Electronically Transmitted to the Securities and Exchange Commission on
June 20, 2001
Registration No. 333-60500
================================================================================
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.)
Michael K. Hoover
Chief Executive Officer
ProxyMed, Inc.
2555 Davie Road, Suite 110 2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317 Fort Lauderdale, Florida 33317
(954) 473-1001 (954) 473-1001
(Name, address, including zip code, and (Name, address, including zip code,
telephone number, including area code, and telephone number, including
of registrant's principal executive offices) area code, of agent of service)
____________
Copies of communications to:
Frank M. Puthoff, Esq. Steven Sonberg, Esq.
Executive Vice President and Holland & Knight LLP
Chief Legal Officer 701 Brickell Avenue
ProxyMed, Inc. Suite 3000
2555 Davie Road, Suite 110 Miami, Florida 33131
Fort Lauderdale, Florida 33317 (305) 374-8500
(954) 473-1001
____________
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
The information in this Prospectus is not complete and may be changed. The
selling shareholders may not sell the securities offered by this Prospectus
until the registration statement filed with the Securities and Exchange
Commission is effective. This Prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JUNE 20, 2001
PROSPECTUS
Shares
[LOGO] Proxy Med
Common Stock
__________
This Prospectus relates to up to 3,282,423 shares of Common Stock of
ProxyMed, Inc. which may be sold from time to time by the selling shareholders
listed on page 13, or their transferees, pledgees, donees or successors.
The selling shareholders may sell all or any portion of their shares of
Common Stock in one or more transactions through ordinary brokerage
transactions, in private, negotiated transactions, or through any other means
described in the section entitled "Plan of Distribution" beginning on page 19.
The selling shareholders are selling these shares for their own accounts.
We will not receive any of the proceeds from the sale of the shares by the
selling shareholders, but will pay all registration expenses. The selling
shareholders will pay all selling expenses, including all underwriting discounts
and selling commissions.
Our Common Stock is traded on the Nasdaq National Market under the symbol
"PILL".
________
INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
________
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 __, 2001
TABLE OF CONTENTS
Page
----
WHERE YOU CAN FIND MORE INFORMATION 2
FORWARD-LOOKING INFORMATION 3
ABOUT PROXYMED 4
RISK FACTORS 5
USE OF PROCEEDS 12
SELLING SHAREHOLDERS 13
DESCRIPTION OF SECURITIES 13
PLAN OF DISTRIBUTION 19
LEGAL OPINION 22
EXPERTS 22
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy any document we file at the public reference facilities of the SEC
in Washington, D.C., Chicago, Illinois and New York, New York. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference into this Prospectus the following documents listed
below and any future filings that we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(1) Our Annual Report on Form 10-K for the year ended December 31, 2000
filed on March 28, 2001;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001
filed on May 5, 2001;
(3) Our Current Report on Form 8-K filed on April 26, 2001;
(4) Our Current Report on Form 8-K filed on May 7, 2001;
(5) Our Current Report on Form 8-K filed on June 15, 2001, and
(6) The description of our Common Stock contained in our Registration
Statement on Form 8-A declared effective on August 5, 1993, including
any other amendment or report filed for the purpose of updating such
information.
2
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
ProxyMed, Inc.
2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317
Attn: Corporate Secretary
Telephone: (954) 473-1001, ext. 300
You should rely only on information incorporated by reference or provided in
this Prospectus and any prospectus supplement. No one (including any salesman
or broker) is authorized to provide oral or written information about this
offering that is not included in this Prospectus.
FORWARD-LOOKING INFORMATION
This Prospectus, including the information incorporated by reference,
contains forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve substantial risks and uncertainties. These forward-looking
statements can generally be identified as such because the context of the
statement includes words such as the company "believes" "anticipates",
"expects", "intends", or other words of similar import. Similarly, statements
that describe the Company's future plans, objectives and goals are also forward-
looking statements. Further, certain forward-looking statements are based upon
assumptions of future events, which may not prove to be accurate. The Company's
actual results, performance or achievements could differ materially from those
expressed or implied in these forward-looking statements as a result of certain
factors, including those risk factors set forth on page 5 and elsewhere in this
Prospectus, certain of which may be detailed from time to time in our periodic
reports filed with the SEC.
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ABOUT PROXYMED
ProxyMed is an electronic healthcare transaction processing services
company providing connectivity services and related value-add products to
physicians, payers, pharmacies, medical laboratories, and other healthcare
providers and suppliers. Our electronic transaction processing services support
a broad range of both financial and clinical transactions. To facilitate these
services, we operate ProxyNet(R), our secure, proprietary national electronic
information network, which provides physicians and other primary care providers
with direct connectivity to one of the industry's largest list of payers, the
largest list of chain and independent pharmacies and the largest list of
clinical laboratories. Our products and services are provided from our three
operating facilities located in Fort Lauderdale, Florida; Santa Ana, California;
and New Albany, Indiana.
The healthcare industry generates billions of financial and clinical
transactions each year, including new prescription orders, refill
authorizations, laboratory orders and results, radiology orders and results,
medical insurance claims, insurance eligibility inquiries, encounter
notifications, and referral requests and authorizations. We believe that the
healthcare industry lags behind many other transaction-intensive industries,
such as the travel, securities and banking industries, in the number of
transactions processed electronically, with the vast majority of healthcare
transactions being performed manually and on paper. For physicians, payers,
labs and pharmacies to meet the financial and clinical demands of an evolving
managed care system, we believe that participants in the healthcare system will
need to process many of these types of transactions electronically. Due to the
number of participants, lack of standards and complexity of establishing
reliable and secure communication networks, the healthcare industry needs
companies such as ProxyMed, with its secure, proprietary systems, to facilitate
the processing of these transactions.
* * *
Our principal executive offices are located at 2555 Davie Road, Suite 110,
Fort Lauderdale, Florida 33317-7424, and our telephone number is (954) 473-1001.
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RISK FACTORS
In addition to the other information in this Prospectus or incorporated in
this Prospectus by reference, you should consider carefully the following
factors in evaluating ProxyMed and our business before purchasing the Common
Stock offered by this Prospectus.
We have incurred losses in the past and we expect losses in the future which
could have a detrimental effect on the market price of our stock
We have incurred substantial losses, including losses of $48,852,000,
$21,856,000, and $11,788,000 for the fiscal years ended December 31, 2000, 1999,
and 1998, respectively. As of December 31, 2000, we had an accumulated deficit
of $90,425,000. We expect to continue to incur substantial losses for the
foreseeable future. We can give no assurance that we will ever achieve
profitable operations. This could have a detrimental effect on the market price
of our stock.
We have important business relationships with other companies to market and sell
some of our clinical products and services which have not resulted in
significant sales yet and if these companies are unsuccessful, we will need to
add this emphasis internally, which may divert our efforts and resources from
others projects
For the marketing and sale of some of our clinical products and services,
we entered into important business relationships with physician office
management information system vendors and electronic medical record vendors and
through other agreements. These important business relationships, which have
required and may continue to require significant commitments of effort and
resources, have yet to generate substantial recurring revenue, and we cannot
assure that they will ever generate substantial recurring revenue. Most of
these relationships are on a non-exclusive basis, and we cannot assure that our
electronic commerce partners and other strategic partners, most of whom have
significantly greater financial and marketing resources than we do, will not
develop and market products and services in competition with us in the future or
will not otherwise discontinue their relationship with us. Also, our
arrangements with some of our partners involve negotiated payments to the
partners based on percentages of revenues generated by the partners. If the
payments prove to be too high, we may be unable to realize acceptable margins,
but if the payments prove to be too low, the partners may not be motivated to
produce a sufficient volume of revenues. The success of our important business
relationships will depend in part upon our partners' own competitive, marketing
and strategic considerations, including the relative advantages of alternative
products being developed and marketed by such partners. If any such partners
are unsuccessful in marketing our products, we will need to place added emphasis
on these aspects of our business internally, which may divert our planned
efforts and resources from other projects.
5
Our laboratory communication devices may be replaced with web-based technology
for lab results delivery, and we may not be successful in converting our
customers to our own internet portal, proxyMed.com, which would adversely impact
our revenues
A key element of our Laboratory Services business strategy is to market our
laboratory results reporting devices and related services, and our web-based
solutions, directly to independent and hospital-based medical laboratories. As
the Internet becomes a more acceptable method of transmitting laboratory orders
and reporting results because of the efficiencies and savings believed to be
available, we are leveraging our 20-plus years of goodwill and reputation for
quality of products and superior service to migrate our customers over to our
own Internet portal, proxyMed.com. We expect others to develop similar web-
based solutions and compete aggressively in an attempt to capture our large
customer base. We have no assurances that we will be able to retain or continue
to grow our customer base. Further, even as to the continuing sales of our
laboratory communication devices, we are unable to control many of the factors
that influence our customers' buying decisions, including our customers' budgets
and procedures for approving expenditures, and the changing political, economic
and regulatory influences which affect the purchasing practices and operation of
healthcare organizations.
The acceptance of electronic transaction processing in the healthcare industry
is still in its early stages; thus, the future of our business is uncertain
Our strategy anticipates that electronic processing of healthcare
transactions, including transactions involving clinical as well as financial
information, will become more widespread and that providers and third-party
payers increasingly will use electronic transaction processing networks for the
processing and transmission of data. Electronic transmission of healthcare
transactions (and, in particular, the use of the Internet to transmit them) is
still developing, and complexities in the nature and types of transactions which
must be processed have hindered, to some degree, the development and acceptance
of electronic transaction processing in this industry. We cannot assure that
continued conversion from paper-based transaction processing to electronic
transaction processing in the healthcare industry, using proprietary physician
management systems or the Internet, will occur.
Our clinical transaction products and services have yet to be tested on a large
scale and could fail under a heavy customer load
The quality of our clinical transaction products and services is important
to our business. Although we have completed the development of most of our
electronic transaction processing network, which we believe efficiently performs
the principal functions for which it has been designed, our clinical transaction
products and services and the network are currently being utilized only by a
limited number of customers for these transactions. We cannot assure that, upon
widespread commercial use of our clinical transaction products and services,
they will satisfactorily perform all of the functions for which we have designed
them or that unanticipated technical or other errors
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will not occur which would result in increased costs or material delays. Any of
these errors could delay our plans, result in harmful publicity or cause us to
incur substantial remedial costs.
Since an error by any party in the process of prescribing drugs and filling
prescriptions could result in substantial injury to a patient, our liability
insurance may not be adequate in a catastrophic situation
Our business exposes us to potential liability risks that are unavoidably
part of being in the healthcare electronic transaction processing industry.
Many of our products and services relate to prescribing and refilling of drugs
and the transmission of medical laboratory results, an error by any party in the
process could result in substantial injury to a patient. As a result, our
liability risks are significant.
We cannot assure that our insurance will be sufficient to cover potential
claims arising out of our current or proposed operations, or that our present
level of coverage will be available in the future at a reasonable cost. A
partially or completely uninsured claim against us, if successful and of
sufficient magnitude, would have significant adverse financial consequences.
Our inability to obtain insurance of the type and in the amounts we require
could generally impair our ability to market our products and services.
Our products employ proprietary information and technology which may infringe on
the intellectual property rights of third parties
In large part, our success is dependent on our proprietary information and
technology. We rely on a combination of contract, copyright, trademark and
trade secret laws and other measures to protect our proprietary information and
technology. We have no patents. We have copyright registrations for twelve of
our software products. As part of our confidentiality procedures, we generally
enter into nondisclosure agreements with our employees, distributors and
customers, and limit access to and distribution of our software, databases,
documentation and other proprietary information. We cannot assure that the
steps taken by us will be adequate to deter misappropriation of our proprietary
rights or that third parties will not independently develop substantially
similar products, services and technology. Although we believe our products,
services and technology do not infringe on any proprietary rights of others, as
the number of software products available in the market increases and the
functions of those products further overlap, we and other software and internet
developers may become increasingly subject to infringement claims. These
claims, with or without merit, could result in costly litigation or might
require us to enter into royalty or licensing agreements, which may not be
available on terms acceptable to us.
7
We depend on connections to insurance companies and other payers, and if we lose
these connections, our service offerings would be limited and less desirable to
healthcare participants
Our business is enhanced by the substantial number of payers, such as
insurance companies, Medicare and Medicaid agencies to which we have electronic
connections. These connections may either be made directly or through a
clearinghouse. We have attempted to enter into suitable contractual
relationships to ensure long-term payer connectivity; however, we cannot assure
that we will be able to maintain our links with all these payers. In addition,
we cannot assure that we will be able to develop new connections, either
directly or through clearinghouses, on satisfactory terms. Lastly, some third-
party payers provide systems directly to healthcare providers, bypassing us and
other third-party processors. Our failure to maintain existing connections with
payers and clearinghouses or to develop new connections as circumstances
warrant, or to increase the utilization of direct links between providers and
payers, could cause our electronic transaction processing system to be less
desirable to healthcare participants, which would slow down or reduce the number
of transactions that we process and for which we are paid.
Evolving industry standards and rapid technological changes could result in our
products becoming obsolete or no longer in demand
Rapidly changing technology, evolving industry standards and the frequent
introduction of new and enhanced internet-based services characterize the market
for our products and services. Our success will depend upon our ability to
enhance our existing services, introduce new products and services on a timely
and cost-effective basis to meet evolving customer requirements, achieve market
acceptance for new products or services and respond to emerging industry
standards and other technological changes. We cannot assure that we will be able
to respond effectively to technological changes or new industry standards.
Moreover, we cannot assure that other companies will not develop competitive
products or services, or that any such competitive products or services will not
cause our products and services to become obsolete or no longer in demand.
If electronic transaction processing penetrates the healthcare industry, we may
face pressure to reduce our prices which potentially may cause us to no longer
be competitive
If electronic transaction processing extensively penetrates the healthcare
market or becomes highly standardized, it is possible that competition among
electronic transaction processors will focus increasingly on pricing. This
competition may put intense pressure on us to reduce our pricing in order to
retain market share. If we are unable to reduce our costs sufficiently to
offset declines in our prices, or if we are unable to introduce new, innovative
service offerings with higher prices, we may not be competitive.
8
Computer network systems like ours could suffer security and privacy breaches
that could harm our customers and us
We currently operate servers and maintain connectivity from multiple
facilities. Despite our implementation of network security measures, such as
limiting physical and network access to routers, our infrastructure may be
vulnerable to computer viruses, break-ins and similar disruptive problems caused
by customers or other users. Computer viruses, break-ins or other security
problems could lead to interruption, delays or cessation in service to our
customers. These problems could also potentially jeopardize the security of
confidential information stored in the computer systems of our customers, which
may deter potential customers from doing business with us and give rise to
possible liability to users whose security or privacy has been infringed. The
security and privacy concerns of existing and potential customers may inhibit
the growth of the healthcare information services industry in general, and our
customer base and business in particular. A significant security breach could
result in loss of customers, damage to our reputation, direct damages, costs of
repair and detection and other unplanned expenses.
We depend on uninterrupted computer access for our customers; any prolonged
interruptions in our operations could cause our customers to seek alternative
providers of our services
Our success is dependent on our ability to deliver high-quality,
uninterrupted computer networking and hosting, requiring us to protect our
computer equipment and the information stored in servers against damage by fire,
natural disaster, power loss, telecommunications failures, unauthorized
intrusion and other catastrophic events. We plan to develop additional back-up
site capability and a program to manage technology to reduce risks in the event
of a disaster, including periodic "back-ups" of our computer programs and data.
Any damage or failure resulting in prolonged interruptions in our operations,
such as the current California rolling blackouts, could cause our customers to
seek alternative providers of our services. In particular, a system failure, if
prolonged, could result in reduced revenues, loss of customers and damage to our
reputation, any of which could cause our business to suffer. While we carry
property and business interruption insurance to cover operations, the coverage
may not be adequate to compensate us for losses that may occur.
We may not be able to retain key personnel or replace them if they leave
Our success is largely dependent on the personal efforts of Michael K.
Hoover, our Chairman of the Board and Chief Executive Officer. Although we have
entered into employment agreements with Mr. Hoover and other senior executives,
the loss of any of their services could cause our business to suffer. Our
success is also dependent upon our ability to hire and retain qualified
operations, development and other personnel. Competition for qualified
personnel in the healthcare information services industry is intense, and we
cannot assure that we will be able to hire or retain the personnel necessary for
our planned operations.
9
We may issue additional shares which could adversely affect the market price of
our common stock
Certain events over which you have no control could result in the issuance
of additional shares of our Common Stock or preferred stock, which would dilute
your ownership percentage in ProxyMed and could adversely affect the market
price of our Common Stock. We may issue additional shares of Common Stock or
preferred stock for many reasons including:
. to raise additional capital or finance acquisitions;
. upon the exercise or conversion or an exchange of outstanding
options, warrants and shares of convertible preferred stock; or
. in lieu of cash payment of dividends.
In addition, the number of shares of Common Stock that we are required to
issue upon conversion or exercise, as the case may be, of Series B Preferred
Stock, Series C Preferred Stock and many of our outstanding options and warrants
may increase if certain anti-dilution events occur (such as, certain issuances
of Common Stock, options and convertible securities).
Proposed healthcare legislation and changes to existing laws could cause an
erosion of our current competitive strengths
Our customers are subject to extensive and frequently changing federal and
state healthcare laws and regulations. Political, economic and regulatory
influences are subjecting the healthcare industry in the United States to
fundamental change. Potential reform legislation may include:
. 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,
. fundamental changes to the healthcare delivery system,
. FTC enforcement actions of existing privacy laws relating to the
internet,
. federal and state privacy and confidentiality statutes,
regulations rules and guidelines covering medical records and
patient information.
The federal Health Insurance Portability and Accountability Act of 1996,
known as HIPAA for short, mandates the use of standard transactions, standard
identifiers, security and other provisions for electronic claims transactions.
HIPAA specifically designates clearinghouses (including us and other financial
network operators) as the
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compliance facilitators for healthcare providers and payers. On August 17, 2000,
the U.S. Department of Health and Human Services published final regulations to
govern eight of the most common electronic transactions involving health
information. We must comply by April 14, 2003. We believe that we will be in
compliance by that date or sooner, and we expect, but have no assurances that
our business partners or customers who may also be covered by these regulations
will also be in compliance by that date. Due to mandated standards, however,
there is a possibility that it will be easier for competitors to offer
electronic transaction processing services similar to ours, which would make our
competitive strength of accepting financial transactions in multiple formats
less of a differentiating factor for our customers.
We anticipate Congress and state legislatures will continue to review and
assess alternative healthcare delivery systems and payment methods, as well as
internet and healthcare privacy legislation, and that public debate of these
issues will likely continue in the future. Due to uncertainties as to these
reform initiatives and their enactment and implementation, we cannot predict
which, if any, of such reform proposals will be adopted, when they may be
adopted or what impact they may have on us.
Because we are smaller and have fewer financial resources than many of our
competitors, we may not be able to successfully compete in the very competitive
healthcare electronic transaction processing industry
We face competition from many healthcare information systems companies and
other technology companies. Many of our competitors are significantly larger
and have greater financial resources than we do and have established reputations
for success in implementing healthcare electronic transaction processing
systems. Other companies have targeted this industry for growth, including the
development of new technologies utilizing internet-based systems. We cannot
assure that we will be able to compete successfully with these companies or that
these or other competitors will not commercialize products, services or
technologies that render our products, services or technologies obsolete or less
marketable.
Investors should not anticipate receiving cash dividends on our Common Stock
We currently anticipate retaining all of our future earnings, if any, for
use in the operation and expansion of our business, and do not plan to pay any
cash dividends on shares of our Common Stock in the foreseeable future. The
provisions of our Series B Preferred Stock prohibit the payment of dividends on
our Common Stock unless we get the consent of the holders of two-thirds of the
Series B Preferred Stock. Potential investors who anticipate a need for
dividends should not invest in the Common Stock.
Our Common Stock price has fluctuated considerably and may not appreciate in
value
The market price of shares of our Common Stock has fluctuated substantially
in recent years and is likely to fluctuate significantly from its current level.
During the
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period from January 1, 2001 through May 4, 2001, our Common Stock closing price
has ranged from a high of $1.50 per share to a low of $0.94 per share. In 1998,
our Common Stock closing price ranged from a low of $5.25 per share to a high of
$16.50 per share, during 1999, our Common Stock closing price ranged from a low
of $9.50 per share to a high of $19.25 per share, and during 2000, our Common
Stock closing price ranged from a low of $0.81 per share to a high of $11.13 per
share. Future announcements concerning our financial performance, conversion of
shares of the Series B or the Series C Preferred Stock into Common Stock,
warrant and option exercises, year-end selling for tax losses, the announcement
of strategic business relationships, the introduction of new products, services
or technologies or changes in product pricing policies by us or our competitors
or changes in earnings estimates by analysts, among other factors, could cause
the market price of our Common Stock to fluctuate substantially. Stock markets
have experienced extreme price and volume volatility in the last year. This
volatility has had a substantial effect on the market prices of securities of
many public companies, including those in the eHealth sector, for reasons
frequently unrelated to the operating performance of the specific companies.
These broad market fluctuations may also cause declines in the market price of
our Common Stock. Investors seeking short-term liquidity should be aware that we
cannot assure that the stock price will appreciate in value or, as noted above,
that cash dividends will be paid.
We may be required to delist our shares from Nasdaq if certain events occur
The Nasdaq Stock Market has certain rules that must be met in order for a
listed company to maintain its listing on the National Market System. We may be
required to delist from Nasdaq if the bid price of our Common Stock closes below
one dollar ($1.00) for thirty consecutive trading days. In such event, trading,
if any, in the Common Stock may then continue to be conducted on the over-the-
counter market in what are commonly referred to as the "pink sheets", or on the
OTC Electronic Bulletin Board. As a result of trading in the over-the-counter
market, an investor may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Common Stock. In addition,
trading in the Common Stock would likely decrease substantially, and the price
of the Common Stock may decline.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of Common Stock by
any of the selling shareholders.
We estimate that our expenses in connection with the filing of this
registration statement will be approximately $35,000.
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SELLING SHAREHOLDERS
General
The shares of Common Stock being offered by the selling shareholders are
issuable upon the exchange of certain warrants. We are registering the shares in
order to permit the selling shareholders to offer these shares for resale from
time to time. None of the selling shareholders has had any material relationship
with us within the past three years. Common shares after offering include shares
of common stock, stock options and warrants owned prior to any securities being
offered under this Prospectus.
Common
Shares Common
Beneficially Shares Common
Owned Prior Offered Shares
to By This After Percentage
Name of Selling Shareholder Offering Prospectus Offering of Class
--------------------------- -------- ---------- -------- ----------
Fisher Capital Ltd. 626,186 626,186 -0- *
Leonardo, L.P. 1,262,473 1,262,473 -0- *
Royal Bank of Canada 1,009,976 1,009,976 -0- *
Wingate Investments, Ltd. 383,788 383,788 -0- *
* Less than 1%
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 100,000,000 shares of Common
Stock, par value $.001 per share, and 2,000,000 shares of preferred stock, par
value $.01 per share, of which 15,000 shares have been designated Series B
Preferred Stock and 300,000 shares have been designated Series C Preferred
Stock. At May 4, 2001, 24,757,988 shares of Common Stock were issued and
outstanding, 110 shares of Series B Preferred Stock were issued and outstanding
and 253,265 shares of Series C Preferred Stock were issued and outstanding.
Of the 24,757,988 shares of Common Stock outstanding on May 4, 2001, this
amount does not include the 121,002 shares of Common Stock issuable upon
conversion of Series B Preferred Stock, the 25,326,500 shares of Common Stock
issuable upon conversion of the Series C Preferred Stock, the 24,146,174 shares
of Common Stock issuable upon exercise of currently outstanding warrants, and
11,833,161 shares of Common Stock reserved for issuance upon exercise of
currently outstanding stock options.
The descriptions below of the terms of Common Stock, Series B Preferred
Stock, Series C Preferred Stock and the related warrants are summaries of the
material terms only and do not purport to be complete. Such descriptions are
subject to and qualified by the actual agreements relating to Series B Preferred
Stock, Series C Preferred Stock, such warrants, our amended Articles of
Incorporation and By-laws, all of which have been
13
filed with the SEC and are incorporated into this Prospectus by reference, and
by applicable law.
Common Stock
The issued and outstanding shares of Common Stock are, and the shares being
offered by this Prospectus will be, validly issued, fully paid and non-
assessable. The holders of outstanding shares of Common Stock are entitled to
receive dividends out of assets legally available for them at such times and in
such amounts as the Board of Directors may from time to time determine. We have
not paid any dividends and do not expect to pay cash dividends on our Common
Stock in the foreseeable future.
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, have one vote per share in all matters to be voted upon
by the shareholders. Cumulative voting in the election of directors is not
allowed, which means that the holders of more than 50% of the outstanding shares
can elect all the directors if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any directors.
The shares have no preemptive, subscription, conversion or redemption
rights. Upon liquidation, dissolution or winding-up of ProxyMed, the holders of
Common Stock are entitled to receive pro rata the assets of ProxyMed which are
legally available for distribution to shareholders.
Preferred Stock
In addition to Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock, our Board of Directors has the authority to issue
1,746,625 additional shares of preferred stock in one or more series and to fix
the designation, relative powers, preferences and rights and qualifications,
limitations or restrictions of all shares of each such series, including
dividend rates, conversion rights, voting rights, redemption and sinking fund
provisions, liquidation preferences and the number of shares constituting each
such series, without any further vote or action by the shareholders.
The issuance of preferred stock could decrease the amount of earnings and
assets available for distribution to holders of Common Stock or adversely affect
the rights and powers, including voting rights, of the holders of Common Stock
and could have the effect of delaying, deferring or preventing a change in
control of ProxyMed without further action by the shareholders.
Series B Preferred Stock
Pursuant to the terms of a Securities Purchase Agreement dated December 23,
1999, we issued 15,000 shares of Series B Preferred Stock in a private placement
to institutional investors. The shares of Series B Preferred Stock are non-
voting and carry a cumulative dividend at a rate of 6% per annum, payable
quarterly or upon conversion or
14
redemption, which may be paid in cash or Common Stock, at our option, subject to
certain conditions. The shares of Series B Preferred Stock mature on December
23, 2001, subject to extension in certain circumstances, at which time the
Series B Preferred Stock will be redeemed or converted at our option, subject to
certain conditions. The conversion price of Series B Preferred Stock at maturity
is 95% of the average of the closing trade price on the Nasdaq National Market
of the Common Stock for the 30 consecutive trading days immediately preceding
December 23, 2001.
In connection with the sale of Series B Preferred Stock, we issued warrants
(the "Old Warrants") to purchase up to 800,000 shares of Common stock, subject
to adjustment in certain events. The original exercise price of the Old Warrants
was $12.05 per share, subject to adjustment in certain events. The Old Warrants
expire on December 23, 2002. In addition, in order to obtain the consent of
Transamerica Business Credit Corporation to the sale of Series B Preferred
Stock, a warrant to purchase 25,000 shares of Common Stock at an original
exercise price of $11.62 per share was issued to Transamerica (the "Transamerica
Warrant") on substantially the same terms as the Old Warrants. The exercise
price and number of shares of Common Stock which may be purchased upon exercise
of such warrants continue to be subject to further adjustment upon the
occurrence of certain dilution events including, without limitation, certain
issuances of Common Stock, stock options or convertible securities or certain
corporate transactions such as stock splits, mergers or asset sales.
Series B Preferred Stock converts into Common Stock at a floating rate
based on the market price of the Common Stock. The terms of Series B Preferred
Stock provide that the holders cannot exercise their rights to convert Series B
Preferred Stock prior to December 23, 2000, unless certain triggering events
occur. One such triggering event occurred as of May 1, 2000 when the closing
price of the Common Stock had been below $4.21 for 10 trading days, thus causing
the restriction on conversions to cease to be in effect.
In order to attempt to prevent the conversion of all of the shares of
Series B Preferred Stock and the resulting significant dilution to the holders
of Common Stock, we engaged in negotiations with the holders of Series B
Preferred Stock to restructure certain terms of Series B Preferred Stock.
Effective May 4, 2000, we entered into a Redemption and Exchange Agreement (the
"Redemption Agreement") with holders of 13,000 shares of Series B Preferred
Stock. Under the terms of the Redemption Agreement, we have redeemed 13,000
shares of Series B Preferred Stock at 116.5% of the Conversion Amount (as
defined in the Articles of Amendment to our Articles of Incorporation creating
Series B Preferred Stock (the "Series B Articles of Amendment")). As of May 4,
2001, the remaining holder of Series B Preferred Stock had converted 1,890
shares of Series B Preferred Stock into an aggregate of 1,621,936 shares of
Common Stock and 110 shares of Series B Preferred Stock continue to be held by
such holder.
The Redemption Agreement also provided for the exchange of 693,333 of the
Old Warrants issued to the holders of Series B Preferred Stock subject to the
Redemption Agreement for warrants (the "Exchanged Warrants") with an exercise
price of $1.50 per
15
share. In addition, such holders have received, in the aggregate, 650,000
additional warrants (the "New Warrants") at an exercise price of $1.50 per
share. The Exchanged Warrants expire on December 23, 2002, and the New Warrants
expire on May 5, 2003. The exercise price and number of shares of Common Stock
which may be purchased upon exercise of the Exchanged Warrants and the New
Warrants are subject to adjustment upon the occurrence of certain dilution
events which occur 183 days after the date of issuance of such warrants
including, without limitation, certain issuances of Common Stock, stock options
or convertible securities or certain corporate transactions such as stock
splits, mergers or asset sales or other events. In February 2001, as a result of
certain anti-dilution provisions, the 693,333 Exchanged Warrants were reset into
3,425,493 warrants with a new exercise price of $1.25883 per share.
Effective April 24, 2001, the Company entered into Exchange Agreements (the
"Exchange Agreements") with the former holders of $13,000,000 of its $15,000,000
Series B Preferred Stock. The Company and such holders had previously entered
into the Redemption Agreement.
Under the Exchange Agreements, the Company cancelled and exchanged all
outstanding Exchanged Warrants and New Warrants for an aggregate of 3,282,423
shares of Common Stock. Additionally, under terms of the Exchange Agreement, the
Company is required to register certain of these shares under Form S-3 within 15
days after the Closing Date. For this transaction, the Company expects to record
a $1.8 million deemed dividend charge in the quarter ended June 30, 2001.
In connection with the cancellation and exchange of these warrants, the
remaining holder of the Series B Preferred Stock and the holders of the Series C
Preferred Stock have agreed to waive certain anti-dilution rights afforded by
certain outstanding warrants, the Series B Preferred Stock and the Series C
Preferred Stock.
In the event of the liquidation of ProxyMed, the holder of the Series B
Preferred Stock will be entitled to a liquidation preference before any amounts
are paid to the holders of Common Stock. The liquidation preference is equal to
the amount originally paid for the Series B Preferred Stock ($1,000 per share)
plus accrued and unpaid dividends (and any unpaid default interest) on any
outstanding Series B Preferred Stock through the date of determination.
Other than as required by law, the holders of the Series B Preferred Stock
have no voting rights except that the consent of holders of at least two-thirds
of the outstanding Series B Preferred Stock will be required to (1) effect any
change in our Articles of Incorporation that would change any of the rights of
the Series B Preferred Stock; or (2) issue any Series B Preferred Stock other
than pursuant to the Securities Purchase Agreement.
Complete copies of the Series B Articles of Amendment, the form of the
Old Warrants and the Securities Purchase Agreement are contained in our Current
Report on Form 8-K filed with the SEC on December 28, 1999, and are incorporated
herein by
16
reference. Complete copies of the Redemption Agreement, the Exchanged Warrants
and the New Warrants are contained in our Current Report on Form 8-K filed with
the SEC on May 8, 2000, and are incorporated herein by reference. Complete
copies of the Exchange Agreements are contained in our Current Report on Form 8-
K filed with SEC on April 26, 2001 and are incorporated herein by reference. The
descriptions of these documents are summaries of the material terms and
conditions only and are qualified in their entirety by reference to the complete
documents which are publicly available from the SEC.
Series C Preferred Stock
Pursuant to the terms of a Subscription Agreement dated June 28 2000, we
sold, in a private placement to institutional and individual investors (the
"Series C Preferred Financing"), a total of $24,310,000 of 7% Convertible Senior
Secured Notes (the "Notes") due January 1, 2001. Together with the Notes, we
issued five-year warrants for the purchase of an aggregate of 12,155,000 shares
of Common Stock at an exercise price of $1.00 per share. As described below, all
of the Notes have been converted into shares of Series C Preferred Stock. The
conversion price of the Series C Preferred Stock, the warrant exercise price,
and number of shares of Common Stock issuable upon exercise of the warrants are
subject to adjustment upon the occurrence of certain dilution events including,
without limitation, certain issuances of Common Stock, stock options or
convertible securities issued after June 2001, or certain corporate transactions
such as stock splits, mergers or asset sales.
As a result of completion of the redemption of the Series B Preferred Stock
pursuant to the Redemption Agreement, the Notes, plus accrued interest thereon
of approximately $20,000, automatically converted into 253,265 shares of Series
C Preferred Stock on June 30, 2000. Shares of Series C Preferred Stock are
immediately convertible into Common Stock at any time by the holder at an
initial conversion price of $1.00 per share. Shares of Series C Preferred are
subject to mandatory conversion if we raise more than $30 million in gross
proceeds from the issuance of securities in a private or public placement or if
the closing stock price of the Company is trading at $3.00 for 20 consecutive
trading days. The Series C Preferred Stock is entitled to receive a 7% annual
non-cumulative dividend, payable quarterly in cash or shares of Common Stock at
the Company's option. If paid in Common Stock, the Common Stock is valued at
$1.00 per share, subject to adjustment. Commonwealth served as private placement
agent in the Series C Preferred Financing for which it received, in addition to
cash fees of $2,431,000, five-year warrants to purchase 7,293,000 shares of
Common Stock at an exercise price of $1.00 per share. As part of its
compensation for financial advisory services in connection with the Series C
Preferred Financing, we paid cash fees of $250,000 and also issued to
Commonwealth a five-year warrant to purchase 1,000,000 shares of Common Stock at
an exercise price of $1.50 per share.
The investors in the Series C Preferred Financing agreed to a one-year
lockup on the transfer or sale of any shares of Common Stock received upon
conversion of Series C Preferred Stock and exercise of the related warrants
issued. Additionally,
17
Commonwealth has agreed to a 15-month lockup on the sale or transfer of the
shares of Common Stock underlying the warrants issued in connection with Series
C Preferred Financing and certain officers of ProxyMed have also agreed to a
similar lockup on all Common Stock owned or acquired during the 15-month period.
At the discretion of Commonwealth, lockup periods for all parties can be
extended for a period of up to an additional 12 months or may be terminated
early.
In August 2000, the Company sold 10,000 shares of Series C Preferred Stock
for $1 million in a private placement and issued five-year warrants for the
purchase of 500,000 shares of Common Stock at an exercise price of $1.00 per
share to Mr. Michael K. Hoover, its new Chairman of the Board and Chief
Executive Officer, under terms substantially identical to the Series C Preferred
Financing. Mr. Hoover has also agreed to similar lockup terms agreed to in the
Series C Preferred Financing by other officers of ProxyMed, as noted above.
At our option, the quarterly dividend on Series C Preferred Stock may be
paid in cash (to the extent permitted by the terms of the Series B Preferred
Stock) or Common Stock. If paid in stock, the stock is valued at $1.00 per
share, subject to adjustment. Dividends on Series C Preferred Stock are non-
cumulative. Dividends for the quarter ended March 31, 2001 were paid with
436,840 shares of Common Stock issued in April 2001.
In the event of liquidation of ProxyMed, the holders of the Series C
Preferred will be entitled to a liquidation preference before any amounts are
paid to the holders of Common Stock or any other security junior to Series C
Preferred Stock. Series C Preferred Stock ranks junior to the Series B Preferred
Stock with respect to the preference as to distributions and payments upon
liquidation. The liquidation preference is equal to an amount originally paid
for the Series C Preferred Stock ($100 per share) plus accrued and unpaid
dividends on any outstanding Series C Preferred Stock through the date of
determination.
The holders of Series C Preferred Stock are entitled to one vote per share
of Common Stock issuable upon the conversion of the Series C Preferred Stock
and, except as otherwise provided by law, will vote as a single class with the
holders of Common Stock on all matters submitted to a vote. In the event that
the holders of Series C Preferred Stock are required to vote as a single class,
the affirmative vote of holders of not less than two-thirds of the outstanding
shares of Series C Preferred Stock shall be required to approve each matter to
be voted upon and if any matter is approved by such requisite percentage of
holders of Series C Preferred Stock, such matter shall bind all holders of
Series C Preferred Stock.
Complete copies of the Series C Preferred Financing documents described
herein are contained in our Quarterly Report on Form 10-Q/A for the quarterly
period ended June 30, 2000, filed with the SEC on August 31, 2000. The
descriptions of these documents are summaries of the material terms and
conditions only and are qualified in
18
their entirety by reference to the complete documents which are publicly
available from the SEC.
Certain Anti-Takeover Provisions
Under ProxyMed's Articles of Incorporation, there are approximately
13,795,504 unissued, unreserved shares of Common Stock and 1,746,625 shares of
preferred stock available for future issuance without shareholder approval. The
existence of authorized but unissued capital stock could have the effect of
making more difficult or discouraging an acquisition of ProxyMed deemed
undesirable by our Board of Directors.
Nasdaq National Market
Our Common Stock is, and the shares being offered by this Prospectus will
be, traded in the Nasdaq National Market unless our Common Stock is delisted
from Nasdaq. Certain events that could cause our Common Stock to be delisted
from Nasdaq are described in this Prospectus under "Risk Factors - We may be
required to delist our shares from Nasdaq if certain events occur".
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is North American
Transfer Company, Freeport, New York.
PLAN OF DISTRIBUTION
The selling shareholders (or, subject to applicable law, their pledges,
donees, distributees, transferees or successors in interest) are offering shares
of our Common Stock, which are issuable to them upon exercise of warrants that
they acquired from us in connection with a certain Exchange Agreement. This
Prospectus covers the selling shareholders' resale of up to 3,282,423 shares of
our Common Stock that we have issued in connection with the exchange of certain
warrants pursuant to an Exchange Agreement with certain investors, as well as
any additional shares that may become issuable upon the exchange of the warrants
because of stock splits, stock dividends and other specified transactions.
We have also agreed to prepare and file any amendments and supplements to
the registration statement in which this Prospectus is included as may be
necessary to keep it effective until this Prospectus is no longer required for
the selling shareholders to sell their shares of Common Stock, and to indemnify
and hold the selling shareholders harmless against certain liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), that could arise in
connection with the selling shareholders' sale of their shares. We have agreed
to pay all reasonable fees and expenses incident to the filing of these
registration statements, but the selling shareholders will pay any brokerage
commissions, discounts or other expenses relating to the sale of their Common
Stock.
19
The selling shareholders may sell the shares of Common Stock described in
this Prospectus directly or through underwriters, broker-dealers or agents. The
selling shareholders may also transfer, devise or give their shares by other
means not described in this Prospectus. As a result, pledges, donees,
transferees or other successors in interest that receive such shares as a gift,
partnership distribution or other non-sale related transfer may offer shares of
Common Stock under this Prospectus. In addition, if any shares covered by this
Prospectus qualify for sale pursuant to Rule 144 under the Securities Act, as
amended, the selling shareholders may sell such shares under Rule 144 rather
than pursuant to this Prospectus.
The selling shareholders may sell shares of Common Stock from time to time
in one or more transactions:
. at fixed prices that may be changed,
. at market prices prevailing at the time of sale, or
. at prices related to such prevailing market prices or at negotiated
prices.
The selling shareholders may offer their shares of Common Stock in one or
more of the following transactions:
. on any national securities exchange or quotation service on which
the Common Stock may be listed or quoted at the time of sale,
including the Nasdaq National Market,
. in the over-the-counter market,
. in privately-negotiated transactions,
. through options,
. by pledge to secure debts and other obligations,
. by a combination of the above methods of sale,
. to cover short sales made pursuant to this Prospectus, or
. any other method permitted pursuant to applicable law.
In effecting sales, brokers or dealers engaged by the selling shareholders
or affiliated with them may arrange for other brokers or dealers to participate
in the resales. The selling shareholders may enter in a block trade in which a
broker-dealer will attempt to sell a block of shares as agent but may position
and resell a portion of the block as
20
principal to facilitate the transaction. A broker-dealer may purchase such
shares as principal and offer the shares for resale for its account pursuant to
this Prospectus. Broker-dealers may agree with the selling shareholders to sell
a specified number of these shares at a stipulated price per share. The selling
shareholders may enter into hedging transactions with broker-dealers, and in
connection with those transactions, broker-dealers may engage in short sales of
the shares. The selling shareholders also may sell shares short and deliver the
shares to close out such short positions. The selling shareholders also may
enter into option or other transactions with broker-dealers that require the
delivery to the broker-dealer of the shares, which the broker-dealer may resell
pursuant to this Prospectus. The selling shareholders also may pledge the shares
to a broker or dealer, and upon a default, the broker or dealer may effect sales
of the pledged shares pursuant to this Prospectus.
Broker-dealers may receive commissions or discounts from the selling
shareholders (or, if any broker-dealer cats as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The selling
shareholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved. The broker-dealer transactions
may include:
. purchases of the shares by a broker-dealer as principal and resales
of the shares by the broker-dealer for its account pursuant to this
Prospectus;
. ordinary brokerage transactions; or
. transactions in which the broker-dealer solicits purchasers.
If a material arrangement with any broker-dealer or other agency is entered
into for the sale of any shares of common stock through a block trade, special
offering, exchange distribution, secondary distribution, or a purchase by a
broker or dealer, a Prospectus supplement will be filed, if necessary, pursuant
to Rule 424(b) under the Securities Act disclosing the material terms and
conditions of these arrangements.
The SEC may deem the selling shareholders and any underwriters, broker-
dealers or agents that participate in the distribution of the shares of Common
Stock to be "underwriters" within the meaning of the Securities Act. The SEC may
deem any profits on the resale of the shares of Common Stock and any
compensation received by any underwriter, broker-dealer or agent to be
underwriting discounts and commissions under the Securities Act.
Under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
any person engaged in the distribution of the shares of Common Stock may not
simultaneously engage in market-making activities with respect to Common Stock
for five business days prior to the start of the distribution. In addition, each
selling shareholder and any other person participating in a distribution will be
subject to the
21
Exchange Act, which may limit the timing of purchases and sales of Common Stock
by the selling shareholder or any other person.
LEGAL OPINION
The validity of the Common Stock offered hereby will be passed on for us by
Holland & Knight LLP, 701 Brickell Avenue, Suite 3000, Miami, Florida 33131.
EXPERTS
The consolidated balance sheets of ProxyMed as of December 31, 2000 and
1999, 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, 2000, that are incorporated by reference in this Prospectus
have been incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on that firm's
authority as experts in accounting and auditing.
22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fee.
To Be Paid By
The Registrant
---------------
SEC registration fee $ 854
Accounting fees and expenses 5,000
Legal fees and expenses 25,000
Miscellaneous 4,146
---------------
$ 35,000
===============
Item 15. Indemnification of Directors and Officers.
Section 607.0850 of the Florida Business Corporation Act empowers a Florida
corporation to indemnify any person who was or is a party to any proceeding
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee, or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against liability incurred in connection
with such proceeding, including any appeal thereof, if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, such person had no reasonable cause to believe his conduct was
unlawful. A Florida corporation may indemnify such person against expenses
including amounts paid in settlement (not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion) actually and reasonably incurred by such person in connection with
actions brought by or in the right of the corporation to procure a judgment its
favor under the same conditions set forth above, if such person acted in good
faith and in a manner such person believed to be in, or not opposed to, the best
interests of the corporation, except that no indemnification is permitted in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and to the extent the court in
which such action or suit was brought or other court of competent jurisdiction
shall determine upon application that, in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper.
22
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 Exhibits to this Registration Statement are listed in the Index to the
Exhibits on page 27.
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.
23
(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.
24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on June 20,
2001.
PROXYMED, INC.
By: /s/ Judson E. Schmid
----------------------------------
Executive Vice President, Chief
Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
* Chairman of the Board, Chief June 20, 2001
- ---------------------------- Executive Officer and
Michael K. Hoover Director
* Vice-Chairman of the Board June 20, 2001
- ---------------------------- and Director
Harold S. Blue
* Director June 20, 2001
- ----------------------------
Edwin M. Cooperman
* Director June 20, 2001
- ----------------------------
Gerald B. Cramer
* Director June 20, 2001
- ----------------------------
Donald G. Drapkin
* Director June 20, 2001
- ----------------------------
Michael S. Falk
* Director June 20, 2001
- ----------------------------
Thomas E. Hodapp
* Director June 20, 2001
- ----------------------------
Bertram J. Polan
* Director June 20, 2001
- ----------------------------
Eugene R. Terry
*By /s/ Frank M. Puthoff *Pursuant to Power
---------------------- of Attorney dated
Frank M. Puthoff May 9, 2001. June 20, 2001
Attorney -In-Fact
26
INDEX TO EXHIBITS
Exhibit No. Description of Documents
----------- ------------------------
5.1 Opinion of Holland & Knight LLP. (1)
23.1 Consent of Holland & Knight LLP (included in the opinion filed as
Exhibit 5.1). (1)
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on signature page of the
Registration Statement). (1)
(1) Previously filed.
27