ELECTRONICALLY TRANSMITTED TO THE SECURITIES AND EXCHANGE COMMISSION ON
JUNE 18, 1999
REGISTRATION NO. 333-77793
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
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.)
HAROLD S. BLUE
CHAIRMAN AND 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
(Address, including zip code, and telephone number, including (Name, address, including zip code, and telephone number,
area code, of registrant's principal executive offices) including area code, of agent for service)
-----------------
COPIES OF COMMUNICATIONS TO:
FRANK M. PUTHOFF, ESQ.
EXECUTIVE VICE PRESIDENT AND SPENCER G. FELDMAN, ESQ.
CHIEF LEGAL OFFICER GREENBERG TRAURIG, P.A.
PROXYMED, INC. METLIFE BUILDING
2555 DAVIE ROAD, SUITE 110 200 PARK AVENUE, 15TH FLOOR
FORT LAUDERDALE, FLORIDA 33317 NEW YORK, NEW YORK 10166
(954) 473-1001 (212) 801-9200
------------------
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.
------------------
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. [ ]
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
SEC 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 JUNE 18, 1999
PROSPECTUS
1,968,106 SHARES
PROXYMED, INC.
COMMON STOCK
---------------
This prospectus relates to the public offering, which is not being
underwritten, of shares of common stock of ProxyMed, Inc. The selling
shareholders listed on pages 17 and 18 are selling these shares for their own
accounts. All of these shares are currently issued and outstanding.
Our common stock is traded on the Nasdaq National Market under the
symbol "PILL."
The selling shareholders may offer the shares through public or
private transactions, on or off the Nasdaq National Market, at prevailing market
prices or at privately negotiated prices.
We encourage investors to read this prospectus carefully.
---------------
Investing in the common stock involves some risk. See "Risk Factors"
beginning on page 6.
---------------
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 June __, 1999
PROXYMED, INC.
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.
TABLE OF CONTENTS
PAGE
----
About ProxyMed............................................................................................ 3
Risk Factors.............................................................................................. 6
Where You Can Find More Information....................................................................... 14
Forward-Looking Information............................................................................... 15
Use of Proceeds........................................................................................... 15
Selling Shareholders...................................................................................... 16
Plan of Distribution...................................................................................... 18
Legal Opinion ............................................................................................ 20
Experts................................................................................................... 20
2
ABOUT PROXYMED
IN GENERAL
ProxyMed, Inc. is a healthcare information services company operating
in three primary business segments:
o healthcare electronic transaction processing services and
communication devices,
o network engineering services and
o prescription drug dispensing.
HEALTHCARE ELECTRONIC TRANSACTION PROCESSING SERVICES AND COMMUNICATION
DEVICES
We provide healthcare electronic transaction processing services and
related software products to physicians, independent physician associations,
insurance companies, managed care organizations, pharmacies, commercial and
hospital laboratories and nursing homes. Our electronic transaction processing
services support a broad range of both financial and clinical transactions. To
facilitate these services, we have developed and operate ProxyNet,/trademark/
our proprietary national electronic healthcare information network, which
provides physicians and other primary care providers with direct connectivity to
the industry's second largest list of payers, the largest list of chain and
independent pharmacies and the largest list of clinical laboratories.
The healthcare industry generates billions of financial and clinical
transactions each year, including prescription orders, refill authorizations,
lab 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.
Physicians control most healthcare decisions and are a center point for
patient-related financial and clinical transactions generated each year. Because
of our broad range of both financial and clinical transaction capabilities, we
are positioned to provide "one-stop shopping" for all of a physician's
electronic transaction processing needs. ProxyMed's goal is to become the
nation's leading provider of physician office connectivity and transaction
processing services.
To gain access to the greatest number of physicians, we utilize the
following sales and distribution channels for our healthcare electronic
transaction processing and communication devices segment:
3
DISTRIBUTION CHANNEL FOCUS IMPLEMENTATION
- -------------------- ----- --------------
ProxyMed Software and ProxyMed has a direct sales force that Software and Communication Products:
Communication Devices - serves physicians, payers, pharmacies and labs. Financial - EZ-Claims software
Direct Sales ProxyMed licenses its proprietary software Pharmacy - PreScribe software
products for use on physician desktops for Lab - ClinScan software and systems
access to ProxyNet, transaction creation and Lab - Kit series of intelligent
communication between healthcare printers
participants. Nursing home - ProxyCare software
Electronic Commerce ProxyMed has established its electronic Agreements:
Partners commerce partner program to work with the IDX Systems Corporation
nation's leading providers of physician desktop Medical Manager Corp.
software, so that they may enable their existing Eclipsys Corporation
applications to communicate through ProxyNet Epic Systems Corporation
to payers, pharmacies and labs.
Gateway Agreements ProxyMed connects other electronic Gateways:
transaction processing networks to ProxyNet Kinetra
so that the participants on both networks can National Data Corp.
communicate with each other.
Internet/World Wide ProxyMed is establishing itself as an Services Planned for Release by fall 1999:
Web Application Service Provider of financial Lab Results Reporting
and clinical electronic transaction processing Prescription Refill Authorization
services hosted on the web, which may be
accessed by any physician with an internet
connection.
Physicians and nursing homes, which we describe as "front-end"
customers, pay recurring network access and database subscription fees, as well
as software license, purchases and service fees for our desktop equipment,
software and communication devices. Payers, laboratories and pharmacies, which
we describe as "back-end" customers, pay for transaction processing services on
a per transaction basis.
We generated a significant portion of our revenues from our other
business segments in prior years. In 1998, however, the electronic transaction
processing and communication devices segment accounted for the majority of our
revenues and is expected to increase as a percentage of revenues in 1999.
NETWORK ENGINEERING SERVICES
We provide client-server software development services, internet access
services and commercial software packages to public and private sector
organizations. We also sell and support a variety of systems integration
products and services from major network equipment manufacturers in a variety of
technological niches, including hubs, routers, switches, remote access devices,
servers, storage devices and network operating systems. This division is a full
service internet access provider with network facilities in Tallahassee, Tampa
and Fort Myers, Florida. We purchase computer hardware products for resale from
a variety of suppliers and are not dependent upon any one supplier.
4
PRESCRIPTION DRUG DISPENSING
Our wholly-owned subsidiary, ProxyCare, Inc., is a pharmacy business
which dispenses and delivers unit dose oral prescription drugs to patients
residing in long-term care facilities, primarily in assisted care living
facilities in South Florida. Prescriptions are delivered monthly to such
facilities utilizing a variety of packaging systems, including
"Medicine-On-Time," which is a packaging system that permits the dispensing of
multiple prescriptions to nursing home patients. We have considered from time to
time selling this subsidiary, but have no current agreements or understandings
in this regard.
ACQUISITION PROGRAM
Since 1997, we have completed the following mergers and acquisitions:
o In March 1997, we acquired substantially all of the assets of
Clinical MicroSystems, Inc., a clinical laboratory software company.
o In April 1997, we acquired substantially all of the assets of Hayes
Computer Systems, Inc., a network engineering services company.
o In June 1997, we acquired from Walgreen Co., owner of the Walgreen's
pharmacy chain, the proprietary electronic prescription software
known as PreScribe.
o In November 1997, we acquired substantially all of the assets of US
HealthData Interchange, Inc., a provider of healthcare financial
electronic transaction processing services.
o In May 1998, we acquired all of the capital stock of WPJ, Inc., which
did business as Integrated Medical Services, also a provider of
healthcare financial electronic transaction processing services.
o In December 1998, we acquired all of the capital stock of Key
Communications Service, Inc., a provider of clinical laboratory
printer and communication devices.
o In January 1999, we acquired the electronic transaction processing
assets of Specialized Medical Management, Inc., also a provider of
healthcare financial electronic transaction processing services.
We have also hired Salomon Smith Barney as our financial advisor to
explore other possible strategic alternatives to raise shareholder value. During
the last several months, ProxyMed has been in discussions with a few unrelated
parties in this regard. No assurance can be given as to when or if ProxyMed will
enter into any agreement as a result of these discussions.
* * * * *
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.
5
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 CAN
HAVE A DETRIMENTAL EFFECT ON THE LONG-TERM CAPITAL APPRECIATION OF OUR STOCK
We have incurred substantial losses, including losses of $11,788,000,
$18,517,000 and $2,854,000 for the fiscal years ended December 31, 1998, 1997
and 1996, respectively. The fiscal 1998 loss included charges for acquired
in-process research and development technology totaling $743,000 resulting from
the Hayes Computer Systems acquisition. As of March 31, 1999, we had an
accumulated deficit of $45,597,000. We expect to continue to incur substantial
losses in the foreseeable future. We can give no assurance that we will ever
achieve profitable operations. This could have a detrimental effect on the
long-term capital appreciation of our stock.
IF WE CANNOT OBTAIN NEEDED FUNDING BY THE END OF AUGUST 1999, WE MAY HAVE TO
CURTAIL OUR OPERATIONS, SELL SOME OF OUR ASSETS OR TAKE ACTIONS THAT MAY DILUTE
YOUR FINANCIAL INTEREST.
Our funding needs for acquisitions and the development, marketing and
sale of our products and services are significant. For example, under the Hayes
Computer Systems acquisition agreement, we are required to pay $1,000,000 on or
before June 30, 1999, and under the Clinical MicroSystems acquisition agreement,
we are required to pay $750,000 on or before April 30, 2000. Each of these
future payments, to the extent required, must be paid at least half in cash,
with the balance, if any, paid by delivering unregistered shares of our common
stock valued at the then market price. Also, under our agreement for the
acquisition of PreScribe, we agreed to pay Walgreen's $500,000 in cash in each
of June 1999 and 2000. We believe, based upon our current plans and assumptions,
which includes increased expenditures for research and development, that our
existing cash reserves and expected cash receipts will provide the funds
necessary to satisfy these cash requirements through at least August 1999. As a
result, we realize that we must seek additional financing to fund our business
operations research and development activities and acquisitions after August
1999. At this time, however, we have no arrangements for, or sources of,
additional financing. We can give no assurance that additional funds will be
available when we need or, if available to us, will be available on terms
acceptable to our management. We also note that any such additional financing
may result in dilution to current shareholders. If needed financing is not
obtained, we may be forced to reduce certain planned expenditures, curtail our
operations or sell some of our assets.
WE DEPEND ON CONNECTIONS TO INSURANCE COMPANIES AND OTHER PAYERS, AND IF WE LOSE
THESE CONNECTIONS OUR BUSINESS COULD SUFFER
Our business is enhanced by the substantial number of payers, such as
insurance companies, Medicare and Medicaid agencies, laboratories and
pharmacies, to which we have electronic connections. These connections may
either be made directly or through a clearinghouse or other intermediary. 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 payers with whom we currently have connections. In
addition, we cannot assure that we will be able to develop new connections,
either directly or through clearinghouses, on satisfactory terms, if at all.
Lastly, certain third-party payers provide systems directly to healthcare
providers, bypassing third-party processors such as us. Our failure to maintain
our existing connections with
6
payers and clearinghouses or to develop new connections as circumstances
warrant, or an increase in the utilization of direct links between providers and
payers, could cause our business to suffer.
EVOLVING INDUSTRY STANDARDS AND RAPID TECHNOLOGICAL CHANGES COULD RESULT IN OUR
PRODUCTS BECOMING OBSOLETE AND NO LONGER IN DEMAND
Rapidly changing technology, evolving industry standards and the
frequent introduction of new and enhanced services characterize the market for
our products and services. Our success will depend upon our ability to enhance
our existing services, to introduce new products and services on a timely and
cost-effective basis to meet evolving customer requirements, to achieve market
acceptance for new products or services and to 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 business to suffer.
THE ACCEPTANCE OF ELECTRONIC TRANSACTION PROCESSING IN THE HEALTHCARE INDUSTRY
IS STILL IN ITS EARLY STAGES AND, 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 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 market.
We cannot assure that continued conversion from paper-based transaction
processing to electronic transaction processing in the healthcare industry will
occur or that, to the extent it does occur, healthcare providers and payers will
use independent processors such as us. Furthermore, 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. If competition causes us to
reduce our pricing in order to retain market share, our business could suffer.
FAILURE TO SUCCESSFULLY INTEGRATE ACQUISITIONS AND REDUCE OUR OPERATING EXPENSES
COULD CAUSE OUR FUTURE FINANCIAL RESULTS TO SUFFER
The successful integration of the businesses we have acquired and will
acquire is critical to our success. Integrating the management and operations of
these businesses is time consuming, and we cannot guarantee we will achieve any
of the anticipated synergies and other benefits expected to be realized from the
acquisitions. Although we have not experienced any material difficulties
integrating operations in our previous acquisitions, we may face any one or more
of the following difficulties:
o difficulty integrating the financial, operational and administrative
functions of acquired businesses, especially those as large as us;
o difficulty integrating the products and services of acquired
businesses with our own offerings;
7
o delays in realizing the benefits of our strategies for an acquired
business which fails to perform in accordance with expectations;
o diversion of management's attention from our existing operations
since acquisitions often require substantial time of our management;
o accounting for amortization of acquired intangible assets which
impacts our financial performance going-forward;
o inability to retain key employees necessary to continue the
operations of the acquired businesses due to their perceived lack of
ongoing independence; and
o acquiring businesses with unknown liabilities, problems related to
the Year 2000, software bugs or adverse litigation and claims.
Any failure to successfully integrate acquisitions and reduce operating
expenses could cause our future financial results to suffer and could hinder our
ability to acquire other businesses or otherwise execute our growth strategy.
OUR BUSINESS COULD SUFFER IF COMMERCIAL USERS DO NOT ACCEPT OUR NEW INTERNET
ELECTRONIC TRANSACTION PROCESSING SOLUTIONS
Our new distribution strategy depends on the adoption of our internet
electronic transaction processing solutions by physicians and physician offices.
Our business could suffer dramatically if internet solutions in the healthcare
sector are not accepted or not perceived to be effective. The internet may prove
not to be a viable commercial marketplace for a number of reasons, including:
o inadequate development of the necessary infrastructure for
communication speed, access and server reliability;
o security and confidentiality concerns;
o lack of development of complementary products, such as high-speed
modems and high-speed communication lines;
o implementation of competing technologies;
o delays in the development or adoption of new standards and protocols
required to handle increased levels of internet activity; and
o possible governmental regulation.
We expect internet use to grow in number of users and volume of
traffic. The internet infrastructure may be unable to support the demands placed
on it by this continued growth. Growth in the demand for our new internet
applications and services depends on the adoption of internet solutions by
healthcare participants, which requires the acceptance of a new way of
conducting business and exchanging information. The healthcare industry, in
particular, relies on legacy systems that may be unable to benefit from our new
internet-based platform. Customers
8
using legacy and client-server systems may refuse to adopt our new
internet-based systems when they have made extensive investment in hardware,
software and training for older systems, which would cause our business to
suffer.
PROPOSED HEALTHCARE LEGISLATION AND CHANGES TO EXISTING LAWS COULD CAUSE OUR
BUSINESS TO SUFFER IN THE FUTURE
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 changes. 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; and
o fundamental changes to the healthcare delivery system.
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 by the Year 2000. HIPAA specifically designates clearinghouses
(including us and other financial network operators) as the compliance
facilitators for healthcare providers and payers. Clearinghouses are given the
freedom to utilize non-standard transactions and convert them to the mandated
standards on behalf of their customers. We intend to comply with the mandated
standards as soon as practicable after they have been adopted and published.
However, the success of our compliance efforts may be dependent on the success
of providers, payers and others in dealing with the standards.
We anticipate Congress and some 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 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, and it
is possible that the impact they have on us could cause our business to suffer.
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. We are also aware that other transaction processing companies have
targeted this industry for growth, including the development of new technologies
utilizing an internet-based system. 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.
9
We also believe that most physicians will ultimately subscribe to only
one electronic transaction processing service provider. Consequently, it is our
belief that the key to competitive success will be our ability to control
physicians' desktops by offering a comprehensive set of electronic financial and
clinical transactions and locking in the physicians to mutually beneficial
long-term agreements. However, we cannot assure that we will win this race to
provide "one-stop shopping," or that this belief about physicians' preference
for "one-stop shopping" will prove correct. Due to advances in technology,
changes in attitudes and other factors, physicians may ultimately prefer to use
multiple electronic transaction processing services and may elect to change
their electronic transaction processing services frequently rather than settling
long-term for one provider. If this were to happen, our business could suffer.
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 MAY NEVER DO SO
For the marketing and sale of some of our clinical products and
services, we entered into important business relationships with other companies,
through our electronic commerce partner program with physician office management
information system vendors and electronic medical record vendors and through
other agreements. These important business relationships, which have required
and will 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 partner 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, our business could suffer.
WE DEPEND ON GOVERNMENT SALES CONTRACTS WITH THE STATE OF FLORIDA FOR A LARGE
PART OF OUR TOTAL SALES BUT THESE CONTRACTS MAY BE CANCELLED AT ANY TIME
In fiscal 1998, approximately 87% of our network engineering revenues
were to agencies and departments of the State of Florida, and these revenues
represented approximately 32% of total revenues for fiscal 1998. In fiscal 1997,
approximately 91% of our network engineering services division revenues were to
agencies and departments of the State of Florida, representing approximately 65%
of total revenues for 1997. The State of Florida typically awards contracts on
an annual fiscal-year basis with early cancellation rights, and renewal of these
contracts will depend on many factors outside our control, including competitive
factors, changes in government personnel making contract decisions and political
factors. Although we are not aware of any decision by the state to discontinue
doing business with us, the loss or non-renewal of these government contracts
would cause our business to suffer.
10
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 clinical transaction products and services and our electronic transaction
processing network, which we believe efficiently perform the principal functions
for which they have 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 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, all of which could cause our business to suffer.
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
uncertain 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 expenses. The occurrence of any one of these
events could cause our business to suffer.
WE DEPEND ON UNINTERRUPTED COMPUTER ACCESS FOR OUR CUSTOMERS, WHICH WE CANNOT
GUARANTEE
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. Although we plan to develop back-up
site capability and have 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 that causes prolonged interruptions in our
operations could have a significant adverse effect on our business. 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 DEVELOP NEW TECHNOLOGIES THAT ARE ACCEPTABLE TO OUR
CUSTOMERS WHICH COULD CAUSE OUR LONG-TERM COMMERCIAL PROSPECTS TO SUFFER
The market for our products and services is characterized by ongoing
technological development and evolving industry standards, including
internet-based systems. Our success will depend on our ability to enhance
current products and services and introduce new products and services that
address
11
technological and market developments and satisfy the increasingly sophisticated
needs of our customers. We cannot assure that we will be successful in
developing, acquiring 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 our new products and services will be
accepted by customers. From time to time, we or our competitors may announce new
products, services or technologies that have the potential to replace our
existing products, services and technologies. We cannot assure that the
announcement of new products, services or technologies will not cause customers
to defer purchases of our existing products and services, which could cause our
business to suffer.
FAILURE OF OUR CUSTOMERS AND BUSINESS PARTNERS TO BE YEAR 2000 COMPLIANT COULD
CAUSE OUR BUSINESS TO SUFFER
We are in the final stages of testing all of our products, systems and
equipment for potential Year 2000 problems. Despite testing by us and our
customers, our products, systems and equipment may contain undetected errors or
defects associated with Year 2000 date functions that could result in delay or
loss of revenue, diversion of development resources, damage to our reputation or
increased service and warranty costs, any of which could cause our business to
suffer. Some commentators have predicted significant litigation regarding Year
2000 compliance issues. Because of the unprecedented nature of such litigation,
it is uncertain whether or to what extent it may impact us. To the extent that
we are not able to test the technology provided by third-party vendors, we have
requested representations from key vendors and our service providers that their
systems are Year 2000 compliant. Although we are not aware of any significant
operational issues or costs associated with preparing our internal systems for
the Year 2000, we may experience significant unanticipated problems and costs
caused by undetected errors or defects in the technology used in our internal
systems, which include our own software and hardware technology. We have
notified customers of our Year 2000 readiness plan and their responsibility to
assure that their own systems are Year 2000 compliant. We do not have
information concerning their Year 2000 compliance status. As is the case with
other similarly-situated companies, if our customers or electronic commerce
partners or their end-users fail to achieve Year 2000 compliance or divert
technology expenditures to address Year 2000 compliance problems, our business
could suffer.
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 federal trademark registrations for ProxyScript, ClinScan
and ProxyCare have filed trademark applications for PreScribe, ProxyNet and
RxReceive. We have no patents. 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, software developers may become increasingly
subject to infringement claims. Any such claims, with or without merit, could
result in costly litigation or might require us to enter into royalty or
licensing agreements. Such royalty or licensing agreements, if required, may not
be available
12
on terms acceptable to us or at all. Any successful infringement claim could
cause our business to suffer.
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. Because many of our products and services relate to prescribing drugs
and filling prescriptions, and 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, could cause our business to suffer. Also, the inability to
obtain insurance of the type and in the amounts we require could generally
impair our ability to market our products and services.
WE MAY NOT BE ABLE TO RETAIN OUR KEY PERSONNEL OR ATTRACT QUALIFIED PERSONNEL
WHO WE NEED TO SUCCEED
Our success is largely dependent on the personal efforts of Harold S.
Blue, our Chairman and Chief Executive Officer, John Paul Guinan, our
Co-President, Danny Hayes, President of our Hayes Computer Systems Division, and
Jeff K. Carpenter, President and Chief Executive Officer of Key Communications,
our subsidiary. Although we have entered into employment agreements with these
and a few other senior executives, the loss of any of their services could cause
our business to suffer. We have obtained for our benefit "key person" insurance
on the lives of Messrs. Blue and Guinan in the amount of $1,000,000 each. Our
success is also dependent upon our ability to hire and retain qualified
marketing, 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.
OUR MANAGEMENT AND BELLINGHAM OWN A SUBSTANTIAL AMOUNT OF OUR STOCK AND ARE
CAPABLE OF INFLUENCING OUR AFFAIRS
As of the date of this prospectus, our officers and directors
beneficially own approximately 25.2% of our outstanding common stock, and
Bellingham Industries Inc., an offshore investment fund, beneficially owns
approximately 35.7% of our outstanding common stock. As a result, these
shareholders substantially influence the management and affairs of ProxyMed and,
if acting together, control most matters requiring the approval by our
shareholders including the election of directors, any merger, consolidation or
sale of all or substantially all of our assets and any other significant
corporate transactions. The concentration of ownership may delay or prevent a
change of control of ProxyMed at a premium price.
OUR CORPORATE CHARTER CONTAINS AUTHORIZED, UNISSUED PREFERRED STOCK WHICH, IF
ISSUED, MAY INHIBIT A TAKEOVER AT A PREMIUM PRICE THAT MAY BE BENEFICIAL TO OUR
SHAREHOLDERS
Our Articles of Incorporation authorize the issuance of 2,000,000
shares of "blank check" preferred stock with such designations, rights and
preferences as our Board of Directors may determine from time to time. None of
these preferred shares are outstanding as of the date of this prospectus.
Without shareholder approval, our Board of Directors is empowered to issue
shares of our preferred stock with dividend, liquidation, conversion, voting and
other rights that could lessen the value, voting power or other rights of
holders of common stock. Also, issuance of shares of our
13
preferred stock could be utilized, under some circumstances, as a method of
discouraging, delaying or preventing a change of control of this company at a
premium price which would be beneficial to our shareholders. Although we have no
present intention to issue any shares of our preferred stock, we cannot assure
that we will not do so in the future.
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.
Potential investors who anticipate a need for dividends should not invest in
this 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. In 1998, for example, the closing market price of our shares
ranged from a low of $5.25 per share to a high of $17.13 per share, and during
1999, our closing share price has ranged from a low of $8.50 per share to a high
of $19.50 per share. Future announcements concerning 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. Also, 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 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.
SALES OF SHARES UNDERLYING OUR STOCK OPTIONS AND WARRANTS MAY DEPRESS THE PRICE
OF OUR COMMON STOCK
As of the date of this prospectus, we had outstanding stock options and
warrants to purchase an aggregate of 2,923,210 shares of our common stock at
exercise prices ranging from $3.06 to $13.63 per share. Stock options and
warrants to purchase 2,247,370 shares are vested as of this date. Holders of
these options are likely to exercise them, if at all, at a time when they could
otherwise obtain a price for the sale of shares of our common stock that is
higher than the option exercise price. Such exercise or the possibility of such
exercise may impede us if we later seek financing through the sale of additional
securities. Under pending shelf registration statements, holders may resell a
substantial number of the shares into which the stock options and warrants are
exercisable. Sales of common stock made under the shelf registrations or Rule
144, or otherwise, may have a depressive effect on the then prevailing market
price of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with 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.
14
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 the following documents listed below and any future
filings we will 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,
1998, as amended by Amendment No. 1;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, as amended by Amendment No. 1;
(3) Our Current Report on Form 8-K dated December 31, 1998 (relating to
the Key Communications merger);
(4) Our Current Report on Form 8-K dated May 19, 1998 (relating to the
Integrated Medical Services acquisition);
(5) Our definitive Proxy Statement, dated May 21, 1998, filed in
connection with our 1998 Annual Meeting of Shareholders; and
(6) The description of our common stock contained in our Registration
Statement on Form 8-A filed with the SEC under Section 12 of the
Exchange Act, which was declared effective August 5, 1993,
including any amendments or reports filed for the purpose of
updating the description.
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: Frank M. Puthoff, Esq.
Executive Vice President and
Chief Legal Officer
Tel: (954) 473-1001, ext. 300
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. Actual results could
differ materially from those projected in the forward-looking statements as a
result of the risk factors beginning on page 6 and others detailed from time to
time in our periodic reports filed with the SEC.
15
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 $40,000.
SELLING SHAREHOLDERS
GENERAL
Jeff K. Carpenter, A. Thomas Hardy and Carl W. Garmon received their
shares of ProxyMed common stock in our December 1998 merger with Key
Communications. They are the former stockholders of Key Communications. Each of
them has remained with Key Communications following the merger and has retained
his respective title. Jeff K. Carpenter continues to be the President and Chief
Executive Officer of Key Communications, while A. Thomas Hardy and Carl W.
Garmon continue to be its Executive Vice President and Chief Financial Officer
and its Executive Vice President of Marketing, respectively.
None of the selling shareholders has held any position or office or had
any other material relationship with ProxyMed (other than Messrs. Carpenter,
Hardy and Garmon in connection with and following the Key Communications merger)
within the past three years. All of the selling shareholders are participating
in this offering pursuant to contractual registration rights previously granted
to them. We have agreed to file and maintain the effectiveness of the
registration statement (of which this prospectus forms a part) and to pay all
fees and expenses incident to the registration of this offering, including all
registration and filing fees, all fees and expenses of complying with state blue
sky or securities laws, all costs of preparation of the registration statement
and fees and disbursements of our counsel and independent public accountants.
SELLING SHAREHOLDER TABLE
The table below lists, in each case as of June 15, 1999:
1. the name of each selling shareholder;
2. the number of shares each selling shareholder beneficially owns;
3. how many shares of common stock the selling shareholder may resell
under this prospectus; and
4. assuming each selling shareholder sells all the shares listed next
to its name, how many shares of common stock each selling
shareholder will beneficially own after completion of the offering.
Beneficial ownership is determined in accordance with rules promulgated
by the SEC, and the information is not necessarily indicative of beneficial
ownership for any other purpose. This table is based upon information supplied
to us by officers, directors and principal shareholders. Except as otherwise
indicated, ProxyMed believes that the persons named in the table have sole
voting and investment power with respect to all shares of the common stock shown
as beneficially owned by them, subject to community property laws where
applicable.
16
We may amend or supplement this prospectus from time to time in the
future to update or change this list of selling shareholders and shares which
may be resold.
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING SHARES THAT MAY BE AFTER THE OFFERING
-------------------- SOLD IN THE ----------------------
SELLING SHAREHOLDER SHARES PERCENT OFFERING SHARES PERCENT
- ------------------- ------ ------- ------------------ ------ -------
Jeff K. Carpenter 624,119 3.4% 550,119 74,000 *
2633 Grant Line Road
New Albany, Indiana 47151
A. Thomas Hardy 624,118 3.4% 550,118 74,000 *
2633 Grant Line Road
New Albany, Indiana 47151
Carl W. Garmon 624,119 3.4% 550,119 74,000 *
2633 Grant Line Road
New Albany, Indiana 47151
Gerald B. Cramer 1997 Charitable 56,292 * 52,959 3,333 *
Remainder Unitrust
Gerald B. Cramer, Trustee
Cramer Rosenthal McGlynn LLC
707 Westchester Avenue
White Plains, NY 10604
Gerald and Daphna Cramer 1997 56,292 * 52,959 3,333 *
Charitable Remainder Unitrust
Gerald B. Cramer, Trustee
Cramer Rosenthal McGlynn LLC
707 Westchester Avenue
White Plains, NY 10604
Siam Partnership II 17,652 * 17,652 - -
c/o JF Shea & Co., Inc.
655 Brea Canyon Road
P.O. Box 489
Walnut, CA 91789
Tahoe Partnership I 17,652 * 17,652 - -
c/o JF Shea & Co., Inc.
655 Brea Canyon Road
P.O. Box 489
Walnut, CA 91789
17
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING SHARES THAT MAY BE AFTER THE OFFERING
-------------------- SOLD IN THE ----------------------
SELLING SHAREHOLDER SHARES PERCENT OFFERING SHARES PERCENT
- ------------------- ------ ------- ------------------ ------ -------
E&M RP Trust 17,652 * 17,652 - -
c/o JF Shea & Co., Inc.
655 Brea Canyon Road
P.O. Box 489
Walnut, CA 91789
Michael Bollag 52,959 * 52,959 - -
c/o Comsup, Inc.
7 East Mission, Suite B
Santa Barbara, CA 93101
BNB Associates Investments, LP 52,959 * 52,959 - -
c/o Benjamin Bollag
3208 Campanil Drive
Santa Barbara, CA 93109
Robert Priddy 52,958 * 52,958 - -
c/o Commonwealth Associates
830 Third Avenue
New York, NY 10022
- -------------------------
* Less than one percent.
The shares of our common stock owned by each of Messrs. Carpenter,
Hardy and Garmon before the offering include 30,000 previously registered shares
of our common stock, as well as stock options to purchase 44,000 shares of our
common stock, all of which are currently exercisable.
PLAN OF DISTRIBUTION
The selling shareholders, including any donee, pledgee or other
successor in interest who is selling shares received from a named selling
shareholder after the date of this prospectus, or their designated agents,
dealers or underwriters, may sell shares of our common stock in one or more
transactions, which may involve block transactions,
1. on the Nasdaq National Market,
2. on such other markets or exchanges on which our common stock may
from time to time be trading,
3. in privately-negotiated transactions,
4. through the writing of options on the shares of common stock or
short sales or
5. through any combination of these methods.
18
Sales may be at market prices at the time of sale, at prices related to
the market price or at negotiated prices. A selling shareholder may also attempt
to sell shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then current market
price. Some or all of the shares of common stock offered by this prospectus may
not be sold by the selling shareholders. There is no agreement between us and
the selling shareholders that restricts their right to sell shares of our common
stock at any time.
Offers to purchase the common stock may be solicited directly by the
selling shareholders or by brokers, dealers or agents designated by the selling
shareholders from time to time. Any such broker, dealer or agent, which may be
deemed to be an "underwriter" as that term is defined under the Securities Act,
involved in the offer or sale of the common stock pursuant to which this
prospectus is delivered, to the extent required, will be named, and any
applicable commissions or discounts with respect to the offer will be set forth,
in an amended or supplemented prospectus. Unless otherwise indicated in an
amended or supplemented prospectus, any such broker, dealer or agent will be
acting on a best efforts basis for the period of its appointment. The selling
shareholders cannot presently estimate the amount of commissions or discounts,
if any, that will be paid by them on account of their sale of common stock from
time to time.
Also, the selling shareholders and any other persons participating in
the sale or distribution of the shares of common stock will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder. These provisions may limit the timing of purchases and sales of any
shares of common stock by the selling shareholders or any other such person.
This may affect the marketability of the shares of common stock.
ProxyMed has agreed to indemnify the named selling shareholders against
liabilities they may incur because of an untrue or alleged untrue statement of a
material fact contained in this prospectus or the omission or alleged omission
to state in the prospectus a material fact required to be stated in the
prospectus, or necessary to make the statements in this prospectus not
misleading. However, we will not be required to indemnify any selling
shareholder for liabilities that we incur based on our reliance on written
information that the selling shareholder has furnished to us expressly for use
in this prospectus. Likewise, the selling shareholders have agreed to indemnify
ProxyMed against liabilities that we incur as a result of any statement or
omission made in this prospectus based on written information that the selling
shareholder has provided us for use in this prospectus. None of Messrs.
Carpenter, Hardy or Garmon, however, will be liable to us for amounts in excess
of the net proceeds from the sale of 10% of the number of shares each received
in the acquisition and are registered for resale pursuant to this prospectus.
We have agreed to use our best efforts to keep the registration
statement, of which this prospectus constitutes a part, effective until the
earlier of 18 months or when the selling shareholders have sold all of the
shares of their registered common stock pursuant to an effective registration
statement and delivery of this prospectus and, when applicable, in accordance
with Rule 144 under the Securities Act.
If we are notified by a selling shareholder that any arrangement has
been made with a broker-dealer for the sale of shares of our common stock
through a block trade using one of the methods listed above, a supplement to
this prospectus will be filed, if required, disclosing:
o the name of each selling shareholder and of the participating
broker-dealer(s),
o the number of shares involved,
19
o the price at which such shares were sold,
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
o that such broker-dealers(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus and
o other facts material to the transaction.
In addition, if we are notified by a selling shareholder that a donee,
pledgee or other successor in interest intends to sell more than 500 shares of
our common stock, a supplement to this prospectus will be filed.
LEGAL OPINION
Greenberg Traurig, P.A., New York, New York and Miami, Florida, will
issue for us an opinion about the legality of the shares.
EXPERTS
The consolidated balance sheets of ProxyMed as of December 31, 1998 and
1997, and the related consolidated statements of operations, stockholders'
equity and cash flows of ProxyMed for each of the three years in the period
ended December 31, 1998, that are incorporated by reference in this prospectus
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on that firm's authority as experts in
accounting and auditing.
The balance sheets of Integrated Medical Services as of December 31,
1997 and 1996, and the related statements of operations, shareholders' equity
and cash flows of Integrated Medical Services for each of the three years in the
period ended December 31, 1997, that are incorporated by reference in this
prospectus have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on that firm's
authority as experts in accounting and auditing.
The balance sheets of Key Communications as of April 30, 1998 and 1997,
and the related statements of income, stockholders' equity and cash flows for
the years then ended, that are incorporated by reference in this prospectus have
been so incorporated in reliance on the report of McCauley, Nicolas & Company,
LLC, independent accountants, given on that firm's authority as experts in
accounting and auditing.
20
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.......................................................... $ 8,412
Accounting fees and expenses.................................................. 11,000
Legal fees and expenses....................................................... 16,000
Miscellaneous expenses........................................................ 4,588
-------
Total................................................................ $40,000
=======
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 in 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 DOCUMENT
- ------------ -----------------------
2.1 Stock Purchase Agreement, dated April 24, 1998, between ProxyMed, Inc. and WPJ, Inc. (1)
2.2 Merger Agreement, dated as of December 30, 1998, between ProxyMed, Inc., ProxyMed Acquisition Corp.
and Key Communications Service, Inc. (2)
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Greenberg Traurig, P.A. (included in the opinion filed as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP (ProxyMed).
23.3 Consent of PricewaterhouseCoopers LLP (WPJ).
23.4 Consent of McCauley, Nicolas & Company, LLC (Key).
24.1 Power of Attorney (set forth on signature page of the Registration
Statement).
- --------------------
(1) Incorporated by reference to the exhibits filed with Current Report on
Form 8-K dated May 19, 1998.
(2) Incorporated by reference to the exhibits filed with Current Report on
Form 8-K dated December 31, 1998.
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 Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fort Lauderdale, State of Florida, on
June 16, 1999.
PROXYMED, INC.
By: /s/ HAROLD S. BLUE
----------------------------------
Harold S. Blue
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been 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 June 16, 1999
- ---------------------------- Chief Executive Officer
Harold S. Blue (principal executive officer)
/s/ JOHN PAUL GUINAN* Co-President and Director June 16, 1999
- ----------------------------
John Paul Guinan
/s/ BENNETT MARKS Co-President, June 16, 1999
- ---------------------------- Chief Financial
Bennett Marks Officer and Director
(principal financial
and accounting officer)
/s/ PETER A. A. SAUNDERS* Director June 16, 1999
- ----------------------------
Peter A.A. Saunders
/s/ SAMUEL X. KAPLAN* Director June 16, 1999
- ----------------------------
Samuel X. Kaplan
/s/ KEVIN E. MOLEY Director June 16, 1999
- ----------------------------
Kevin E. Moley
/s/ BERTRAM J. POLAN* Director June 16, 1999
- ----------------------------
Bertram J. Polan
/s/ EUGENE R. TERRY* Director June 16, 1999
- ----------------------------
Eugene R. Terry
*By: /s/ FRANK M. PUTHOFF
------------------------
Attorney-in-Fact
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF DOCUMENT PAGE
- ------------ ----------------------- ----
2.1 Stock Purchase Agreement, dated April 24, 1998, between ProxyMed, Inc. and
WPJ, Inc. (1)
2.2 Merger Agreement, dated as of December 30, 1998, between ProxyMed, Inc.,
ProxyMed Acquisition Corp. and Key Communications Service, Inc. (2)
5.1 Opinion of Greenberg Traurig, P.A.
23.1 Consent of Greenberg Traurig, P.A. (included in the opinion filed as Exhibit
5.1).
23.2 Consent of PricewaterhouseCoopers LLP (ProxyMed).
23.3 Consent of PricewaterhouseCoopers LLP (WPJ).
23.4 Consent of McCauley, Nicolas & Company, LLC (Key).
24.1 Power of Attorney (set forth on signature page of the Registration Statement).
- --------------------
(1) Incorporated by reference to the exhibits filed with Current Report on
Form 8-K dated May 19, 1998.
(2) Incorporated by reference to the exhibits filed with Current Report on
Form 8-K dated December 31, 1998.