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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
November 15, 1999
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(Date of Report)
Claimsnet.com inc.
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(Exact name of registrant as specified in its charter)
Delaware 001-14665 75-2649230
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12801 N. Central Expressway, Suite 1515, Dallas, Texas 75243
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(Address of principal executive offices)
(972) 458-1701
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
GENERAL
Effective October 27, 1999, Claimsnet.com inc., a Delaware corporation
(the "Company"), entered into a strategic relationship with McKesson HBOC, Inc.
("McKesson HBOC"), a leading health care supply management company in North
America which provides software solutions, technological innovation and
comprehensive services to the health care industry, pursuant to which the
Company and McKesson HBOC (i) entered into a Development and Services Agreement
(the "License Agreement") relating to a portion of the proprietary technology of
the Company and (ii) McKesson HBOC acquired the right to acquire an interest in
the Company, together with registration rights relating to the disposition of
such interest.
LICENSE AGREEMENT
The License Agreement provides that the Company shall convert its
Services.now service and related Web interface to integrate with the existing
EDI system of McKesson HBOC and will provide for McKesson HBOC a unique look and
feel approved thereby together with graphical changes and content approved
thereby. The Company commenced the development of the software and related
documentation to be delivered pursuant to the License Agreement immediately
following the execution of such agreement. In consideration for such development
efforts, the Company will be paid a development fee in installments subject to
the completion of designated milestones.
The License Agreement grants to McKesson HBOC a license to such
software and related documentation for a period of three years commencing on the
date that the software in final form is brought fully on line by McKesson HBOC
and used to process transactions for the clients of McKesson HBOC (the "Live
Processing Date"). In consideration for such license, the Company will be paid
license fees in three equal installments, one of which is within 30 days of the
Live Processing Date, the second of which is on the first anniversary of the
Live Processing Date, and the third of which is on the second anniversary of the
Live Processing Date.
In addition, pursuant to the License Agreement, McKesson HBOC shall pay
to the Company a monthly subscription fee and transaction fees per HCFA, per
paper claim, per remittance advice, and per statement in certain circumstances.
WARRANTS
In connection with the execution of the License Agreement, the Company
entered into a Securities Purchase Agreement whereby, among other things, the
Company issued McKesson a warrant exercisable for an aggregate of 819,184 shares
of the Company's common stock, or 10% of the Company's common stock on a
fully-diluted basis (the "Warrant") on the effective date of such agreement. The
Warrants are exercisable though October 27, 2002. In addition, the Company
entered into a Registration Rights Agreement with McKesson which allows
McKesson, subject to
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certain conditions, to register the shares of the Company's common stock
issuable upon exercise of the Warrant, pursuant to the Securities Act of
1933, as amended.
A copy of the press release disclosing information relating to the
consummation of the transaction and certain related matters is attached as an
exhibit to this report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: NOVEMBER 15, 1999
CLAIMSNET.COM INC.
BY: /s/ BO W. LYCKE
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BO W. LYCKE
CHAIRMAN OF THE BOARD OF DIRECTORS,
PRESIDENT, AND CHIEF EXECUTIVE OFFICER
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FOR IMMEDIATE RELEASE
For more information, please contact:
<TABLE>
<S> <C> <C>
Paul Miller, Chief Financial Officer Doris Banchik, Investor Relations Kimberly Kraemer
Claimsnet.com inc. Banchik & Associates McKesson HBOC, Inc.
(800) 356-1511 (805) 688-2340 (415) 983-8416
[email protected] [email protected]
</TABLE>
MCKESSON HBOC, INC. SIGNS MASTER LICENSING AGREEMENT FOR
CLAIMSNET.COM'S INTERNET CLAIMS PROCESSING TECHNOLOGY
TO RAPIDLY CO-DEVELOP A POWERFUL MCKESSON HBOC INTERNET CLAIMS PROCESSING
SERVICE FOR INDEPENDENT PHYSICIAN PRACTICES
DALLAS AND SAN FRANCISCO, - November 15, 1999 - Claimsnet.com inc. (NASDAQ:
CLAI; BSE: CLA) a leading applications service provider (ASP) for online
healthcare transaction processing, today announced that McKesson HBOC, Inc.
(NYSE: MCK) has signed a three-year, master licensing agreement for
Claimsnet.com's proprietary Internet claims processing technology.
McKessonHBOC is the leading provider of information technology services in
the worldwide healthcare market. Under the terms of the agreement,
Claimsnet.com will be integrating its proprietary Internet-based claims
processing technology into selected McKessonHBOC's electronic commerce
solutions, for the purposes of better serving the claims processing needs of
the independent physician practice market.
While the specific terms of the agreement were not released, Claimsnet.com
will be receiving a one-time development fee in addition to licensing fees,
subscription fees and transaction fees throughout the three-year term of the
license. In conjunction with this agreement, Claimsnet.com granted
McKessonHBOC a warrant to purchase up to ten percent of the current
outstanding common shares of Claimsnet.com, on a fully diluted basis.
Claimsnet.com's leading Internet-based claims processing technology allows for
the most rapid, secure and cost-effective transmission of patient claims in
the United States today. It is Y2K compliant and meets or exceeds all of the
requirements of the HCFA Internet Security Policy. It accepts standard output
from a provider organization's existing practice management system thereby
enhancing the practice's IT investment. The master licensing agreement issued
to McKessonHBOC includes claims processing and patient statement technology.
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"Claimsnet.com's Internet-based technology complements our existing
e-commerce capabilities for the physician practice market," said David
Mahony, co-chief executive officer for McKessonHBOC. "It also gives us
exciting new offerings that will expand our footprint in the small practice
market with competitively priced solutions that connect physicians with
health plans and payors."
"We are very pleased with this extraordinary business development and feel
that this event, above all else to date, verifies the distinct advantages of
our Internet technology for the healthcare provider market. McKessonHBOC is
the healthcare information system industry giant, with the largest share of
the worldwide provider market", commented Bo W. Lycke, chairman and chief
executive officer of Claimsnet.com. "The combination of our technology and
McKessonHBOC's muscle in the healthcare information systems market represents
a very powerful force with which to penetrate the physician practice market.
We certainly look to this master license as the beginning of our relationship
with McKessonHBOC, as the potential synergies between the companies are
extensive."
San Francisco-based, McKessonHBOC, Inc. is a Fortune 60 corporation and the
world's largest supply management and healthcare information technology
company. McKessonHBOC provides supply management and information technologies
across the entire continuum of healthcare, including market-leading
businesses in pharmaceutical and medical-surgical distribution, automation,
information technology and outsourcing services for healthcare providers and
payers. More information about McKessonHBOC is available at www.mckhboc.com.
Claimsnet.com inc. is a leading applications service provider (ASP) for
online healthcare transaction processing for the medical and dental
industries. Headquartered in Dallas, Texas, Claimsnet.com offers a
proprietary system that is distinguished by its pure Internet technology,
ease of use, customer care, security and measurable cost advantages.
Claimsnet.com trades on the Nasdaq SmallCap under the symbol CLAI and on the
Boston Stock Exchange under the symbol CLA. More information on Claimsnet.com
can be found at www.claimsnet.com.
This news release contains forward-looking statements as that term is defined
in the Private Securities Litigation Reform Act of 1995. Such statements are
based on the current expectations of management and are subject to a number
of risk factors and uncertainties that could cause actual results for
performance of the company to differ materially from those described herein.
These expectations are based in part upon judgments with respect to, among
other things, future economic, political, competitive, and market conditions,
and future business decisions, all of which are difficult or impossible to
predict accurately and many of which are beyond our control. Although we
believe that the assumptions underlying our forward-looking statements are
reasonable, any of the assumptions could prove inaccurate.
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