As filed with the Securities and Exchange Commission on August 29, 1996
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PROXYMED, INC.
(Exact name of small business issuer as specified in its charter)
Florida 65-0202059
(State of Incorporation) (I.R.S. Employer Identification Number)
2501 Davie Road, Suite 230
Ft. Lauderdale, Florida 33317
Telephone: (954) 473-1001
Telecopy: (954) 473-0620
(Address and telephone number of registrant's principal executive offices)
Harold S. Blue, Chief Executive Officer
ProxyMed, Inc.
2501 Davie Road, Suite 230
Ft. Lauderdale, Florida 33317
Telephone: (954) 473-1001
Telecopy: (954) 473-0620
(Name, address and telephone number of agent for service)
Copies to:
Robert B. Macaulay, Esq.
Olle, Macaulay & Zorrilla, P.A.
1402 Miami Center
201 South Biscayne Boulevard
Miami, Florida 33131
Telephone: (305) 358-9200
Telecopy: (305) 358-9617
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of each class Amount offering aggregate Amount of
of securities to be registered to be price per offering registration
registered share(1) price(1) fee
- --------------------------------------------------------------------------------
Common Stock, $.001 par value,
for sale from time to time by
Selling Shareholders(2)(3) 165,000 $11.875 $1,959,375 $675.59
(footnotes on following page)
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and is based upon the average of the high and
low sale prices per share of the registrant's common stock on August
26, 1996, as reported by the Nasdaq SmallCap Market.
(2) Pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may become issuable pursuant to the
antidilution provisions of outstanding warrants.
(3) 150,000 of the shares offered by Selling Shareholders include shares
issuable upon exercise of outstanding warrants held by a licensee of
the registrant, which issuances are being registered hereby. Pursuant
to Rule 457(g), because the price at which such shares may currently be
resold is higher than the exercise prices of such warrants, the higher
market price, calculated in accordance with Rule 457(c), is being used
to calculate the registration fee for such shares.
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
PROXYMED, INC.
Cross Reference Sheet
Location in Prospectus of Information Required by Items of Form S-3
FORM S-3 ITEM NUMBER AND CAPTION OR LOCATION IN PROSPECTUS
- --------------------------------- --------------------------------
1. Forepart of Registration Statement and Outside Forepart of the Registration Statement;
Front Cover Page of Prospectus Outside Front Cover of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover Pages of Prospectus
of Prospectus
3. Summary Information, Risk Factors and Ratio The Company; Summary of the Offering; Summary Financial
of Earnings to Fixed Charges Information; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page of Prospectus; Selling Shareholders
6. Dilution Not Applicable
7. Selling Security-Holders Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Registered Not applicable
10. Interests of Named Experts and Counsel Legal Matters Experts
11. Material Changes The Company; Summary Financial Information; Risk Factors;
Information Incorporated by Reference
12. Incorporation of Certain Information by Reference Information Incorporated by Reference
13. Disclosure of Commission Position on Indemnification Not Applicable
for Securities Act Liabilities
Preliminary Prospectus Dated August 29, 1996; Subject to Completion
165,000 Shares
PROXYMED, INC.
COMMON STOCK
This Prospectus covers up to 150,000 shares of common stock, $.001 par
value (the "Common Stock"), of ProxyMed, Inc. (the "Company"), which may be
issued upon the exercise of certain outstanding warrants (the "Warrants") which
the Company has issued to its licensee Personalized Programming, Inc., a Florida
corporation ("PPI"), or its assigns, in connection with the Electronic Commerce
and Healthcare Information Licensing Agreement between the Company and PPI dated
May 31, 1996 (the "Agreement"). The Warrants are presently exercisable at $3.50
per share. The exercise price of the Warrants and the number of shares issuable
upon exercise are subject to adjustment in certain circumstances. The Prospectus
also covers 15,000 shares of Common Stock being offered by Eugene R. and Suzanne
Terry. Mr. Terry is a Director of the Company who received the shares in May
1996 as compensation for consulting services rendered and to be rendered by him
to the Company. Unless the context otherwise requires, Mr. Terry and PPI shall
be referred to collectively as the "Selling Shareholders." Except as otherwise
specifically noted herein, all financial information contained in this
Prospectus is retroactively adjusted to give effect to the Company's June 24,
1996, 3-for-2 stock split.
The Common Stock may be offered from time to time by the Selling
Shareholders through ordinary brokerage transactions, in negotiated transactions
or otherwise, at market prices prevailing at the time of sale or at negotiated
prices. The Company will not realize any proceeds from the sale of the Common
Stock by the Selling Shareholders. See "Selling Shareholders" and "Plan of
Distribution."
The Common Stock trades on the Nasdaq SmallCap tier of the Nasdaq Stock
Market under the symbol "PILL." On August 26, 1996, the last reported sale price
of the Common Stock was $11.75.
THE SECURITIES OFFERED HEREBY INVOLVE A SUBSTANTIAL DEGREE OF RISK AND SHOULD
NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS ENTIRE INVESTMENT.
SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is August 29, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Information, as of particular dates,
concerning directors and officers, their remuneration, options granted to them,
and the principal holders of securities of the Company, is disclosed in proxy
statements distributed to the shareholders. Such reports, proxy statements and
other information filed by the Company may be inspected and copied at the public
reference facilities of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at 7 World Trade
Center, New York, New York 10048, and at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511, at prescribed rates.
Copies of such information may also be inspected at the Operations and Report
facilities at NASDAQ, 1735 K Street, N.W., Washington D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference:
(a) Annual Report on Form 10-KSB for the year ended December 31,
1995;
(b) Quarterly Report on Form 10-QSB for the three months ended
March 31, 1996;
(c) Quarterly Report on Form 10-QSB for the six months ended
June 30, 1996;
(d) Current Report on Form 8-K reporting an event dated
February 1, 1996;
(e) Current Report on Form 8-K reporting an event dated
May 23, 1996;
(f) Current Report on Form 8-K reporting an event dated
May 31, 1996; and
(g) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A declared effective on
August 5, 1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Common Stock offered hereby shall be
deemed to be incorporated by reference herein and to be a part hereof on the
date of filing such documents.
The Company shall furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference, except for the
exhibits to such documents. Requests should be
2
made to Harold S. Blue, Chief Executive Officer, at ProxyMed, Inc., 2501 Davie
Road, Suite 230, Ft. Lauderdale, Florida 33317, telephone number (954) 473-1001.
IN CONNECTION WITH THIS OFFERING, CERTAIN BROKERS OR DEALERS, WHO MAY BE DEEMED
UNDERWRITERS, MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMPANY'S
COMMON STOCK ON NASDAQ IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES
EXCHANGE ACT OF 1934. SEE "PLAN OF DISTRIBUTION."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "The Company," "Risk Factors" and
elsewhere in this Prospectus and the information incorporated herein by
reference constitute "forward-looking statements" within the meaning of the
Securities Act of 1933. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other factors include, among others, those discussed under the
caption "Risk Factors."
3
THE COMPANY
ProxyMed, Inc. (together with its subsidiaries, the "Company") is a
healthcare information technology company. The Company's products and services
electronically link physicians, managed care organizations ("MCOs") and
pharmacies through its innovative pharmacy management systems and on-line
computer network. The products and services designed by the Company facilitate
the free flow of clinical pharmacy information among these parties in order to
assist them in providing safe, efficient and cost-effective healthcare. The
Company's products and services fit into three basic categories: network
services, software products and clinical information services.
NETWORK SERVICES. PROXYNET, the Company's healthcare information
network, is the centerpiece of the Company's products and services. Through the
Company's centralized computer system, ProxyNet enables physicians, MCOs and
pharmacies to transmit clinical pharmacy information and to access the Company's
clinical information databases. Customers will be able to access ProxyNet and
utilize the Company's network services through either the Company's or third
parties' software products.
SOFTWARE PRODUCTS. The Company's software products provide its
customers with proprietary, on-line pharmacy management and drug utilization
review capabilities and access to ProxyNet. The Company has three software
products: PROXYSCRIPT \trademark\ provides pharmacy management at the point of
care, the prescribing physician's office, and automates the generation,
processing and management of prescriptions; PROXYVIEW \trademark\ enables MCOs,
including health maintenance organizations ("HMOs") and physician practice
management groups ("PPMs"), to review prescriptions on-line as they are
transmitted by affiliated physicians; and RXRECEIVE \trademark\ permits
pharmacies to receive prescriptions electronically.
CLINICAL INFORMATION SERVICES. The Company offers subscriptions to
various pharmacy-related databases, including a proprietary drug database
utilized as a drug reference and for information on generic drug equivalents, a
directory of all physicians and pharmacies participating in ProxyNet, clinical
interaction databases and MCO "formularies" (lists of approved drugs) published
by the Company.
The Company's products and services provide users with a number of
benefits. Physicians can electronically (i) perform allergy, disease and drug
interaction screening, (ii) search for alternative generic or less-expensive
drug choices, (iii) review prescriptions against applicable MCO formularies and
(iv) transmit prescriptions electronically to pharmacies, all before the patient
leaves the office. MCOs can review prescriptions written by affiliated
physicians on-line before the prescriptions reach the pharmacy and can generate
prescription data reports. This enables MCOs to ensure timely compliance with
their quality of care and cost containment guidelines. Pharmacies can receive
legible prescriptions electronically either by a facsimile or computer, thereby
lowering costs and increasing efficiency.
4
As part of its marketing strategy, on February 1, 1996, the Company
entered into a strategic marketing agreement (the "Bergen Agreement") with
Bergen Brunswig Drug Company and IntePlex, Inc., both of which are wholly-owned
subsidiaries of Bergen Brunswig Corporation (collectively, "Bergen"), a national
pharmaceutical and medical supplies distributor with reported consolidated 1995
revenues of $8.4 billion. Under this agreement, Bergen paid a one-time,
nonrefundable fee of $1,000,000 for a non-exclusive license to market the
Company's current products and services throughout the United States utilizing
Bergen's national sales force.
The Company anticipates generating revenues through (i) fees for use
and support of the Company's software products and services, (ii) fees paid by
pharmacies and MCOs for prescription transactions, (iii) subscription fees for
access to the Company's databases and (iv) sales of information generated by the
Company's operations. The Company also expects to generate revenues from the
sale of third-party computer hardware products for use with the Company's
software products.
Current trends in the healthcare industry present significant
opportunities for the Company. According to the Group Health Association of
America ("GHAA"), HMO enrollment in the United States increased 13.1% from 1993
to 1994 to approximately 51 million enrollees in 1994, or 19% of the total
population. This increased enrollment in HMOs and other MCOs results from
substantial increases in healthcare costs in recent years. MCOs continue to
search for ways to lower healthcare costs while also improving the quality of
care. The Company believes that its products and services will assist MCOs in
achieving these goals.
The Company is seeking to capitalize on these and other trends to
become a leader in the emerging healthcare information technology segment of the
healthcare industry as follows:
INCREASING THE NUMBER OF END-USERS. The Company's goal is to become the
first prescription origination and review system in a physician's office by (i)
targeting customers that are responsible ("at-risk") for payment of their
pharmacy costs, (ii) allowing access to ProxyNet through medical practice
management software products developed by third parties and (iii) marketing its
products and services as a value-added product to other pharmacy-related
companies.
ESTABLISHING AND ENHANCING STRATEGIC RELATIONSHIPS. Because a
significant portion of Bergen's customers are at-risk, the Company plans to
leverage the marketing strength and industry position of Bergen to sell its
products and services to these customers as a key component in its marketing
efforts. At the same time, the Company is developing strategic relationships
with companies in other segments of the healthcare industry, such as MCOs,
pharmacy benefit managers, electronic claims processors, and medical practice
and pharmacy management software companies.
POSITIONING PROXYNET AS AN INDEPENDENT NETWORK. The Company plans to
allow access to ProxyNet both by its own software users and by users of
third-party software products. By positioning ProxyNet as an independent
network, the Company will enable users to send
5
prescriptions electronically over ProxyNet between physicians, MCOs and
pharmacies even if they are all using different software systems. This will
allow the Company to seek a larger portion of electronic prescription
transaction revenues.
INCREASING PRODUCT AND SERVICE RANGE. The Company intends to continue
to expand the range of products and services that it provides. The Company has
recently introduced ProxyView and RxReceive and is currently developing software
products for the nursing home industry and products that enable physicians to
inventory and distribute drug samples and to manage laboratory testing. The
Company is continually monitoring customers and the healthcare industry
generally in search of areas where it can provide valuable additional products
or services.
The Company was incorporated in Florida in 1989, and its executive
offices are located at 2501 Davie Road, Suite 230, Fort Lauderdale, Florida
33317-7424. The Company's telephone number is (954) 473-1001.
RECENT DEVELOPMENTS
On May 13, 1996, the Company completed the sale of 2,917,500 shares of
Common Stock in an underwritten offering to the public at $4.42 per share.
Subsequently, on May 23, 1996, the underwriters elected to exercise their
overallotment option to purchase an additional 450,000 shares of Common Stock at
the same price. In total, the sale of the 3,367,500 shares by the Company
resulted in net proceeds of $13,041,309, after expenses of $1,831,816. Net
proceeds from the offering are being used for sales and marketing of the
Company's healthcare information technology products and services, product
development, payment of capital lease obligations and working capital. As part
of the transaction, the Company issued warrants to purchase 300,000 shares of
Common Stock to the underwriter's representative, which are exercisable for five
years at a price of $5.63 per share.
On May 31, 1996, the Company entered into a five-year Electronic
Commerce and Healthcare Information Licensing Agreement (the "Agreement") with
PPI. Pursuant to the Agreement, the Company is to provide PPI with a "software
developer's toolbox" containing various software and documentation to enable PPI
to develop interfaces for its physician practice management software program
called "The Medical Manager." The interfaces will enable users of The Medical
Manager prescription module to access the Company's prescription network,
ProxyNet, and the Company's formulary databases. The Agreement grants to PPI a
non-exclusive license to sell access to the Company's network services and
formulary databases to users of The Medical Manager directly and through its
distributors. The Company and PPI will share revenues derived from the services,
databases and transaction fees as well as other transaction fees in certain
cases.
In consideration for development of the interfaces by PPI, the Company
agreed to pay PPI certain undisclosed development fees. In addition, the Company
granted the Warrants to PPI.
6
SUMMARY OF THE OFFERING
The following summary information is qualified in its entirety by
reference to the more detailed information appearing elsewhere in this
Prospectus or which is incorporated herein by reference. Except as otherwise
noted herein, all financial information contained in this Prospectus is
retroactively adjusted to give effect to the Company's June 24, 1996, 3-for-2
stock split.
Common Stock offered by the Selling
Shareholders.......................................165,000 shares
Common Stock outstanding prior to
the Offering...................................... 9,527,272 shares
Common Stock outstanding after the
Offering, assuming exercise of the
Warrants.......................................... 9,677,272 shares(1)
Use of proceeds......................................Any proceeds received by the Company
from time to time upon exercise of the
Warrants will be used for working capital
and general corporate purposes. See "Use of
Proceeds." The Company will not receive
any proceeds from the sale of Common
Stock by the Selling Stockholders.
Warrants.............................................The Warrants are presently exercisable at
$3.50 per share until May 31, 2001. The
exercise price of the Warrants and the
number of shares issuable thereunder are
subject to adjustment in certain
circumstances.
Risk Factors.........................................The securities offered hereby involve a
substantial degree of risk and should not be
purchased by anyone who cannot afford the
loss of his entire investment. See "Risk
Factors."
Nasdaq SmallCap Market symbol........................PILL
<FN>
_________________________________
(1) Excludes (i) 2,097,564 shares of Common Stock reserved for issuance
upon the exercise of outstanding options and warrants as of the date of
this Prospectus; and (ii) 180,000 shares of Common Stock reserved for
issuance in connection with an acquisition upon the occurrence of a
defined change in control of the Company.
</FN>
7
RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED HEREBY IS HIGHLY SPECULATIVE,
INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE MADE ONLY BY INVESTORS WHO CAN
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. EACH PROSPECTIVE INVESTOR, PRIOR TO
MAKING AN INVESTMENT DECISION, SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, IN ADDITION TO ALL OF THE OTHER INFORMATION PROVIDED IN THIS PROSPECTUS
AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE.
SUBSTANTIAL AND CONTINUING LOSSES; SALE OF SIGNIFICANT ASSETS TO ECKERD
AND NHCA; MINIMAL REVENUES. The Company has incurred substantial losses,
including losses of $4,266,000 and $2,849,000, respectively, for the fiscal
years ended December 31, 1994 and 1995, and an operating loss of $970,000 for
the six months ended June 30, 1996. In March 1995, the Company sold certain
assets relating to its prescription drug dispensing operations to Eckerd
Corporation ("Eckerd"). These assets accounted for approximately $13,513,000 (or
82%) and $3,404,000 (or 45%), respectively, of the Company's revenues in 1994
and 1995. In September 1995, the Company sold its home infusion subsidiary to
National Health Care Affiliates, Inc., and an affiliate thereof (collectively,
"NHCA"). Such subsidiary accounted for approximately $1,983,000 (or 12%) and
$1,936,000 (or 25%), respectively, of the Company's revenues in 1994 and 1995.
Further, the Company is considering whether its institutional drug dispensing
operations, which currently represent a principal source of revenues, fit within
its long-term business plan; however, there are no understandings, commitments
or agreements for the sale of these operations as of the date of this
Prospectus. As a result of the foregoing, the Company's revenues from operations
are expected to remain much lower than expenses until such time, if ever, as it
is able to successfully commercialize and generate significant revenues from its
healthcare information technology operations. Accordingly, the Company expects
to continue to incur substantial losses in the foreseeable future. There can be
no assurance that the Company will ever generate significant revenues from its
healthcare information technology products and services or that the Company will
ever achieve profitable operations.
NO RELEVANT OPERATING HISTORY; SHIFT IN BUSINESS EMPHASIS; UNCERTAINTY
OF PRODUCT COMMERCIALIZATION. During the past year, the Company has emphasized
the commercialization of its healthcare information technology products and
services. To date, this activity has generated limited revenues. These products
and services are currently being utilized primarily on a limited basis at no
charge in connection with the drug dispensing operations sold to Eckerd and
pursuant to pilot programs with certain MCOs. Accordingly, the Company has only
a limited operating history upon which an evaluation of its performance and
prospects can be made. The Company is and will be subject to numerous risks,
uncertainties, expenses, delays, problems and difficulties in its attempt to
establish a new business in a highly competitive industry, and in its shift from
dispensing pharmaceuticals to the development and commercialization of
technology-based products and services. The Company's business plans and
prospects will be dependent upon, among other things, the Company's ability to
(i) achieve significant market acceptance for its products and services, (ii)
develop and implement effective new products and services, (iii) establish an
effective sales and marketing organization and (iv) establish an effective
customer support and maintenance organization. There can be no assurance that
the Company will be able
8
to successfully implement its business plans or that its efforts will result in
successful product/service commercialization.
SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR SUBSTANTIAL ADDITIONAL
FINANCING. The Company's capital requirements in connection with the marketing
and sale of its products and services are significant. The Company believes,
based upon its currently proposed plans and assumptions relating to its
operations, that the net proceeds of its May 1996 public offering of Common
Stock (the "May 1996 Offering") will provide the funds necessary to satisfy its
cash requirements for approximately 18 months following the date of this
Prospectus, during which time the Company believes that it can commercialize its
products and services; however, there can be no assurance that such proceeds
will in fact be sufficient. Implementation of the Company's proposed business
plans and the commercialization of its products and services may require
financial resources substantially greater than the proceeds of the May 1996
Offering or those otherwise currently available to the Company. The Company has
no other arrangements with respect to, or sources of, additional financing.
There can be no assurance that additional funds will be available when needed
or, if available, will be available on terms acceptable to the Company. Any such
additional financing may result in significant dilution to existing
shareholders. If needed financing is not obtained, the Company may be forced to
curtail or even cease operations.
CONTINGENT RECEIVABLE DUE FROM ECKERD. The agreement between the
Company and Eckerd relating to the sale of certain assets of the Company's
prescription drug dispensing operations contemplates that Eckerd will pay up to
$950,000 to the Company on October 5, 1996. The amount of payment is contingent
and subject to downward adjustment based upon the number of prescriptions filled
by Eckerd from prescription files purchased by Eckerd from the Company and,
under certain circumstances, no payment is required to be made. There can be no
assurance that the Company will receive any further payment from Eckerd. To the
extent that Eckerd pays less than the maximum scheduled payment, the Company
will have less funds available to it for other purposes, including the
commercialization of its technology products and services.
STRATEGIC RELATIONSHIPS. Under the Bergen Agreement, Bergen received a
non-exclusive license to market the Company's current healthcare information
technology products and services throughout the United States utilizing the
Bergen sales force. This agreement requires the Company to, among other things,
provide training to the relevant members of the Bergen sales force and requires
the Company to pay to Bergen 10% to 30% of all net revenues received by the
Company from the sale of the designated products and services, depending on the
Company's overall annual sales volume, and to share equally certain other
revenues. Bergen is entitled to these payments based on the Company's sales
regardless of whether or not Bergen generates those sales. Bergen will receive
its largest percentage compensation when the Company's sales are the lowest and
the Company's needs are therefore the greatest. Moreover, the percentages
payable to Bergen on lower levels of sales represent a major commitment of the
Company's revenues at a time when the Company has no assurance that it will even
be able to sell its products and services at prices or in volumes sufficient to
cover its corporate overhead and Bergen's
9
compensation. There can be no assurance that Bergen will be able to generate
sufficient sales volume so as to make the Bergen Agreement profitable to the
Company. If Bergen is unable to generate sufficient sales, the Company may be
forced to spend significant amounts of its own funds on marketing efforts and/or
to enter into additional strategic marketing arrangements, thereby materially
adversely affecting its potential profitability. While Bergen's license is
nonexclusive, the Company is prohibited from entering into similar arrangements
with certain of Bergen's principal competitors, including other major national
pharmaceutical and medical supplies distributors. Thus, the Company's ability to
enter into additional strategic marketing arrangements is significantly
restricted by the Bergen Agreement.
On March 1, 1996, the Company entered into a license agreement with
Blue Cross and Blue Shield of Massachusetts, Inc. ("BCBSM"), a large health
insurance provider based in Boston, Massachusetts, with over 2,000,000 members
throughout New England. Under this agreement (the "BCBSM Agreement"), BCBSM
received the right to license ProxyScript to all physicians, including its
12,000 affiliated physicians, in Massachusetts, Vermont, New Hampshire, Maine,
Rhode Island and Connecticut (the "States"). This right is exclusive for two
years in all of the States, except for Connecticut. Under the BCBSM Agreement,
the Company is barred for two years from competing in the States (except
Connecticut) with BCBSM's electronic prescription business and BCBSM is barred
from competing with the Company's electronic prescription business outside the
States for the same two-year period. By the time the two-year period expires,
many physicians in the States may have already obtained the software products
and network services they need from BCBSM or other providers. Accordingly, the
BCBSM Agreement may materially adversely affect the Company's ability to market
its products and services in the States, not only for the two-year exclusive
period, but also thereafter.
The Company has entered into or is in the process of negotiating other
strategic relationships and revenue sharing arrangements, including, but not
limited to, the Agreement with PPI. These relationships and arrangements could
materially adversely affect the Company's business and financial condition if
the other parties do not perform as anticipated.
EMERGING BUSINESS; NEW CONCEPT; UNCERTAINTY OF MARKET ACCEPTANCE. The
healthcare information technology segment of the healthcare industry is an
emerging business. As is typical in an emerging business, demand and market
acceptance for newly introduced products and services are subject to a high
level of uncertainty. The Company commenced marketing activities with respect to
its new products and services approximately one year ago, and has not conducted
and does not intend to conduct any independent marketing or other concept
feasibility studies to determine the potential commercial viability of its
products and services in any markets. Achieving market acceptance for the
Company's products and services will require substantial marketing efforts and
expenditure of significant funds to create awareness and demand by pharmacies,
physician groups, MCOs and other healthcare payors. There can be no assurance
that substantial markets will develop for electronic prescription products and
services or that the Company will be able to succeed in positioning its products
and services as a preferred method for managing pharmacy benefits or to achieve
significant market acceptance for its products and services.
10
GOVERNMENT REGULATION. The Company's products and services are subject
to extensive and frequently changing state and federal laws and regulations. A
primary feature of the Company's products and services is the ability to
electronically transmit (either by computer-to-facsimile or
computer-to-computer) prescriptions from a physician's office to a pharmacy.
Less than 25% of the states of the United States have pharmacy laws and
regulations that expressly permit the electronic transmission of
computer-generated prescriptions. Accordingly, the Company may only be able to
market its products and services in a limited number of states. Further,
applicable federal laws and regulations which govern certain drugs classified as
"controlled substances" do not specifically address the electronic transmission
of computer-generated prescriptions. While the Company believes that the current
trend is toward greater acceptance by regulators and state and federal
legislatures of electronic transmission of computer-generated prescriptions,
there can be no assurance that this trend will continue. In addition, each state
has various laws protecting the confidentiality of patient medical information,
including prescription information. Although it is not uncommon for a third
party to have access to such information, such third party has an obligation to
maintain the confidentiality of such information and could be subject to
liability if that obligation is breached. The Company has procedures in place to
maintain the confidentiality of the information it receives as part of its
ProxyNet services; however, there can be no assurance that inadvertent
disclosure of information will not expose the Company to liability. The Company
believes that it is in substantial compliance with all material federal and
state laws and regulations governing its operations and has obtained all
licenses necessary for the operation of its business. There can be no assurance,
however, that the Company will not be materially adversely affected by existing
or new regulatory requirements or interpretations, including, but not limited
to, those restricting the electronic transmission of computer-generated
prescriptions.
COMPETITION. The Company faces competition from many companies in the
healthcare information technology business. Certain companies are developing
products or services which are or may become directly competitive with the
Company's products and services. Such companies, which include subsidiaries of
International Business Machines Corporation, Eli Lilly & Co. and Glaxo Wellcome
plc and certain major on-line transaction processing companies, are
well-established, have substantially greater financial and other resources than
the Company, and have established reputations for success in implementing
healthcare information technology. There can be no assurance that the Company
will be able to compete successfully or that competitors will not commercialize
products or services that render the Company's products and services obsolete or
less marketable.
UNCERTAINTY OF PRODUCT DEVELOPMENT; POSSIBLE DEFECTS. The quality of
the Company's software products and network systems is of critical importance to
the Company's business plans and prospects. Although the Company has completed
the development of its software products and network systems, which the Company
believes efficiently perform the principal functions for which they have been
designed, such products and systems are currently being utilized for limited
applications. There can be no assurance that, upon widespread commercial use of
the Company's software products and network systems, such products and systems
will satisfactorily perform all of the functions for which they have been
designed or that unanticipated technical or other errors
11
will not occur which would result in increased costs or material delays.
Appearance of such errors could delay the Company's plans, result in harmful
publicity and cause the Company to incur substantial remedial costs, all of
which could have a material adverse effect on the Company.
RELATIONSHIPS WITH SOFTWARE DEVELOPERS. ProxyNet, the Company's
healthcare information network, is currently being accessed only by users of the
Company's software. A key element of the Company's business strategy is to
develop relationships with leading software companies which develop and/or
market compatible medical practice or pharmacy management software products. In
order to develop and maintain these relationships, the Company may be required
to commit considerable additional efforts and resources. The Company currently
has a limited number of such relationships. There can be no assurance that the
Company will be able to develop or maintain these desired relationships or that,
in the event that they are developed, these companies, many of which have
significantly greater financial and marketing resources than the Company, will
not develop and market products in competition with the Company in the future or
will not otherwise discontinue their relationships with the Company.
NEW PRODUCTS AND TECHNOLOGICAL CHANGE. The market for the Company's
products and services is characterized by ongoing technological development and
evolving industry standards. The Company's success will depend upon its ability
to enhance its current products and services and to introduce new products and
services which address technological and market developments and satisfy the
increasingly sophisticated needs of customers. There can be no assurance that
the Company will be successful in developing and marketing, on a timely basis,
fully functional product and service enhancements or new products and services
that respond to the technological advances by others, or that its new products
and services will be accepted by customers. From time to time, the Company may
announce new products, services or technologies that have the potential to
replace the Company's existing product and service offerings. There can be no
assurance that the announcement of new product and service offerings will not
cause customers to defer purchases of existing Company products and services,
which could materially and adversely affect the Company's revenues and results
of operations.
DEPENDENCE ON PROPRIETARY INFORMATION. The Company's success is, in
large part, dependent upon its proprietary information and technology. The
Company relies on a combination of trademark, copyright, trade secret and
contract protection to establish and protect its proprietary rights in its
products, services, trade names and technology. The Company has filed with the
United States Patent and Trademark Office applications to register its
trademarks ProxyNet, ProxyScript and RxReceive, and the Company intends to file
such an application for ProxyView. Also, the Company intends to make application
for the registration of its software with the United States Copyright Office.
There can be no assurance that the steps taken by the Company in this regard
will be adequate to deter misappropriation of its proprietary rights or
independent third party development of substantially similar products, services
and technology. Although the Company believes its 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, software developers may become increasingly
12
subject to infringement claims. Any such claims, with or without merit, could
result in costly litigation or might require the Company to enter into royalty
or licensing agreements. Such royalty or licensing agreements, if required, may
not be available on terms acceptable to the Company or at all. Any successful
infringement claim could have a material adverse effect on the Company.
PRODUCT LIABILITY AND AVAILABILITY OF INSURANCE. The Company's business
exposes it to potential liability risks that are inherent in the sale of
healthcare information technology products and services. Because the Company's
products and services relate to the prescribing of drugs and the filling of
prescriptions, an error by any party in the process could result in substantial
injury to a patient. As a result, the Company's liability risks are significant.
The Company maintains a $2,000,000 general liability insurance policy, which
includes coverage of $1,000,000 per occurrence, plus a $10,000,000 umbrella
policy and a $1,000,000 errors and omissions policy. The Company believes that
its present insurance coverage is adequate for the products and services
currently marketed. There can be no assurance, however, that such insurance will
be sufficient to cover potential claims arising out of its current or
contemplated operations or that the present level of coverage will be available
in the future at a reasonable cost. A partially or completely uninsured claim
against the Company, if successful and of sufficient magnitude, could have a
material adverse effect on the Company. In addition, the inability to obtain
insurance of the type and in the amounts required could generally impair the
Company's ability to market its products and services.
MANAGEMENT OF GROWTH. The Company's business plan anticipates, among
other things, significant growth in the Company's customer base and continued
development of its product and service lines. This growth and continued
development, if it materializes, could place a significant strain on the
Company's management, employees and operations. In the event of this expansion,
the Company would have to continue to implement and improve its operating
systems and to expand, train and manage its employee base. If the Company is
unable to implement and improve these operating systems and manage its employee
base effectively, the Company's results of operations could be materially
adversely affected.
HEALTH CARE REFORM. Political, economic and regulatory influences are
subjecting the healthcare industry in the United States to fundamental changes.
Potential reforms may include mandated basic healthcare benefits, controls on
healthcare spending through limitations on the growth of private health
insurance premiums and Medicare and Medicaid reimbursement, the creation of
large insurance purchasing groups and fundamental changes to the healthcare
delivery system. The Company anticipates Congress and certain state legislatures
will continue to review and assess alternative healthcare delivery systems and
payment methods and public debate of these issues will likely continue in the
future. Due to uncertainties regarding the ultimate features of reform
initiatives and their enactment and implementation, the Company cannot predict
which, if any, of such reform proposals will be adopted, when they may be
adopted or what impact they may have on the Company.
13
DEPENDENCE ON KEY PERSONNEL. The success of the Company is largely
dependent on the personal efforts of Harold S. Blue, its Chief Executive
Officer, and John Paul Guinan, its President. Although the Company has entered
into employment agreements with Messrs. Blue and Guinan, the loss of either's
services could have a material adverse effect on the Company's business or
prospects. The Company has obtained "key man" insurance on the lives of Messrs.
Blue and Guinan in the amount of $1,000,000 each. The success of the Company is
also dependent upon its ability to hire and retain qualified marketing and other
personnel. Competition for qualified personnel in the healthcare information
technology industry is intense, and there can be no assurance that the Company
will be able to hire or retain the personnel necessary for its planned
operations.
SIGNIFICANT INFLUENCE BY MANAGEMENT. As of the date of this Prospectus,
the Company's officers and directors own beneficially and of record
approximately 18.6% of the Company's outstanding Common Stock. Accordingly,
management of the Company may be able to exercise significant influence with
respect to the election of the directors of the Company and all matters
submitted to a vote by shareholders.
NO DIVIDENDS. The Company currently anticipates that it will retain all
of its future earnings, if any, for use in the expansion and operation of its
business, and does not anticipate paying any cash dividends on its Common Stock
in the foreseeable future.
POSSIBLE ANTI-TAKEOVER EFFECTS; AUTHORIZATION OF PREFERRED STOCK.
Certain provisions of the Florida Business Corporation Act contain anti-takeover
provisions which may inhibit tender offers, non-negotiated mergers or other
business combinations involving the Company. Certain of these provisions may
discourage a future acquisition of the Company, including an acquisition in
which the shareholders might otherwise receive a premium for their shares. As a
result, shareholders who might desire to participate in such a transaction may
not have the opportunity to do so. In addition, the Company's Articles of
Incorporation authorize the issuance of 2,000,000 shares of "blank check"
preferred stock with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without shareholder approval, to issue shares of
preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the value, voting power or other rights of the
holders of the Common Stock. In addition, issuance of the preferred stock could
be utilized, under certain circumstances, as a method of discouraging, delaying
or preventing a change in control of the Company which could be beneficial to
the Company's shareholders. Although the Company has no present intention to
issue any further shares of its preferred stock, there can be no assurance that
the Company will not do so in the future.
VOLATILITY OF STOCK PRICE. The market price of the Common Stock has
fluctuated substantially since the Company's initial public offering in August
1993. There can be no assurance that the market price of the Common Stock will
not significantly fluctuate from its current level. Future announcements
concerning the Company or its competitors, quarterly variations in operating
results, the introduction of new products and services or changes in
14
product pricing policies by the Company or its competitors, changes in earnings
estimates by analysts or changes in accounting policies, among other factors,
could cause the market price of the Common Stock to fluctuate substantially. In
addition, stock markets have experienced extreme price and volume volatility in
recent years. This volatility has had a substantial effect on the market prices
of securities of many smaller public companies for reasons frequently unrelated
to the operating performance of the specific companies. These broad market
fluctuations may adversely affect the market price of the Company's Common
Stock.
NASDAQ SMALLCAP MARKET DELISTING; LOW STOCK PRICE. The trading of the
Common Stock on the Nasdaq SmallCap Market is conditioned upon the Company's
meeting certain asset, capital and surplus, and stock price tests set forth by
the Nasdaq SmallCap Market. To maintain eligibility for trading on the Nasdaq
SmallCap Market, the Company will be required to maintain total assets in excess
of $2,000,000, capital and surplus in excess of $1,000,000 and (subject to
certain exceptions) a bid price of $1 per share. These eligibility requirements
are subject to change from time to time. The Company currently meets the
respective asset, capital and surplus and stock price tests set forth by the
Nasdaq SmallCap Market. If the Company at some future time were to fail any of
the applicable listing eligibility tests, the Common Stock could be delisted
from trading in the Nasdaq SmallCap Market. The effects of delisting would
include the limited release of the market price of the Common Stock and limited
news coverage of the Company. Delisting may restrict investors' interest in the
Common Stock and materially adversely affect the trading market and prices for
such Common Stock and the Company's ability to issue additional securities or to
secure additional financing. In addition to the risk of volatility of stock
prices and possible delisting, low price stocks are subject to the additional
risks of additional federal and state regulatory requirements and the potential
loss of effective trading markets. In particular, if the Common Stock were
delisted from trading on the Nasdaq SmallCap Market and the trading price of the
Common Stock were less than $5 per share, the Common Stock could be subject to
Rule 15g-9 under the Exchange Act, which, among other things, requires that
broker/dealers satisfy special sales practice requirements, including making
individualized written suitability determinations and receiving any purchaser's
written consent prior to any transaction. If the Common Stock could also be
deemed a penny stock under the Securities Enforcement and Penny Stock Reform Act
of 1990, this would require additional disclosure in connection with trades in
the Common Stock, including the delivery of a disclosure schedule explaining the
nature and risks of the penny stock market. Such requirements could severely
limit the liquidity of the Company's Common Stock and the ability of purchasers
in this Offering to sell their Common Stock in the secondary market.
SHARES ELIGIBLE FOR FUTURE SALE. The Company currently has 9,527,272
shares of Common Stock outstanding. In addition, 2,097,564 shares of Common
Stock are reserved for issuance upon the exercise of outstanding options and
warrants (including the Warrants) and 180,000 shares of Common Stock are
issuable upon the occurrence of a defined change in control of the Company.
Substantially all of the shares of Common Stock outstanding are freely
tradeable. The possibility that substantial amounts of Common Stock may be sold
in the public market could have a material adverse effect on prevailing market
prices of the Common Stock and could impair the Company's ability to raise
capital or make acquisitions through the sale of
15
its equity securities. The officers and directors of the Company, who
beneficially own an aggregate of 1,895,590 shares of Common Stock, have agreed
with the underwriters' representative for the May 1996 Offering not to sell or
otherwise dispose of any securities of the Company through November 7, 1996,
without the representative's prior written consent.
USE OF PROCEEDS
The net proceeds to be received by the Company upon the exercise of the
Warrants, assuming all of the Warrants are exercised for cash, will be $525,000.
The Company intends to use the net proceeds, if any, for working capital and
general corporate purposes. Proceeds not immediately required for the purposes
described above will be invested principally in United States government
securities, short-term certificates of deposit, money market funds or other
short-term interest-bearing investments. The Company will not receive any
proceeds from the sale of any shares of Common Stock sold by the Selling
Shareholders.
SELLING SHAREHOLDERS
The following information table sets forth information concerning the
beneficial ownership of Common Stock by the Selling Shareholders as of the date
of this Prospectus and the number of shares included for sale in this
Prospectus. Such information was furnished to the Company by the individual
Selling Shareholders.
PERCENTAGE OF
SHARES OWNED SHARES TO BE SHARES TO BE OUTSTANDING
PRIOR TO THE SOLD IN THE OWNED AFTER SHARES OWNED
NAME OFFERING OFFERING THE OFFERING AFTER OFFERING
- ---- ------------ ------------ ------------ --------------
Personal Program-
ming, Inc. 150,000(1) 150,000 0 0
Eugene R. and
Suzanne Terry 45,000(2) 15,000 30,000 *
<FN>
- ------------------------
* Represents less than one percent.
(1) Assumes the exercise of all of the Warrants. The Warrants may be assigned to affiliates of PPI.
(2) Includes 30,000 shares issuable upon the exercise of currently exercisable stock options.
</FN>
The Company has agreed to indemnify the Selling Shareholders and these
Selling Shareholders have agreed to indemnify the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act").
16
On May 31, 1996, PPI entered into the Agreement with the Company.
Pursuant to the Agreement, PPI and the Company have agreed to work together to
create a system designed to connect physicians using PPI software to the network
services provided by the Company. The Warrants were issued to PPI pursuant to
the Agreement.
Mr. Terry has been a Director of the Company since August 1995.
PLAN OF DISTRIBUTION
In the Agreement, PPI agreed not to sell or otherwise dispose of the
shares of Common Stock issuable upon exercise of the Warrants until on or after
November 4, 1996.
The Common Stock received by PPI upon exercise of the Warrants or which
is offered hereby by the other Selling Shareholders, Mr. and Mrs. Terry, may be
sold from time to time as market conditions permit in the over-the-counter
market, or otherwise, at prices and terms then prevailing or at prices related
to the then-current market price, or in negotiated transactions. The shares of
Common Stock offered hereby may be sold by one or more of the following methods,
without limitation: (a) a block trade in which a broker or dealer so engaged
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) ordinary brokerage transactions in
which the broker solicits purchasers; and (d) face-to-face transactions between
sellers and purchasers without a broker-dealer. In effecting sales, brokers or
dealers engaged by the Selling Shareholders may arrange for other brokers or
dealers to participate. Such brokers or dealers may receive commissions or
discounts from Selling Shareholders in amounts to be negotiated immediately
prior to the sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In addition, any securities
covered by this Prospectus that qualify for sale pursuant to Rule 144 under the
Securities Act might be sold under Rule 144 rather than pursuant to this
Prospectus.
The Selling Shareholders must comply with Rule 10b-6 promulgated under
the Exchange Act in connection with all resales of Common Stock issuable upon
exercise of the Warrants or otherwise offered hereby. In addition, certain
brokers or dealers, who may be deemed underwriters, may engage in passive market
making activities in the Company's Common Stock on the Nasdaq SmallCap Market in
accordance with Rule 10b-6A promulgated under the Exchange Act.
The Selling Shareholders will pay the expenses of their counsel, and
the Company will pay the other expenses of this Offering, which expenses are
estimated to be $15,000.
17
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for
the Company by Olle, Macaulay & Zorrilla, P.A., Miami, Florida.
EXPERTS
The consolidated balance sheet of the Company as of December 31, 1995,
and the related consolidated statements of operations, stockholders' equity and
cash flows of the Company for each of the two years in the period ended December
31, 1995, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (herein, together with all
amendments, if any, thereto, the "Registration Statement") under the Act with
respect to the shares of Common Stock offered by this Prospectus. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain portions of which have
been omitted as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the shares of Common Stock
offered hereby, reference is hereby made to the Registration Statement and to
the exhibits and schedules thereto, if any, which are available for inspection
at the principal office of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at 7 World
Trade Center, New York, New York 10048, and at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and copies of all
or any part thereof may be obtained from such offices, upon the payment of
prescribed fees.
18
No dealer, salesman or any other person has
been authorized to give any information or
to make any representations other than those
contained or incorporated by reference in 165,000 Shares
this Prospectus in connection with the
offering herein contained, and if given or
made, such information or representation
must not be relied upon as having been
authorized by the Company. This Prospectus
does not constitute an offer to sell or the PROXYMED, INC.
solicitation of an offer to buy any security
other than the registered securities to which
it relates, or an offer to sell or solicitation of
an offer to buy any security by any person in
any jurisdiction in which such offer or Common Stock
solicitation would be unlawful. Neither the
delivery of this Prospectus nor any sale
made hereunder shall, under any
circumstance, create an implication that there
has been no change in the facts herein set
forth since the date hereof.
TABLE OF CONTENTS PROSEPCTUS
Page
Available Information.................
Information Incorporated by
Reference...........................
The Company...........................
Summary of the Offering...............
Summary Financial Information.........
Risk Factors..........................
Use of Proceeds.......................
Selling Shareholders..................
Plan of Distribution..................
Legal Matters.........................
Experts............................... August 29,1996
Additional Information................
19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Expenses payable in connection with the issuance and distribution of
the securities being registered (estimated except in the case of the
registration fee) are as follows:
AMOUNT
------
SEC registration fee...................................... $ 676
Legal fees and expenses................................... 5,000
Accounting fees and expenses.............................. 5,000
Blue sky fees and expenses................................ 1,500
Miscellaneous............................................. 2,824
------
Total........................................... $15,000
=======
The above fees will be payable by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 607.0850(1) of the Florida Business Corporation Act (the
"FBCA") provides, in general, that a corporation shall have power to indemnify
any person who was or is a party to any proceeding (other than an action by or
in the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against liability incurred in connection with such proceeding, including an
appeal thereof, if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the corporation or, with respect to any criminal action or
proceeding had reasonable cause to believe his conduct was unlawful.
Section 607.0850(2) of the FBCA provides, in general, that a
corporation shall have power to indemnify any person who was or is a party to
any proceeding by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation or is or was serving at the request of the
corporation
II-1
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses and 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 in connection with the defense or settlement of such
proceeding including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed, to the best interests of the corporation,
except that no indemnification shall be made under this subsection in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Section 607.0850(3) of the FBCA provides, in general, that to the
extent that a director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in any defense of any proceeding referred
to in subsection (1) or subsection (2), or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses actually and reasonably
incurred by him in connection therewith.
Section 607.0850(4) of the FBCA provides, in general, that a
corporation shall have the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of such section.
Article VII of the Company's Restated Articles of Incorporation and
By-Laws give a director or officer the right to be indemnified by the Company to
the fullest extent permitted under Florida law. In addition, the Company has
contractually agreed to indemnify its directors and officers to the fullest
extent permitted under Florida law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
II-2
Item 16. Exhibits.
EXHIBIT NO. DESCRIPTION
- ---------- -----------
5 Opinion of Olle, Macaulay & Zorrilla, P.A. including its consent
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Olle, Macaulay & Zorrilla, P.A. (included in Exhibit 5
herewith)
24 Power of Attorney (included on the Signature Page on Page
II-5)
Item 17. Undertakings.
A. RULE 415. UNDERTAKINGS
----------------------
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to: (i) include any prospectus required by Section
10(a)(3) of the Act; (ii) reflect in the prospectus any facts
or events which, individually or together, represent a
fundamental change in the information in the registration
statement; and (iii) include any additional or changed
material information with respect to the plan of distribution;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to section 13
or section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for determining any liability under the Act, each
such post-effective amendment shall be deemed a new
registration statement relating to the securities offered
therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
II-3
B. INDEMNIFICATION UNDERTAKING.
---------------------------
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company 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.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
requirements of 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 Ft. Lauderdale, Florida on this 29th day of August,
1996.
PROXYMED, INC.
By:/s/ HAROLD S. BLUE
----------------------------------
Harold S. Blue, Chairman of the
Board and Chief Executive Officer
Each person whose signature appears below in this Registration
Statement hereby constitutes and appoints Harold S. Blue and Bennett Marks, and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities (until
revoked in writing) to sign any and all amendments (including post-effective
amendments and amendments thereto) to this Registration Statement on Form S-3 of
the Company and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully for all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act, this
Registration Statement was signed by the following persons in the capacities and
on the dates indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ HAROLD S. BLUE Chairman of the Board and Chief August 29, 1996
- ---------------------- Executive Officer (principal
Harold S. Blue executive officer)
II-5
/s/ JOHN PAUL GUINAN President and Director August 29, 1996
- ---------------------
John Paul Guinan
/s/ Gary N. Mansfield Executive Vice President -
- ---------------------- Business Development August 29, 1996
Gary N. Mansfield and Director
/s/ BENNETT MARKS Executive Vice President- August 29, 1996
- ---------------------- Finance, Chief Financial
Bennett Marks Officer and Director
(principal financial
and accounting officer)
/s/ HARRY A. GAMPEL Director August 29, 1996
- ----------------------
Harry A. Gampel
/s/ SAMUEL X. KAPLAN Director August 29, 1996
- ----------------------
Samuel X. Kaplan
/s/ TRAVIS J. LEONARDI Director August 29, 1996
- ----------------------
Travis J. Leonardi
/s/ BERTRAM J. POLAN Director August 29, 1996
- --------------------
Bertram J. Polan
/s/ EUGENE R. TERRY Director August 29, 1996
- ----------------------
Eugene R. Terry
II-6
EXHIBIT INDEX
LOCATED AT
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
- ---------- ----------- -------------
5 Opinion of Olle, Macaulay & Zorrilla, P.A., including
its consent
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Olle, Macaulay & Zorrilla, P.A. (included in
Exhibit 5 herewith)
24 Power of Attorney (included on the Signature Page on
Page II-5)
II-7