<TABLE>
As filed with the Securities and Exchange Commission on December 28, 1999
Registration No. 333-91907
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
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 (I.R.S. Employer Identification No.)
of incorporation or organization)
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
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(1) offering price(1) registration fee
- ----------------------------------------------------------------------------------------------------------
Common Stock, par 808,026 shares(2) $9.03 $7,296,474.78 $1,926.27
value $.01 per share
(1) Estimated solely for the purpose of calculating the registration fee, in
accordance with Rule 457(c) under the Securities Act of 1933, as
amended, on the basis of the average exercise price of warrants. All
shares of common stock are issuable pursuant to the warrants.
(2) Pursuant to Rule 416, there are also being registered such number of
additional shares of common stock as may be required pursuant to the
antidilution provisions of the warrants.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effectiveness until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
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</TABLE>
<PAGE>
PROSPECTUS
808,026 Shares
NETSMART TECHNOLOGIES, INC.
Common Stock
Nasdaq SmallCap Market Trading Symbol: NTST
The selling stockholders may sell up to 808,026 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 also:
* pledge their shares from time to time, and the lender may sell
the shares upon foreclosure.
* sell their warrants in a private transaction or transfer them as
a gift, and the purchasers of the warrants may exercise the
warrants and sell the underlying shares of common stock.
The shares are being offered by the selling stockholders and are
issuable upon exercise of outstanding warrants held by the selling stockholders.
We will only receive proceed from the exercise of the warrants. We will not
receive any proceeds from the sale by the selling stockholders of their shares
of common stock. 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 2.
--------
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 , 2000
<PAGE>
TABLE OF CONTENTS
Page
----
Risk Factors 2
Use of Proceeds 4
Selling Stockholders 4
Plan of Distribution 6
Available Information 6
Incorporation of Certain Documents by Reference 7
Legal Matters 7
Experts 7
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 September 30, 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.
If we are unable to obtain additional capital, we may not be able to
develop our business and perform our contract obligations. We had working
capital of $1.4 million at September 30, 1999. Our cash position decreased from
$199,000 at December 31, 1998 to $80,000 at September 30, 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.
Because we are dependent upon government contracts, our business may be
impaired by policies relating to entitlement programs. 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 35% in 1997 and 31% in 1996. Government agencies
generally have the right to cancel contracts at their convenience. In addition,
we may lose business if government agencies reduce funding for entitlement
programs.
Our business is based on providing systems relating to behavioral health
organizations, and changes in government regulation of health care industry may
affect the market for our systems. 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, and our systems are designed to provide
information based on these requirements. 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 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.
If we are not able to take advantage of technological advances, our
business may suffer. 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.
- 2 -
<PAGE>
Because of our size, we may have difficulty competing with larger
companies that offer similar services. 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.
Because we are dependent on our management, the loss of key executive
officers could harm our business. 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. Although we have employment agreements with Messrs. Conway,
Grisanti, Phillips and Koop, these agreement do not guarantee that the officers
will continue with us. Our business may be adversely affected if any of our key
management personnel or other key employees left our employ.
Because we lack patent protection, we cannot assure you that others will
not be able to use our proprietary information in competition with us. We have
no patent or copyright protection for our proprietary software, and we rely on
non-disclosure agreements with our employees. Since our business is dependent
upon our proprietary products, the unauthorized use or disclosure of this
information could harm our business.
Our growth may be limited if we cannot make acquisitions. An important
part of our growth strategy is to acquire other businesses that are related to
our current business. Such acquisitions may be made with cash or our securities
or a combination of cash and securities. To the extent that we require cash, we
may have to borrow the funds or issue equity. We have no commitments from any
financing source and we may not be able to raise any cash necessary to complete
an acquisition. If we fail to make any acquisitions, our future growth may be
limited. As of the date of this prospectus, we do not have any agreement or
understanding, either formal or informal, as to any acquisition.
If we make any acquisitions, they may disrupt or have a negative impact
on our business. If we make acquisitions, we could have difficulty integrating
the acquired companies' personnel and operations with our own. In addition, the
key personnel of the acquired business may not be willing to work for us. We
cannot predict the affect expansion may have on our core business. Regardless of
whether we are successful in making an acquisition, the negotiations could
disrupt our ongoing business, distract our management and employees and increase
our expenses.
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 options which may affect the market
price of our common stock. We may issue stock upon the exercise of options to
purchase up to an aggregate 799,192 shares of common stock pursuant to our
long-term incentive plans.
USE OF PROCEEDS
We intend to utilize any net proceeds received from the exercise of the
warrants for working capital and other corporate purposes. We cannot assure you
that any warrants will be exercised. We believe that the net proceeds are likely
to range from zero to approximately $2.5 million. This estimate assumes that
warrants to purchase 488,563 shares at $12.00 per share, which expire on
February 29, 2000, expire unexercised. If any warrants are exercised, our
management will have broad discretion to determine the use the proceeds.
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<PAGE>
<TABLE>
SELLING STOCKHOLDERS
The following table and discussion sets forth:
* the name of each selling stockholder,
* the nature of any position, office or other material relationship, if
any, which the selling stockholder has had with us or any of our
affiliates within the last three years,
* the number of shares of common stock owned by each selling stockholder
as of December 31, 1999,
* the number of shares of common stock offered for each selling
stockholder's account, and
* the percentage owned by each selling stockholder after completion of
the offering.
The shares of common stock being sold pursuant to this prospectus are
issuable upon the exercise of outstanding warrants. Except for the warrants
issued to Dominick & Dominick LLC and Emerging Technology Ventures, Inc., which
are described below, the warrants expire on February 29, 2000 and are
exercisable at $6.00 per share as to 287,491 shares, and $12.00 per share as to
448,535 shares. In December 1999, we extended the expiration date of these
warrants from December 31, 1999 to February 29, 2000.
The following table includes, under the column headed "Number of Shares
Owned Prior to Offering" the shares of common stock issuable upon exercise of
the warrants held by such person as well as any other options or warrants which
are exercisable on December 31, 1999 or become exercisable on or prior to
February 29, 2000. The number of shares listed in the column headed "Number of
Shares Offered For Account of Selling Stockholder" represents the number of
shares of common stock issuable upon exercise of the warrants.
<S> <C> <C> <C> <C>
Number Number of
of Shares Shares Offered Number of Percentage
Owned Prior For Account of Shares Owned Owned
Selling Stockholder to Offering Selling Stockholder After Offering After Offering
------------------- ----------- -------------------- -------------- --------------
Lewis S. Schiller 105,553 105,553 0 --
Storm R. Morgan 88,166 87,500 666 *
Barbara Dyson 1,916 1,916 0 --
Kennan Kroll 1,000 1,000 0 --
Mike Libbee and Cindy Libbee 10,555 10,555 0 --
Raj R. Doodnauth 6,749 6,749 0 --
William Giblin 1,916 1,916 0 --
Bettyjean Kroll 2,166 2,166 0 --
James L. Conway 199,582 51,333 124,333 4.1%
Geraldine Conway 199,582 23,916 124,333 4.1%
James L. Conway, Jr. 5,000 5,000 -- --
Teresa Conway McTigue 5,000 5,000 -- --
Joanna Flecken 1,666 1,666 -- --
John Avena 1,196 666 530 *
Leonard M. Luttinger 52,083 52,083 -- --
Thomas L. Evans 12,500 12,500 -- --
Joel Brown 38,888 38,888 -- --
E. Gerald Kay 38,888 38,888 -- --
DLB, Inc. 41,319 41,319 -- --
Norman Hoskin 19,444 19,444 -- --
Martin Hodas 35,444 19,444 16,000 *
Grazyna B. Wnuk 19,444 19,444 -- --
The Trinity Group - I, Inc. 8,333 8,333 -- --
Ronald Feldstein 14,166 14,166 -- --
Elliot Davis, Inc. 14,166 14,166 -- --
Harold Halperin 833 833 -- --
Saggi Capital Corp. 78,958 78,958 -- --
SMACS Holdings, Inc. 38,541 38,541 -- --
Bridge Ventures, Inc. 40,416 40,416 -- --
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</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Number Number of
of Shares Shares Offered Number of Percentage
Owned Prior For Account of Shares Owned Owned
Selling Stockholder to Offering Selling Stockholder After Offering After Offering
------------------- ----------- ------------------- -------------- --------------
Henry Uffmann 2,333 2,000 333 *
Dominick & Dominick LLC 60,000 60,000 -- --
Emerging Technology Ventures, Inc. 12,000 12,000 -- --
- ----------
* Less than 1%.
Mr. Lewis S. Schiller was our chairman of the board and chief executive
prior to April 1998. In connection with his resignation, we exchanged general
releases with Mr. Schiller. The shares owned by The Trinity Group-I, Inc. are
deemed to be beneficially owned by Mr. Schiller. Mr. Schiller is the chairman
of the board of The Trinity Group -I. For more than five years prior to April
1998, Mr. Schiller was also chairman of the board and chief executive officer of
Consolidated Technology Group Ltd., now known as The Sagemark Companies Ltd.,
which, through a subsidiary was our largest stockholder.
Mr. Storm R. Morgan was a director from 1996 until June 1998. We had an
informal consulting agreement with SMI, Inc., a corporation of which Mr. Morgan
was the sole stockholder and an officer and director. In June 1998, we sold
our CarteSmart business to a corporation formed by Mr. Morgan and Mr. Leonard M.
Luttinger.
Mr. James L. Conway 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 Ltd. Shares owned by Mr. Conway and Geraldine
Conway, Mr. Conway's wife, include (a) 70,000 shares of Common Stock issuable
upon exercise of options owned by Mr. Conway, (b) 51,333 shares of common
stock issuable upon exercise of the warrants held by Mr. Conway, and (c) 23,916
shares of common stock issuable upon exercise of warrants held by Mrs. Conway.
Mr. and Mrs. Conway each disclaims beneficial interest in the securities owned
by the other. Shares included under the heading "Number of Shares Offered for
the Account of Selling Stockholder" include only the shares held by Mr. or
Mrs. Conway, as the case may be.
Mr. Leonard M. Luttinger was a director and executive officer until June
1998. In June 1998, we sold our CarteSmart business to a corporation formed by
Mr. Luttinger and Mr. Storm R. Morgan.
Messrs. E. Gerald Kay and Norman Hoskin were members of our board of
directors prior to April 1998. In connection with their resignation we
exchanged general releases with them.
DLB, Inc. is controlled by Ms. Carol Schiller. Ms. Schiller is the wife
of Mr. Lewis S. Schiller, and Mr. Schiller disclaims any beneficial interest in
DLB or in securities owned by DLB.
Saggi Capital Corp. is controlled by Ms. Sharon Will.
SMACS Holdings, Inc. and Bridge Ventures, Inc. are controlled by Mr.
Harris Freedman.
The shares being sold by Dominick & Dominick LLC are issuable upon
exercise of warrants issued pursuant to an financial advisory agreement we have
with Dominick & Dominick. Warrants to purchase a maximum of 100,000 shares of
common stock are issuable pursuant to that agreement. The shares included in
this prospectus reflect the shares issuable upon exercise of those warrants that
are outstanding as of January 5, 2000. The warrants are exercisable at $5.45 per
share until October 4, 2004. The shares owned by Dominick & Dominick do not
include any shares which that firm may own in its capacity as a market maker.
See "Plan of Distribution." Mr. Paul Kennedy is the president of Dominick.
The shares being sold by Emerging Technology Ventures, Inc. are issuable
upon exercise of warrants issued pursuant to an agreement we have with Emerging
Technology Ventures. Warrants to purchase a maximum of 20,000 shares of common
stock are issuable pursuant to that agreement. The shares included in this
prospectus reflect the shares issuable upon exercise of those warrants that are
outstanding as of January 5, 2000. The warrants are exercisable at $4.20 per
share until October 4, 2004. Mr. Francis X. Murphy is president of Emerging
Technology Ventures.
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</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders named under the caption "Selling Stockholders"
may sell up to 808,026 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 also:
* pledge their shares from time to time, and the lender may sell
the shares upon foreclosure.
* sell their warrants in a private transaction or transfer them as
a gift, and the purchasers of the warrants may exercise the
warrants and sell the underlying shares of common stock.
The shares of common stock offered by the selling stockholders are
issuable upon exercise of warrants held by the selling stockholders. None of
such warrants have been exercised as of the date of this prospectus.
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 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.
Dominick & Dominick LLC, one of the selling stockholders, is a
registered broker-dealer and presently makes a market in our stock. This firm
may continue to make a market in our stock. However, as long as a distribution
is taking place and to the extent that Dominick & Dominick continues to make a
market in our stock, Dominick & Dominick will designate itself as a "passive
market maker" under Regulation M of the Exchange Act and will limit its market
making activities in accordance with applicable regulations.
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.
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 read and copy any material we file with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy
and information statements and other information regarding issues that file
electronically with the SEC. The address of such site is http//www.sec.gov.
We have filed a registration statement with the SEC 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 SEC's Public Reference Room or its Internet 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
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<PAGE>
We have filed the following documents with the SEC. 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 quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999;
(3) Our Proxy Statement for our 1999 Annual Meeting of Stockholders;
(4) Our Current Report on Form 8-K, dated March 25, 1999, which we
filed with the SEC 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 SEC.
If we file with the SEC 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 SEC.
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.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon by
our counsel, Esanu Katsky Korins & Siger, LLP. An attorney who is of counsel at
such firm and the defined benefit plan for such attorney own a total of 4,000
shares of common stock.
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 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
The Registrant estimates that the legal, accounting and filing fees
relating to this Registration Statement will be approximately $10,000.
Item 15. Indemnification of Officers and Directors.
-----------------------------------------
Under the Delaware General Corporation Law, 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 Delaware General Corporaiton
Law.
We also maintain directors and officers liability insurance. This
insurance covers any person who has been or is an officer or director of us or
any of our 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, officers 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.
Item 16. Exhibits
--------
5.1 Opinion of Esanu Katsky Korins & Siger, LLP(1)
23.1 Consent of Richard A. Eisner & Company, LLP(2)
23.2 Consent of Moore Stephens, P.C.(2)
23.3 Consent of Esanu Katsky Korins & Siger, LLP
(contained in Exhibit 5.1)
24.1 Power of Attorney(2)
- ----------
(1) Filed herewith
(2) Previously filed.
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, 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
II-1
<PAGE>
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 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-2
<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-3 and has duly caused this Amendment
to 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 28th
day of December, 1999.
NETSMART TECHNOLOGIES, INC.
By: James L. Conway
---------------------
James L. Conway, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to this registration statement has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature Title Date
- --------- ----- ----
s/ James L. Conway* President,
- ------------------- Chief Executive Officer December 28, 1999
James L. Conway and Director
(Principal Executive Officer)
s/Anthony F. Grisanti* Chief Financial Officer December 28, 1999
- ----------------------
Anthony F. Grisanti
(Principal Financial
and Accounting Officer)
*By James L. Conway
------------------
James L. Conway
s/Edward D. Bright* Director Attorney-in-Fact
- ---------------------
Edward D. Bright
s/John F. Phillips* Director December 28, 1999
- ---------------------
John F. Philips
s/ Gerald O. Koop* Director December 28, 1999
- ----------------------
Gerald O. Koop
s/Joseph G. Sicinski Director December 28, 1999
- ----------------------
Joseph G. Sicinski
II-3
Securities and Exchange Commission
December 7, 1999
Page 1
Exhibit 5.1
Esanu Katsky Korins & Siger, LLP
605 Third Avenue
New York, New York 10158
Telephone: (212) 953-6000
Fax: (212) 953-6899
December 28, 1999
Securities and Exchange Commission 13146-002
450 Fifth Street, NW
Washington, D.C. 20549
Re: Netsmart Technologies, Inc.; File No. 333-91907
Ladies and Gentlemen:
We refer to the registration statement on Form S-3, File. No. 333-91907
(the "Registration Statement"), under the Securities Act of 1933, as amended
(the "Act"), filed by Netsmart Technologies, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission. Terms defined in the
Registration Statement and not otherwise defined in this opinion shall have the
same meanings in this opinion as in the Registration Statement.
We have examined the originals or photocopies or certified copies of
such records of the Company, certificates of officers of the Company and public
officials, and other documents as we have deemed relevant and necessary as a
basis for the opinion hereinafter expressed. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as certified copies or photocopies and the authenticity of the
originals of such latter documents.
Based on our examination mentioned above, we are of the opinion that the
shares of common stock registered pursuant to the Registration Statement have
been duly authorized and when issued upon exercise of the warrants as described
in the Registration Statement, will be duly issued, fully paid and
non-assessable.
Please note that Asher S. Levitsky, who is of counsel to this firm, and
the Asher S. Levitsky P.C. Defined Benefit Plan, of which Mr. Levitsky is the
trustee and beneficiary, are stockholders of the Company.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under "Legal Matters" in
the related Prospectus. In giving the foregoing consent, we do not hereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
ESANU KATSKY KORINS & SIGER, LLP
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