Exhibit 99.1
Company News Release
FOR IMMEDIATE RELEASE
Contacts:
Michael K. Hoover Judson E. Schmid
Chairman and Chief Executive Officer Chief Financial Officer
(954) 473-1001, Ext. 300 (954) 473-1001, Ext. 300
PROXYMED COMPLETES WARRANT EXCHANGE AND
ANNOUNCES 1-for 15 REVERSE STOCK SPLIT
Ft. Lauderdale, FL. August 17, 2001 - ProxyMed, Inc. (Nasdaq: PILL), a
leading provider of healthcare transaction processing services, announced today
that it has completed the exchange of warrants issued in connection with its
Series C preferred stock by exchanging 21.1 million warrants for 15.7 million
shares of common. Over 96 percent of the 21.9 million warrants issued in
connection with the Series C preferred stock financing were exchanged. The
exchange, which began solicitation on June 15, resulted in a reduction in the
number of fully-diluted shares by 5.4 million shares. Under the terms of the
Exchange Agreement, the common stock issued is subject to an additional lock-up
period through February 15, 2002. As a result of this exchange, the company
expects to record a non-cash, deemed dividend charge of approximately $3.1
million in the third quarter. The exchange of its Series C warrants follows the
successful April 2001 exchange of 4.1 million Series B warrants into 3.3 million
common shares as part of the simplification of ProxyMed's capital structure.
Michael K. Hoover, ProxyMed's chairman and chief executive officer said,
"When I joined ProxyMed one year ago, the company had negative cash flows and a
complex capital structure, hampering the ability to attract long-term investors
and analysts that would establish and support a more fairly valued stock. We
took an important step towards this by achieving EBITDA profitability in the
second quarter. Today's announcement acts as a further catalyst by giving us a
solid capital structure, clarity in terms of maintaining the company's Nasdaq
National Market listing and greater opportunities to attract investors. We
continue to have the utmost confidence in ProxyMed's future as evidenced by
recent purchases of stock made by myself and other insiders."
In addition to the warrant exchange, ProxyMed announced today a 1-for-15
reverse stock split of its common stock whereby each 15 shares of common stock
would be exchanged for one new share of common stock. The reverse stock split
has a record date of August 21, 2001. For 20 trading days beginning August 21,
the company's common stock will trade under the symbol "PILLD" and thereafter
the company's stock will trade under its current symbol "PILL". The company
notes that shareholders are not required to physically exchange their current
certificates for new ones. However, if certificates are exchanged, certificates
will be issued to reflect any fractional share interests.
"I am extremely pleased on the progress we have made on the simplification
of our capital structure over the last few months," said Judson E. Schmid,
ProxyMed's chief financial officer. "By reducing the warrant overhang from our
Series B and Series C preferred stock and effecting the reverse split, we
believe that these events will improve the marketability of ProxyMed's stock by
appealing to a broader range of investors. The use of our stock as currency in
the marketplace is extremely important for our future growth regarding
acquisitions and attracting institutional investors."
As a result of the warrant exchange and the reverse stock split, ProxyMed's
fully-diluted shares position and capital structure will be as follows:
Before After
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Common stock outstanding 42,251,000 2,816,700
Series B and C convertible preferred stock 24,127,500 1,608,500
Warrants 2,683,100 178,900
Stock options 12,459,100 830,600
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Total fully-diluted shares 81,520,700 5,434,700
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Insider and affiliate ownership of outstanding shares is approximately 22
percent resulting in a public float of approximately 2.2 million shares (post-
reverse split).
Additionally, ProxyMed has selected Registrar and Transfer Company of
Cranford, New Jersey as its new stock transfer agent effective as of August 21,
2001. Registrar and Transfer Company can be contacted at 1-800-368-5948.
About ProxyMed, Inc.
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ProxyMed is an electronic healthcare transaction processing services company
providing connectivity services and related value-added products to physicians,
payers, pharmacies, medical laboratories, and other healthcare providers and
suppliers. ProxyMed's electronic transaction processing services support a broad
range of both financial and clinical transactions. To facilitate these services,
ProxyMed operates ProxyNet(R), its 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.
Note: This press release contains forward-looking statements that reflect our
current assumptions and expectations regarding future events. While these
statements reflect our current judgment, they are subject to risks and
uncertainties. Actual results may differ significantly from projected results
due to a number of factors, including, but not limited to the soundness of our
business strategies relative to the perceived market opportunities; our ability
to successfully develop, market, sell, install and upgrade our clinical and
financial transaction services and applications to physicians, payers, medical
laboratories and pharmacies; our ability to compete effectively on price and
support services; our assessment of the healthcare industry's need, desire and
ability to become technology efficient; and our ability and that of our business
associates to comply with various government rules regarding healthcare and
patient privacy. These and other risk factors are more fully discussed in our
filings with the Securities and Exchange Commission, which we strongly urge you
to read. We expressly disclaim any intent or obligation to update any forward-
looking statements. When used, the words "believes," "estimated," "expects,"
"anticipates," "may" and similar expressions are intended to identify forward-
looking statements.
More information on ProxyMed is available on its home page at
http://www.proxymed.com.
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