for the quarter ended March 31, 2001 were paid with
436,840 shares of Common Stock issued in April 2001.
In the event of liquidation of ProxyMed, the holders of the Series C
Preferred will be entitled to a liquidation preference before any amounts are
paid to the holders of Common Stock or any other security junior to Series C
Preferred Stock. Series C Preferred Stock ranks junior to the Series B Preferred
Stock with respect to the preference as to distributions and payments upon
liquidation. The liquidation preference is equal to an amount originally paid
for the Series C Preferred Stock ($100 per share) plus accrued and unpaid
dividends on any outstanding Series C Preferred Stock through the date of
determination.
The holders of Series C Preferred Stock are entitled to one vote per
share of Common Stock issuable upon the conversion of the Series C Preferred
Stock and, except as otherwise provided by law, will vote as a single class with
the holders of Common Stock on all matters submitted to a vote. In the event
that the holders of Series C Preferred Stock are required to vote as a single
class, the affirmative vote of holders of not less than two-thirds of the
outstanding shares of Series C Preferred Stock shall be required to approve each
matter to be voted upon and if any matter is approved by such requisite
percentage of holders of Series C Preferred Stock, such matter shall bind all
holders of Series C Preferred Stock.
Complete copies of the Series C Preferred Financing documents described
herein are contained in our Quarterly Report on Form 10-Q/A for the quarterly
period ended June 30, 2000, filed with the SEC on August 31, 2000. The
descriptions of these documents are summaries of the material terms and
conditions only and are qualified in
18
their entirety by reference to the complete documents which are publicly
available from the SEC.
Certain Anti-Takeover Provisions
Under ProxyMed's Articles of Incorporation, there are approximately
13,795,504 unissued, unreserved shares of Common Stock and 1,746,625 shares of
preferred stock available for future issuance without shareholder approval. The
existence of authorized but unissued capital stock could have the effect of
making more difficult or discouraging an acquisition of ProxyMed deemed
undesirable by our Board of Directors.
Nasdaq National Market
Our Common Stock is, and the shares being offered by this Prospectus
will be, traded in the Nasdaq National Market unless our Common Stock is
delisted from Nasdaq. Certain events that could cause our Common Stock to be
delisted from Nasdaq are described in this Prospectus under "Risk Factors - We
may be required to delist our shares from Nasdaq if certain events occur".
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is North American
Transfer Company, Freeport, New York.
PLAN OF DISTRIBUTION
The selling shareholders (or, subject to applicable law, their pledges,
donees, distributees, transferees or successors in interest) are offering shares
of our Common Stock, which were issued to them in exchange for the warrants that
they acquired from us in connection with a certain Redemption Agreement. This
Prospectus covers the selling shareholders' resale of up to 3,282,423 shares of
our Common Stock that we have issued in connection with the exchange of certain
warrants pursuant to an Exchange Agreement with certain investors, as well as
any additional shares that may become issuable upon the exchange of the warrants
because of stock splits, stock dividends and other specified transactions.
We have also agreed to prepare and file any amendments and supplements
to the registration statement in which this Prospectus is included as may be
necessary to keep it effective until this Prospectus is no longer required for
the selling shareholders to sell their shares of Common Stock, and to indemnify
and hold the selling shareholders harmless against certain liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), that could arise in
connection with the selling shareholders' sale of their shares. We have agreed
to pay all reasonable fees and expenses incident to the filing of this
registration statement, but the selling shareholders will pay any brokerage
commissions, discounts or other expenses relating to the sale of their Common
Stock.
19
The selling shareholders may sell the shares of Common Stock described
in this Prospectus directly or through underwriters, broker-dealers or agents.
The selling shareholders may also transfer, devise or give their shares by other
means not described in this Prospectus. As a result, pledges, donees,
transferees or other successors in interest that receive such shares as a gift,
partnership distribution or other non-sale related transfer may offer shares of
Common Stock under this Prospectus. In addition, if any shares covered by this
Prospectus qualify for sale pursuant to Rule 144 under the Securities Act, as
amended, the selling shareholders may sell such shares under Rule 144 rather
than pursuant to this Prospectus.
The selling shareholders may sell shares of Common Stock from time to
time in one or more transactions:
o at fixed prices that may be changed,
o at market prices prevailing at the time of sale, or
o at prices related to such prevailing market prices or at
negotiated prices.
The selling shareholders may offer their shares of Common Stock in one
or more of the following transactions:
o on any national securities exchange or quotation service on
which the Common Stock may be listed or quoted at the time of
sale, including the Nasdaq National Market,
o in the over-the-counter market,
o in privately-negotiated transactions,
o through options,
o by pledge to secure debts and other obligations,
o by a combination of the above methods of sale,
o to cover short sales made pursuant to this Prospectus, or
o any other method permitted pursuant to applicable law.
In effecting sales, brokers or dealers engaged by the selling
shareholders or affiliated with them may arrange for other brokers or dealers to
participate in the resales. The selling shareholders may enter in a block trade
in which a broker-dealer will attempt to sell a block of shares as agent but may
position and resell a portion of the block as
20
principal to facilitate the transaction. A broker-dealer may purchase such
shares as principal and offer the shares for resale for its account pursuant to
this Prospectus. Broker-dealers may agree with the selling shareholders to sell
a specified number of these shares at a stipulated price per share. The selling
shareholders may enter into hedging transactions with broker-dealers, and in
connection with those transactions, broker-dealers may engage in short sales of
the shares. The selling shareholders also may sell shares short and deliver the
shares to close out such short positions. The selling shareholders also may
enter into option or other transactions with broker-dealers that require the
delivery to the broker-dealer of the shares, which the broker-dealer may resell
pursuant to this Prospectus. The selling shareholders also may pledge the shares
to a broker or dealer, and upon a default, the broker or dealer may effect sales
of the pledged shares pursuant to this Prospectus.
Broker-dealers may receive commissions or discounts from the selling
shareholders (or, if any broker-dealer cats as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated, which commissions and
discounts may exceed what is customary in the types of transactions involved.
The broker-dealer transactions may include:
o purchases of the shares by a broker-dealer as principal and
resales of the shares by the broker-dealer for its account
pursuant to this Prospectus;
o ordinary brokerage transactions; or
o transactions in which the broker-dealer solicits purchasers.
If a material arrangement with any broker-dealer or other agency is
entered into for the sale of any shares of common stock through a block trade,
special offering, exchange distribution, secondary distribution, or a purchase
by a broker or dealer, a Prospectus supplement will be filed, if necessary,
pursuant to Rule 424(b) under the Securities Act disclosing the material terms
and conditions of these arrangements.
The SEC may deem the selling shareholders and any underwriters,
broker-dealers or agents that participate in the distribution of the shares of
Common Stock to be "underwriters" within the meaning of the Securities Act. The
SEC may deem any profits on the resale of the shares of Common Stock and any
compensation received by any underwriter, broker-dealer or agent to be
underwriting discounts and commissions under the Securities Act.
Under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), any person engaged in the distribution of the shares of Common Stock may
not simultaneously engage in market-making activities with respect to Common
Stock for five business days prior to the start of the distribution. In
addition, each selling shareholder and any other person participating in a
distribution will be subject to the
21
Exchange Act, which may limit the timing of purchases and sales of Common Stock
by the selling shareholder or any other person.
LEGAL OPINION
The validity of the Common Stock offered hereby will be passed on for
us by Holland & Knight LLP, 701 Brickell Avenue, Suite 3000, Miami, Florida
33131.
EXPERTS
The consolidated financial statements of ProxyMed as of December 31,
2000 and 1999 and for each of the three years in the period ended December 31,
2000, incorporated by reference in this Prospectus have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given the authority of said firm as experts in accounting and auditing.
22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses in connection
with the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fee.
To Be Paid
By The
Registrant
----------
SEC registration fee $ 854
Accounting fees and expenses 5,000
Legal fees and expenses 25,000
Miscellaneous 4,146
--------
$ 35,000
========
Item 15. Indemnification of Directors and Officers.
Section 607.0850 of the Florida Business Corporation Act empowers a
Florida corporation to indemnify any person who was or is a party to any
proceeding (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against liability
incurred in connection with such proceeding, including any appeal thereof, 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, such person had no reasonable
cause to believe his conduct was unlawful. A Florida corporation may indemnify
such person against expenses including amounts paid in settlement (not
exceeding, in the judgment of the board of directors, the estimated expense of
litigating the proceeding to conclusion) actually and reasonably incurred by
such person in connection with actions brought by or in the right of the
corporation to procure a judgment its favor under the same conditions set forth
above, if such person acted in good faith and in a manner such person believed
to be in, or not opposed to, the best interests of the corporation, except that
no indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and to the extent the court in which such action or suit was brought or
other court of competent jurisdiction shall determine upon application that, in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
To the extent such person has been successful on the merits or
otherwise in defense of any action referred to above, or in defense of any
claim, issue or matter therein, the corporation must indemnify such person
against expenses, including counsel (including those for appeal) fees, actually
and reasonably incurred by such person in connection therewith. The
indemnification and advancement of expenses provided for in, or granted pursuant
to, Section 607.0850 is not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation of ProxyMed or any by-law, agreement, vote of shareholders or
disinterested directors, or otherwise. Section 607.0850 also provides that a
corporation may maintain insurance against liabilities for which indemnification
is not expressly provided by the statute.
Article VII of ProxyMed's Restated Articles of Incorporation and
Article VII of ProxyMed's Bylaws provide for indemnification of the directors,
officers, employees and agents of ProxyMed (including the advancement of
expenses) to the fullest extent permitted by Florida law. In addition, ProxyMed
has contractually agreed to indemnify its directors and officers to the fullest
extent permitted under Florida law.
ProxyMed's employment agreements with its principal executive officers
limit their personal liability for monetary damages for breach of their
fiduciary duties as officers and directors, except for liability that cannot be
eliminated under the Florida Business Corporation Act.
Item 16. Exhibits.
The following exhibits are filed with this Registration Statement:
Exhibit No. Description of Documents
- ----------- ------------------------
4.1 Form of Warrant to Purchase Common Stock of ProxyMed, Inc.,
dated December 23, 1999, issued to certain investors. (1)
4.2 Registration Rights Agreement, dated as of December 23, 1999,
by and among ProxyMed, Inc. and the investors named therein.
(1)
4.3 Form of Exchanged Warrant to Purchase Common Stock of
ProxyMed, Inc., dated May 4, 2000, issued to certain
investors. (2)
4.4 Form of New Warrant to Purchase Common Stock of ProxyMed,
Inc.,
dated May 4, 2000, issued to certain investors. (2)
4.5 Registration Rights Agreement, dated as of May 4, 2000, by and
among ProxyMed, Inc. and the investors named therein. (2)
4.6 Registration Rights Agreement dated as of April 24, 2001
between ProxyMed, Inc. and Fisher Capital LTD. and Wingate
Capital LTD. (3)
4.7 Registration Rights Agreement dated as of April 24, 2001
between ProxyMed, Inc. and Royal Bank of Canada and Leonardo,
L.P. (3)
5.1 Opinion of Holland & Knight LLP.
23.1 Consent of Holland & Knight LLP (included in the opinion filed
as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on signature page of the
Registration Statement).
(1) Incorporated by reference to the exhibits filed with the Current Report
on Form 8-K dated December 23, 1999.
(2) Incorporated by reference to the exhibits filed with the Current Report
on Form 8-K dated May 8, 2000.
(3) Incorporated by reference to the exhibits filed with the Current Report
on Form 8-K dated April 26, 2001.
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; (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; and (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; (2) that, for the purpose of determining any liability
under the Securities Act of 1933, 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 the time shall be deemed to be
the initial bona fide offering thereof; and (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) 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 of 1934 (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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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.
(d) The undersigned Registrant hereby undertakes that: (i) for the
purposes of determining any liability under the Securities Act, 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 the registration statement as of the time it was
declared effective; and (ii) for the purposes of determining any liability under
the Securities Act, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on May 8, 2001.
PROXYMED, INC.
By: /s/ Judson E. Schmid
----------------------------------
Executive Vice President, Chief
Financial Officer and Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael K. Hoover and Frank M. Puthoff,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, in any and all capacities, to
sign all amendments (including post-effective amendments) to the Registration
Statement to which this power of attorney is attached, and to file all those
amendments and all exhibits to them and other documents to be filed in
connection with them, including any registration statement pursuant to Rule 462
under Securities Act of 1933, with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Michael K. Hoover Chairman of the Board, Chief May 8, 2001
- ----------------------------- Executive Officer and Director
Michael K. Hoover
/s/ Harold S. Blue Vice-Chairman of the Board and May 8, 2001
- ----------------------------- Director
Harold S. Blue
/s/ Edwin M. Cooperman Director May 8, 2001
- -----------------------------
Edwin M. Cooperman
/s/ Gerald B. Cramer Director May 8, 2001
- -----------------------------
Gerald B. Cramer
/s/ Donald G. Drapkin Director May 8, 2001
- -----------------------------
Donald G. Drapkin
/s/ Michael S. Falk Director May 8, 2001
- -----------------------------
Michael S. Falk
/s/ Thomas E. Hodapp Director May 8, 2001
- -----------------------------
Thomas E. Hodapp
/s/ Bertram J. Polan Director May 8, 2001
- -----------------------------
Bertram J. Polan
/s/ Eugene R. Terry Director May 8, 2001
- -----------------------------
Eugene R. Terry
INDEX TO EXHIBITS
Exhibit No. Description of Documents
- ----------- ------------------------
5.1 Opinion of Holland & Knight LLP.
23.1 Consent of Holland & Knight LLP (included in the opinion
filed as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on signature page of the
Registration Statement).