<TABLE>
As filed with the Securities and Exchange Commission on August 16, 1999
Registration No. 333 -
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NETSMART TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3680154
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
146 Nassau Avenue, Islip, New York, 11751, (516) 968-2000
(Address, including zip code, and telephone number of registrant's principal
executive offices)
Asher S. Levitsky P.C.
Esanu Katsky Korins & Siger, LLP
605 Third Avenue
New York, New York 10158
(212) 953-6000
Fax: (212) 953-6899
(Name, address and telephone number, including area code, of agent for service)
Copies to:
Mr. James L. Conway, President and Chief Executive Officer
Netsmart Technologies, Inc.
146 Nassau Avenue
Islip, New York 11751
(516) 968-2000
Fax: (516) 968-2123
Approximate date of commencement of proposed sale to the public: As soon as
practical on or 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 of this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
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. [ ]
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
Title of securities maximum maximum
to be Amount to be offering price aggregate Amount of
registered registered per unit offering price registration fee
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Common Stock, par 994,499 shs. $4.02(1) $3,997,886 $1,111.41
value $.01 per share
<FN>
- ----------
(1) The average of the high and low prices of the common stock on the Nasdaq
SmallCap Market on August 5, 1999.
</FN>
</TABLE>
<PAGE>
PROSPECTUS
994,499 Shares
NETSMART TECHNOLOGIES, INC.
Common Stock
Nasdaq SmallCap Market Trading Symbol: NTST
The selling stockholders may sell up to 994,499 shares of common stock from
time to time. These selling stockholders may sell their shares
* On the Nasdaq SmallCap Market.
* To a broker-dealer, including a market maker, who purchases the shares
for its own account.
* In private transactions or by gift.
We will not receive any proceeds from the sale by the selling
stockholders of their shares, and we will pay the cost of the preparation of
this prospectus, which is estimated at $10,000.
--------------
Investing in shares of our common stock involves a high degree of risk. You
should purchase the shares only if you can afford to lose your entire
investment. See "Risk Factors," which begins on page 3.
--------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined whether
this Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1999
<PAGE>
AVAILABLE INFORMATION
We file annual, quarter and periodic reports, proxy statements and other
information with the Securities and Exchange Commission using the EDGAR system.
You may inspect these documents and copy information from them at the
Commission's public reference facilities at 450 Fifth Street, N.W., Washington,
D.C. 20549 or at the regional offices of the Commission at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of this material can be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such site is http//www.sec.gov.
We have filed a registration statement with the Commission relating to
the offering of the shares. The registration statement contains information
which is not included in this prospectus. You may inspect or copy the
registration statement at the Commission's public reference facilities or its
Web site.
We furnish our stockholders with annual reports containing audited
financial statements and with such other periodic reports as we from time to
time deem appropriate or as may be required by law. We use the calendar year as
our fiscal year.
You should rely only on the information contained in this Prospectus and
the information that we have referred you to. We have not authorized any person
to provide you with any information that is different.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have filed the following documents with the Commission. We are
incorporating these documents in this Prospectus, and they are a part of this
Prospectus.
(1) Our Annual Report on Form 10-K for the year ended December 31,
1998, which we amended by three amendments on Form 10-K/A;
(2) Our Quarterly Reports on Form 10-Q for the quarter ended March 31,
1999;
(3) Our Proxy Statement for our 1998 Annual Meeting of Stockholders;
(4) Our Current Report on Form 8-K, dated March 25, 1999, which we filed
with the Commission on March 30, 1999; and
(5) Our registration statement on Form 8-A, which became effective on
August 13, 1996.
We are also incorporating by reference in this Prospectus all documents
which we file pursuant to Section 13(a), 13(c), 14 or 15 of the Securities
Exchange Act of 1934, as amended, after the date of this Prospectus. Such
documents are incorporated by reference in this Prospectus and are a part this
Prospectus from the date we file the documents with the Commission.
If we file with the Commission any document that contains information
which is different from the information contained in this Prospectus, you may
rely only on the most recent information which we have filed with the
Commission.
We will provide a copy of the documents referred to above without charge
if you request the information from us. However, we may charge you for the cost
of providing any exhibits to any of these documents unless we specifically
incorporate the exhibits in this Prospectus. You should contact Mr. Anthony F.
Grisanti, Chief Financial Officer, Netsmart Technologies, Inc., 146 Nassau
Avenue, Islip, New York 11751, telephone (516) 968-2000, if you wish to receive
any of such material.
- 2 -
<PAGE>
RISK FACTORS
This prospectus contains statements that plan or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies and the market for our products and most other statements that
are not historical in nature. In this prospectus, forward-looking statements are
generally identified by the words "anticipate," "plan," "believe," "expect,"
"estimate" and similar words. Because forward-looking statements involve future
risks and uncertainties, there are factors that could cause actual results to
differ materially from those expressed or implied, including, but not limited
to, those identified under "Risk Factors" in this prospectus and in our Form
10-K for 1998, those described in Management's Discussion and Analysis of
Financial Conditions and Results of Operations in our Form 10-K for 1998 and our
Form 10-Q for the quarter ended March 31, 1999, and those described and in any
other filings which are incorporated by reference in this prospectus, as well as
general economic conditions.
An investment in our Common Stock involves a high degree of risk. You
should consider carefully, along with other factors, the following risks and
should consult with your own legal, tax and financial advisors.
We require additional capital.
-------------------------------
We had working capital of $532,000 at March 31, 1999. Our cash position
decreased from $199,000 at December 31, 1998 to $122,000 at March 31, 1999. We
require substantial additional capital in order to expand and develop our
business and perform our obligations under our agreements and purchase
orders. We have no commitments from any person to provide us with any such
capital. Our business may suffer significantly if we do not obtain the capital
when it is required.
We are dependent upon government contracts.
- ----------------------------------------------
We market our health information systems principally to behavioral
health care facilities, many of which are operated by government entities
and include entitlement programs. During 1998, we generated 52% of our
revenue from contracts with government agencies, as compared with 34% in 1997
and 31% in 1996. Government agencies generally have the right to cancel
contracts at their convenience.
Our business is subject to the effect of technological advances and
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possible product obsolescence.
- -----------------------------
Our customers require software which enables them to store, retrieve and
process very large quantities of data and to provide them with instantaneous
communications among the various data bases. Our business requires us to take
advantage of recent advances in software, computer and communications
technology. This technology has been developing at rapid rates in recent years,
and our future may be dependent upon our ability to use and develop or
obtain rights to products utilizing such technology. New technology may
develop in a manner which may make our software obsolete. Our inability to
use new technology would have a significant adverse effect upon our business.
Our industry is highly competitive.
- ----------------------------------
Our customers in the human services market include entitlement programs,
managed care organizations, specialty care facilities and other major
information technology users which have a need for access to information over a
distributed data network. The software industry in general, and the health
information software business in particular, are highly competitive. Other
companies have the staff and resources to develop competitive systems. We may
not be able to compete successfully with such competitors.
The health information systems business is served by a number of major
companies and a larger number of smaller companies, many of which are better
capitalized, better known and have better marketing staffs than we have, and we
may not be able to compete effectively with such companies. We believe that
price competition is a significant factor in our ability to market our health
information systems and services.
We depend on our management.
- ---------------------------
Our business is largely dependent upon our senior executive officers,
Messrs. James L. Conway, president and chief executive officer, Anthony F.
Grisanti, chief financial officer, John F. Philips, vice president --
marketing, and Gerald O. Koop, vice president of the Company and chief
executive officer of our operating subsidiary, Creative Socio-Medics Corp.
We have employment agreements with Messrs. Conway, Grisanti, Phillips and Koop.
Our business may be adversely affected if any of our key management
personnel or other key employees left our employ.
We lack patent protection.
- -------------------------
We have no patent or copyright protection for our proprietary software.
We are subject to the effect of government regulations of health care
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industry.
- --------
We derive substantially all of our revenue from our health information
systems and services. The federal and state governments have adopted numerous
regulations relating to the health care industry, including regulations relating
to the payments to health care providers for various services. The adoption of
new regulations can have a significant effect upon the operations of health care
providers, particularly those operated by state agencies. We cannot predict the
effect on our business of future regulations by governments and payment
practices by government agencies. Furthermore, changes in state regulations in
the health care field may force us to modify our health information systems to
meet any new record-keeping or other requirements. If that happens, we may not
be able to generate revenues sufficient to cover the costs of developing the
modifications. In addition, we may lose business if government agencies reduce
funding for entitlement programs.
- 3 -
<PAGE>
<TABLE>
We do not anticipate paying dividends on our common stock.
- ----------------------------------------------------------
We presently intend to retain future earnings, if any, in order to provide
funds for use in the operation and expansion of our business and,
accordingly, we do not anticipate paying cash dividends on our Common Stock in
the foreseeable future.
The rights of the holders of common stock may be impaired by the
- ------------------------------------------------------------------------
potential issuance of preferred stock.
- --------------------------------------
Our certificate of incorporation gives our board of directors the right to
create new series of preferred stock. As a result, the board of directors
may, without stockholder approval, issue Preferred Stock with voting,
dividend, conversion, liquidation or other rights which could adversely affect
the voting power and equity interest of the holders of common stock.
The preferred stock, which could be issued with the right to more than one
vote per share, could be utilized as a method of discouraging, delaying or
preventing a change of control. The possible impact on takeover attempts
could adversely affect the price of our common stock. Although we have no
present intention to issue any additional shares of preferred stock or to
create any series of preferred stock, we may issue such shares in the future. If
we issue preferred stock in a manner which dilutes the voting rights of the
holders of the common stock, our listing on The Nasdaq SmallCap Market may be
impaired.
Shares may be issued pursuant to warrants and options; and holders have
- ------------------------------------------------------------------------
certain registration rights.
- ----------------------------
We may issue stock upon the exercise of options to purchase up to an
aggregate 299,192 shares of common stock pursuant to our long-term
incentive plans. In November 1998, we amended one of our plans to increase
the number of shares of common stock subject to the plans by 500,000 and we
granted options for all of those shares, subject to stockholder approval of the
amendment to the plan. We have also outstanding warrants to purchase 287,500
shares of common stock at an exercise price of $6.00 per share and 448,541
shares of common stock at an exercise price of $12.00 per share. These
warrants (the "Series B Warrants") expire December 31, 1999. During the term of
such options and warrants, the holders will have the opportunity to profit from
a rise in the market price of the common stock, and their exercise may dilute
the book value per share of the common stock. The holders of Series B Warrants
have certain demand and piggyback registration rights. We will bear the cost of
preparing such registration statements but will not receive any proceeds from
the sale of shares of common stock pursuant thereto other than payment of the
exercise price of the options or warrants being exercised. The existence of
these registration rights, as well as the sale of shares of common stock
pursuant to any registration statements which we may be required to prepare, may
have a depressive effect on the price of the common stock in the open market.
SELLING STOCKHOLDERS
The following table sets forth as of July 31, 1999:
* The names of the selling stockholders.
* Any position, office or other material relationship which the
selling stockholders had with us or our affiliates during the
last three years.
* The number of shares of common stock owned by the selling stockholders
prior to the offering o The number of shares of common stock offered
by the selling stockholders o The number of shares of common
stock the selling stockholders would own if they sell all of the
shares they are offering.
Shares of Shares of
Common Stock Common Stock Shares of Percentage
Owned Prior Offered For Account Common Stock Owned
Selling Stockholder to Offering (1) of Selling Stockholder Owned After Offering After Offering
------------------- ----------- ---------------------- -------------------- --------------
<S> <C> <C> <C> <C>
Sagemark
Companies Ltd.(2) 201,875 201,875 0 --
SIS Capital Corp.(3) 201,875 201,875 0 --
James L. Conway(4) 151,582 26,000 125,582 4.65%
Edward D. Bright(5) 141,422 62,500 78,922 2.66%
John F. Phillips(6) 148,922 75,000 73,922 2.49%
Gerald O. Koop(7) 102,823 44,600 58,223 1.96%
Anthony F. Grisanti(8) 73,061 20,600 52,461 1.77%
Joseph G. Sicinski(9) 2,000 12,000 10,000 *
Oscar Schachter(10) 40,878 17,100 23,778 *
Lorraine Semsky 25,000 25,000 0 --
Nancy Brill(10) 70,565 60,000 10,565 *
John Hunter 8,000 8,000 0 --
John Friel 7,500 7,500 0 --
</TABLE>
- 4 -
<PAGE>
<TABLE>
Shares of Shares of
Common Stock Common Stock Shares of Percentage
Owned Prior Offered For Account Common Stock Owned
Selling Stockholder to Offering (1) of Selling Stockholder Owned After Offering After Offering
- ------------------- ------------ ---------------------- -------------------- --------------
<S> <C> <C> <C> <C>
Jeffery C. Ames and
Elizabeth C. Ames 10,000 10,000 0 --
Fred Melton 2,000 2,000 0 --
Ronald Marge(10) 1,750 1,750 0 --
John R. Langley and
Margaret L. Langley
revocable living trust
dtd 11/15/91 25,000 25,000 0 --
Leonard and Bernice
Davidson Family Trust 10,000 10,000 0 --
Dr. Bernard Greenblatt,
Trustee Bernard
Greenblatt Living Trust
dtd 07/15/96 90,000 90,000 0 --
Gary Barber 25,000 25,000 0 --
Nick Burford 12,500 12,500 0 --
Mary Morse 7,500 7,500 0 --
Charles Gibson(10) 5,000 5,000 0 --
Lewis Cordina(10) 46,375 17,100 29,275 *
Allan Tillinghast(10) 16,210 12,500 3,710 *
Kenneth Sheiffer 10,000 10,000 0 --
Rich Labelle 2,500 2,500 0 --
Knoll-Smith Partnership 10,000 10,000 0 --
Richard and Michelle
Knoll 10,000 10,000 0 --
James Gargiulo(10) 43,275 14,000 29,275 *
Joseph McGovern(10) 55,897 22,100 33,797 *
Linda Muller 12,500 12,500 0 --
Joseph C. Pearsall 2,000 2,000 0 --
Asher S. Levitsky(11) 4,000 4,000 0 --
Asher S. Levitsky P.C. --
Defined Benefit Plan(11) 2,000 2,000 0
Ed Richman 5,000 5,000 0 --
Peter Parrinello 5,000 5,000 0 --
Robert Martins 5,000 5,000 0 --
Glen R. Charles 8,000 8,000 0 --
Gary Cohen 15,000 15,000 0 --
Gerard Conway 10,000 10,000 0 --
Denis Weber 15,000 15,000 0 --
James B. Liberman(12) 5,000 5,000 0 --
Kenneth R. Asher(12) 5,000 5,000 0 --
Martin S. Siegel(12) 7,500 7,500 0 --
Jesse R. Meer(12) 7,500 7,500 0 --
Richard Knoll 10,000 10,000 0 --
Ryan Sasson 30,874 30,874 0 --
</TABLE>
- 5 -
<PAGE>
- ----------
(*) Less than 1%.
(1) The number of shares of common stock owned by the selling stockholders
includes shares of common stock issuable upon the exercise of options or
warrants that are currently exercisable or will become exercisable
within 60 days of June 2, 1999, except as otherwise noted below. We do
not consider options granted pursuant to an amendment (the "1998
Amendment") to our 1998 long-term incentive plan to be currently
exercisable since they are subject to stockholder approval of the
amendment.
(2) Sagemark Companies Ltd. was formerly known as Consolidated Technology
Group Ltd.
(3) The shares owned by SIS Capital Corp. are deemed to be beneficially
owned by Sagemark Companies, which is the sole stockholder of SIS
Capital. During the first three months of 1998, 1997 and the last four
months of 1996, we had a management services contract with a subsidiary
of Sagemark Companies, pursuant to which we paid $45,000 in 1998,
$180,000 in 1997 and $60,000 in 1996. Sagemark Companies is a public
company which had been engaged in various business.
(4) Mr. Conway has been has been our president and a director since January
1996 and our chief executive officer since April 1998. From 1993 until
April 1998, he was president of S-Tech, which, until April 1998, was a
wholly-owned subsidiary of Sagemark Companies that manufactures
specialty vending equipment for postal, telecommunication and other
industries. Previously, Mr. Conway was Senior Vice President and
Treasurer of ITT Credit Corporation and served as a member of its Board
of Directors.Shares owned by Mr. Conway include (a) 20,000 shares of
Common Stock issuable upon exercise of options, (b) 53,333 shares of
common stock issuable upon exercise of warrants that have exercise
prices of $6.00 (18,333 shares) and $12.00 (35,000 shares), and (c)
23,916 shares of common stock issuable upon exercise of warrants held by
Mr. Conway's wife that have exercise prices of $6.00 (9,666 shares) and
$12.00 (14,250 shares). Mr. Conway disclaims beneficial interest in the
securities owned by his wife. In addition, Mr. Conway was granted an
option to purchase 50,000 shares of common stock pursuant to the 1998
Amendment.
(5) Mr. Bright has been our chairman of the board and a director since April
1998. He is also a member of the audit and compensation committees of
the board of directors. From January 1996 until April 1998, Mr. Bright
was an executive officer of or advisor to our subsidiary, Creative
Socio-Medics. Shares owned by Mr. Bright include 17,500 shares of common
stock issuable upon the exercise of options. In addition, Mr. Bright was
granted an option to purchase 45,000 shares of Common Stock pursuant the
1998 Amendment.
(6) Mr. Phillips has been one of our directors and vice president of
Creative Socio-Medics since June 1994 and our vice president-marketing
since 1996. Shares owned by Mr. Phillips include 39,000 shares of common
stock issuable upon the exercise of options. In addition, Mr. Phillips
was granted an option to purchase 50,000 shares of Common Stock pursuant
the 1998 Amendment.
(7) Mr. Koop has been one of our directors since June 1998. He has held
management positions with Creative Socio- Medics for more than the past
five years, most recently as its chief executive officer, a position he
has held since 1996. Shares owned by Mr. Koop include 37,984 shares of
common stock issuable upon the exercise of options. In addition, Mr.
Koop was granted an option to purchase 50,000 shares of common stock
pursuant the 1998 Amendment.
(8) Mr. Grisanti has been our treasurer since June 1994, secretary since
February 1995 and chief financial officer since January 1996. Shares
owned by Mr. Grisanti include 35,000 shares of common stock issuable
upon the exercise of options. In addition, Mr. Grisanti was granted an
option to purchase 50,000 shares of common stock pursuant the 1998
Amendment.
(9) Mr. Sicinski has been one of our directors since June 1998. Mr. Sicinski
is a member of the audit and compensation committees of the board of
directors. He is president and a director of the Trans Global, a
position he held with Trans Global and its predecessor since September
1992. Since April 1998, he has also been chief executive officer of
Trans Global. Shares owned by Mr. Sicinski include 10,000 shares of
common stock issuable upon the exercise of options. In addition, Mr.
Sicinski was granted an option to purchase 10,000 shares of common stock
pursuant the 1998 Amendment.
(10) Includes shares of common stock issuable upon options held by the
following employees: Mr. Schachter -- 40,878 shares; Ms. Brill -- 70,565
shares; Mr. Marge -- 1,750 shares; Mr. Gibson -- 5,000 shares; Mr.
Cordina -- 46,375 shares; Mr. Tillinghast -- 16,210 shares, of which 939
shares of common stock are issuable upon exercise of options held by Mr.
Tillinghast's wife, as to which Mr. Tillinghast disclaims beneficial
ownership, Mr. Gargiulo -- 43,275 shares; and Mr. McGovern -- 55,897
shares. The shares held by employees do not include shares issuable upon
options granted pursuant to the 1998 Amendment as follows: Mr. Marge --
12,500 shares; Mr. Gibson -- 12,500 shares; Mr. Cordina -- 50,000
shares; Mr. Tillinghast -- 50,000 shares; Mr. Gargiulo -- 50,000 shares
and Mr. McGovern -- 50,000 shares.
- 6 -
<PAGE>
(11) Asher S. Levitsky P.C. is of counsel to the law firm of Esanu Katsky
Korins & Siger, LLP, which is counsel to the Company. Shares owned by
Mr. Levitsky include the shares owned by Asher S. Levitsky P.C. Defined
Benefit Plan, of which Mr. Levitsky is the sole trustee.
(12) Messrs. James B. Liberman, Kenneth R. Asher, Martin S. Siegel and R.
Jesse Meer are partners of the law firm of Berlack, Israels & Liberman,
LLP, which has served as special counsel for the Company.
PLAN OF DISTRIBUTION
The selling stockholders named under the caption "Selling Stockholders"
may sell up to 994,499 shares of common stock from time to time. These selling
stockholders may sell their shares
* On the Nasdaq SmallCap Market.
* To a broker-dealer, including a market maker, who purchases the shares
for its own account.
* In private transactions or by gift.
The selling stockholders may sell the shares at a negotiated price or at
the market price or both. They may sell their shares directly to the purchasers
or they may use brokers. If they use a broker, the selling stockholders may pay
a brokerage fee or commission or they may sell the shares to the broker at a
discount from the market price. The purchasers of the shares may also pay a
brokerage fee or other charge. The compensation to a particular broker-dealer
may exceed customary commissions. We do not know of any arrangements by any of
the selling stockholders for the sale of any of their shares.
The selling stockholders, other than SIS Capital, have agreed with us
that they will not sell the shares they purchased from SIS Capital during the
six month period following the date they purchased without our consent.
Thereafter, those selling stockholders who are our directors and executive
officers (Messrs. James L. Conway, Edward D. Bright, John F. Phillips, Gerald O.
Koop, Anthony F. Grisanti and Joseph B. Sicinski) have agreed to restrictions on
sale subsequent to such six month period. We may, in our discretion, release
them from the restrictions.
The selling stockholders other than SIS Capital acquired their shares
from SIS Capital pursuant to an agreement dated as of March 23, 1999 at a
purchase price of $2.014 per share.
The selling stockholders and broker-dealers, if any, acting in
connection with sales by the selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commission received by them and any profit on the resale by them of the
securities may be deemed to be underwriting discounts and commissions under the
Securities Act.
We have advised the selling stockholders that the anti-manipulative
rules under the Exchange Act, which are set forth in Regulation M, may apply to
their sales in the market. We have furnished the selling stockholders with a
copy of Regulation M, and we have informed them that they should deliver a copy
of this prospectus when they sell any shares.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
our counsel, Esanu Katsky Korins & Siger, LLP. One attorney who is of counsel to
that firm and his pension fund own an a total of 4,000 shares of common stock
and are selling stockholders with respect to those shares.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus to the extent and for the periods indicated in their reports have
been audited by Richard A. Eisner & Company, LLP , independent certified public
accountants, and Moore Stephens, P.C., independent certified public accountants,
and are included herein in reliance upon the authority of such firms as experts
in accounting and auditing in giving such reports.
- 7 -
<PAGE>
PART II
INFORMATION REQUESTED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Relevance.
---------------------------------------
The following documents have been filed by Netsmart Technologies, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission")
(File No. 0-21177) and are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1998, as amended by an amendment on Form 10-K/A;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999;
(3) The Company's Current Report on Form 8-K, dated March 25, 1999,
which we filed with the Commission on March 30, 1999;
(4) All other reports filed by the Company pursuant to Section 13(a)
and 15(d) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), since December 31, 1998; and
(5) The description of our common stock contained in our registration
statement on Form 8-A, which became effective on August 13, 1996.
All documents subsequently filed pursuant to Sections 13(a), 13(c), 14
and 15 of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities hereby have been sold or which deregisters
securities then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
of such documents.
The exhibit index appears on page II-3 of this Registration Statement.
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable
Item 6. Indemnification of Officers and Directors.
-----------------------------------------
Under the Delaware General Corporation Law ("DGCL"), a corporation may
indemnify any director, officer, employee or agent against expense (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with any specified threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) 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 proceeding, had
no reasonable cause to believe that his or her conduct was unlawful.
Article EIGHTH of the Registrant's Restated Certificate of
Incorporation provide for indemnification of directors and officers of the
Registrant to the fullest extent permitted by the DGCL.
The Company also maintains directors and officers liability insurance
("D&O Insurance"). The D&O Insurance covers any person who has been or is an
officer or director of the Company or of any of its subsidiaries for all
expense, liability and loss (including attorneys' fees, investigation costs,
judgments, fines, penalties and amounts paid or to be paid in settlement)
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, net of the deductible.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, offices or 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 Securities
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 hereunder, 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
Securities Act and will be governed by the final adjudication of such issue.
II-1
<PAGE>
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
5.1 Opinion of Esanu Katsky Korins & Siger, LLP.(1)
23.1 Consent of Richard A. Eisner & Company, LLP (Page II-5)
23.2 Consent of Moore Stephens, P.C. (Page II-6)
23.3 Consent of Esanu Katsky Korins & Siger, LLP (contained in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page).
- ----------
(1) To be filed by amendment.
Item 9. 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, as amended
(the "Securities Act");
(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. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(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;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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 that time shall be deemed
to be the initial bona fide offering thereof.
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
II-2
<PAGE>
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 Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Islip, State of New York on this th day of
August, 1999.
NETSMART TECHNOLOGIES, INC.
By: /s/ James L. Conway
--------------------------
James L. Conway, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons on behalf
of the registrant and in the capacities and on the dates indicated. Each person
whose signature appears below hereby authorizes James L. Conway and Anthony F.
Grisanti or either of them acting in the absence of the others, as his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission.
Signature Title Date
- --------- ----- ----
/s/ James L. Conway
- -------------------- President, Chief Executive Officer August 16, 1999
James L. Conway and Director
(Principal Executive Officer)
/s/ Anthony F. Grisanti Chief Financial Officer August 16, 1999
- -----------------------
Anthony F. Grisanti
(Principal Financial
and Accounting Officer)
/s/ Edward D. Bright Director August 16, 1999
- -----------------------
Edward D. Bright
/s/ John F. Phillips Director August 16, 1999
- -----------------------
John F. Philips
/s/ Gerald O. Koop Director August 16, 1999
- -----------------------
Gerald O. Koop
Director August 16, 1999
- -----------------------
Joseph G. Sicinski
II-4
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated March 23, 1999 (with respect to Note 17, April
8, 1999) with respect to the financial statements of Netsmart Technologies, Inc.
(the "Company"), as amended which was included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, as amended on Form 10-K/A, and
to the use of our name, and the statements with respect to us as appearing under
the heading "Experts" in the prospectus.
II-5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF OPERATIONS
FILED AS PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 137,572
<SECURITIES> 0
<RECEIVABLES> 5,476,673
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,043,517
<PP&E> 451,200
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,287,231
<CURRENT-LIABILITIES> 8,077,445
<BONDS> 0
0
0
<COMMON> 18,547,472
<OTHER-SE> (60,000)
<TOTAL-LIABILITY-AND-EQUITY> 12,287,231
<SALES> 10,806,887
<TOTAL-REVENUES> 10,806,887
<CGS> 7,062,093
<TOTAL-COSTS> 2,874,480
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,075
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 740,239
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 740,239
<EPS-BASIC> .26
<EPS-DILUTED> .22
</TABLE>
