SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 27, 2000
(February 14, 2000)
CAREINSITE, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-26345 22-3630930
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
669 River Drive, River Drive Center II,
Elmwood Park, NJ 07407-1361
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (201) 703-3400
Exhibit Index appears on page 3
<PAGE>
Item 2. Acquisition or Disposition of Assets
On February 14, CareInsite, Inc. ("CareInsite" or the "Company") agreed
to acquire substantially all of the assets of Provider Technology Group ("PTG"),
the e-commerce network of Blue Cross Blue Shield of Massachusetts ("BCBSMA"),
for $26,500,000 in cash and 651,968 shares of the Company's common stock (the
"Acquisition"). Pursuant to the asset purchase agreement, if BCBSMA does not
realize at least $22,500,068 in proceeds from the sale of half (325,984) of the
common shares issued, the Company has agreed to pay BCBSMA an amount equal to
such shortfall in cash. Accordingly, the fair value of 325,984 of the common
shares issued was $69.022. The fair value of the remaining 325,984 shares of
common stock, as determined by management was $40.646 per share. The Acquisition
will be accounted for using the purchase method of accounting.
2
<PAGE>
The undersigned registrant hereby amends Item 7 of its Current Report
8-K, originally filed by the registrant with the Securities and Exchange
Commission on April 10, 2000, as follows:
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The following historical financial statements and notes thereto are of PTG prior
to the consummation of the Acquisition and are attached hereto at pages F-1 to
F-8
o Report of Independent Auditors.
o Balance sheets as of December 31, 1999 and December 31, 1998.
o Statements of Operations and Changes in Divisional Equity for
the years ended December 31, 1999 and December 31, 1998.
o Statements of Cash Flows for the years ended December 31, 1999
and December 31, 1998.
o Notes to Financial Statements.
(b) Pro forma financial information.
The following pro forma financial statements and notes thereto are
attached hereto at pages PF-1 to PF-6:
o Pro Forma Combined Condensed Consolidated Statement of
Operations (unaudited) for the year ended June 30, 1999.
o Pro Forma Combined Condensed Consolidated Statement of
Operations (unaudited) for the six months ended December 31,
1999.
o Pro Forma Combined Condensed Consolidated Balance Sheet
(unaudited) as of December 31, 1999.
o Notes to Pro Forma Combined Condensed Consolidated Financial
Statements (unaudited).
3
<PAGE>
SIGNATURES
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.
CAREINSITE, INC.
Date: April 27, 2000 By: /s/ James R. Love
-----------------------------------
Name: James R. Love
Title: Executive Vice President and
Chief Financial Officer
(Principal Financial Accounting Officer)
4
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
INDEX TO FINANCIAL STATEMENTS
Page
----
Report of Independent Auditors.............................................. F-2
Balance Sheets as of December 31, 1999 and December 31, 1998................ F-3
Statements of Operations and Changes in Divisional Equity for the
years ended December 31, 1999 and December 31, 1998.................... F-4
Statements of Cash Flows for the years ended December 31, 1999
and December 31, 1998.................................................. F-5
Notes to Financial Statements .............................................. F-6
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Blue Cross and Blue Shield of Massachusetts, Inc.
We have audited the accompanying balance sheets of Provider Technology Group, a
division of Blue Cross and Blue Shield of Massachusetts ("PTG") as of December
31, 1999 and December 31, 1998, and the related statements of operations and
divisional equity and cash flows for the years then ended. These financial
statements are the responsibility of PTG's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 1, PTG was not a separate legal entity prior to December
31, 1999, but rather a component of a larger business. Accordingly, the
accompanying balance sheets, statements of operations and divisional deficit and
cash flows do not purport to reflect the financial position, results of
operations or cash flows of PTG if such business had operated as an unaffiliated
company.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PTG at December 31, 1999 and
December 31, 1998, and the results of its operations and divisional equity and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
March 10, 2000
F-2
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
1999 1998
------------ -----------
ASSETS
<S> <C> <C>
Current assets:
Accounts receivable, net................................................... $ 998,015 $ 1,116,641
------------- ------------
Total current assets................................................... 998,015 1,116,641
Property and equipment, net..................................................... 113,874 1,285,455
------------- ------------
Total assets $ 1,111,889 $ 2,402,096
DIVISIONAL EQUITY
Advances from BCBSMA............................................................ $ 14,085,018 $ 7,883,560
Retained divisional deficit .................................................... (12,973,129) (5,481,464)
------------- ------------
Total divisional equity $ 1,111,889 $ 2,402,096
============= ============
</TABLE>
See accompanying notes.
F-3
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
STATEMENTS OF OPERATIONS AND CHANGES IN DIVISIONAL EQUITY
<TABLE>
<CAPTION>
Year Ended
December 31
1999 1998
------------ -----------
<S> <C> <C>
Revenues ....................................................................... $ 4,331,566 $ 3,883,803
Operating expenses.............................................................. 8,414,001 9,083,594
General and administrative expenses............................................. 3,178,991 3,225,635
Other........................................................................... 230,239 304,999
------------- ------------
Net loss........................................................................ $ (7,491,665) $(8,730,425)
Changes in divisional equity:
Divisional (deficit) equity, beginning of year.................................. $ (5,481,464) $ 3,248,961
Net loss........................................................................ (7,491,665) (8,730,425)
------------- ------------
Divisional (deficit), end of year............................................... (12,973,129) (5,481,464)
Advances from BCBSMA, beginning of year......................................... 7,883,560 -
Advances made during the year................................................... 6,201,458 7,883,560
Advances from BCBSMA, end of year............................................... 14,085,018 7,883,560
------------- ------------
Total divisional equity......................................................... $ 1,111,889 $ 2,402,096
============= ============
</TABLE>
See accompanying notes.
F-4
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
December 31
1999 1998
------------ -----------
<S> <C> <C>
Cash flows used in operating activities:
Net loss................................................................... $ (7,491,665) $(8,730,425)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.................................... 1,299,689 1,285,452
Changes in assets:
Decrease (increase) in accounts receivable, net............. 118,626 (438,587)
------------- ------------
Total adjustments...................................... 1,418,315 846,865
------------- ------------
Net cash used in operating activities.................. (6,073,350) (7,883,560)
Cash flows used in investing activities:
Purchases of property, plant and equipment................................. (128,108)
------------- ------------
Net cash used in investing activities.................. (128,108)
------------- ------------
Cash flows provided by financing activities:
Advances from BCBSMA 6,201,458 7,883,560
------------- ------------
Net cash provided by financing activities 6,201,458 7,883,560
------------- ------------
Net increase in cash and cash equivalents....................................... - -
Cash at beginning of year....................................................... - -
------------- ------------
Cash at end of year............................................................. $ - $ -
============= ============
</TABLE>
See accompanying notes.
F-5
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. Summary of Significant Accounting Policies
Business--Provider Technology Group, Inc. ("PTG") provides an electronic network
to health providers and insurers operating within the Commonwealth of
Massachusetts. The network offers providers real- time submission of electronic
claims, on-line access to patient information (including coverage, eligibility,
pre-admission authorization, referrals and co-payments, access to claim status),
claim input error identification and correction assistance and instant answers
to insurance questions on-line. In addition, access to patient medical
information, including laboratory results, prescription history and referral
utilization is available to providers and insurers. Providers access the network
through a touch-tone phone, point of sale device or a computer.
PTG, and the electronic network it maintains, represents the primary
communication network between providers and Blue Cross and Blue Shield of
Massachusetts, ("BCBSMA"). The network became operational in 1992 and was
treated as a cost center within BCBSMA from that time. Separate accounting
records were not maintained for PTG with all assets, liabilities, revenues and
expenses attributable to PTG being part of the financial results of BCBSMA. As
such, PTG is economically dependent on BCBSMA.
Basis of Presentation--The accompanying financial statements present the
operations of PTG. Financial statement balances have been derived from the
financial records of BCBSMA, which contained businesses other than the
technology business. These financial statements are presented as if PTG had
existed as an entity separate from BCBSMA during the periods presented, and
includes financial information directly related to PTG's operations. Divisional
equity at January 1, 1998 represents the net assets of PTG at that point in time
and does not reflect cumulative income statement activity from PTG's inception.
As a result, these statements do not purport to reflect the financial position,
or results of operations or cash flows, that would have resulted if PTG had
operated as a separate entity. BCBSMA management believes the financial
statements of PTG to be a fair representation of PTG's financial position,
results of operations and cash flows within the framework of BCBSMA's business.
The assets of PTG were determined by specific identification of the assets used
in, or relating to, the PTG business.
Revenue Recognition--Revenues include initial service charges for installation
of technology, monthly service charges for the use of technology provided by PTG
and a per-transaction charge to providers based on the number of claims
submitted for payment. Revenues are earned immediately as services are provided.
Expense Recognition--The statements of operations of PTG include all costs
directly attributable to PTG and also include allocated expenses from BCBSMA,
including employee benefits, occupancy, information technology services and
technology usage that relate to PTG. These expenses have been allocated based on
specific identification or headcount equivalents. Management believes that these
allocations are reasonable and represent their best estimate. These allocations
are not necessarily indicative of the costs and expenses that would have
resulted if PTG had been operated as a separate entity. Certain other costs
incurred by BCBSMA have not been allocated to PTG because management believes
that these costs are not significant to the PTG division.
F-6
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
NOTES TO FINANCIAL STATEMENTS--(Continued)
1. Summary of Significant Accounting Policies (Continued)
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect amounts reported in the financial statements and the
accompanying disclosures. The more significant estimates that impact these
statements include such items as: allocations of costs and expenses from BCBSMA
to PTG and determination of the accrued employee benefits balance. In the
opinion of management, the allocation of costs and expenses are reasonable;
however, they are not necessarily indicative of costs and expenses that would
have been incurred had PTG been operated as an unaffiliated company. Although
management believes these estimates to be reasonable, actual results could
differ from those estimates.
Cash--PTG does not maintain a cash balance. BCBSMA funds all cash.
Accounts Receivable--Accounts receivable represent amounts due from providers.
PTG believes the allowance for doubtful accounts of $56,000 and $62,000 at
December 31, 1999 and December 31, 1998, respectively, provide adequate reserves
for potentially uncollectible accounts.
Property and Equipment--Capitalized software costs are included on the balance
sheets in property and equipment. Computers and other office equipment utilized
by PTG were leased by BCBSMA through August, 1999. A monthly charge was
allocated to PTG, based on headcount, to reflect the cost of utilizing these
assets. In September, 1999, BCBSMA purchased computer equipment totaling
$128,108 to support the PTG business. Computer equipment is being depreciated
over 3 years using the straight-line method. Depreciation expense during 1999
totaled $14,234.
Income Taxes--PTG's operations are included in the federal income tax return of
BCBSMA. No requirement exists for payment by BCBSMA to PTG for use of net losses
generated by PTG. No tax benefit has been recorded, as it would be subject to a
100% valuation allowance.
2. Property and Equipment
<TABLE>
<CAPTION>
December 31
1999 1998
------------ -----------
<S> <C> <C>
Computer software and other equipment........................................... $ 8,964,928 $ 8,836,820
Accumulated depreciation and amortization....................................... (8,851,054) 7,551,365)
------------- ------------
$ 113,874 $ 1,285,455
============= ============
</TABLE>
3. Employee Benefits Plan
BCBSMA has a savings plan for eligible employees. Under the employee savings
plan, BCBSMA contributes an amount equal to 50% of employee contributions up to
a maximum of 3% of each employee's salary, or $4,800 each year. Contributions
are directed by the employees into investment funds maintained in accordance
with the employee savings plan. BCBSMA contributions charged to operations
related to PTG employees amounted to $42,900 and $40,300 in 1999 and 1998,
respectively.
F-7
<PAGE>
Provider Technology Group
A Division of Blue Cross and Blue Shield of Massachusetts
NOTES TO FINANCIAL STATEMENTS--(Continued)
4. Related Party Transactions
PTG is treated as a cost center within BCBSMA, and therefore, does not maintain
its own profit and loss responsibility. A large portion of PTG's transactions
are internal to BCBSMA, and no intercompany revenue is recognized on these
transactions. However, the statements of operations of PTG include expenses
allocated from BCBSMA based on PTG headcount equivalents. Allocated expenses, by
functional category, for the fiscal years ended December 31 include:
1999 1998
---------- ----------
Employee benefits......................... $ 415,511 $ 505,852
Occupancy................................. 421,654 411,945
Finance and other administration.......... 267,000 255,000
Information technology services........... 2,248,086 2,286,000
Information technology usage.............. 130,905 157,443
---------- ----------
Total allocated charges................... $3,483,156 $3,616,240
========== ==========
5. Subsequent Event
On February 15, 2000, BCBSMA agreed to sell PTG to an unrelated third party for
$70 million in cash and stock.
F-8
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
In the table below, we attempt to illustrate the financial results that
might have occurred if CareInsite's acquisition of PTG had been completed
previously. Presented is the Unaudited Pro Forma Combined Condensed Consolidated
Statements of Operations for the fiscal year ended June 30, 1999 and the six
months ended December 31, 1999 as if the Acquisition had been consummated at the
beginning of the earliest period presented. Also presented is the Unaudited Pro
Forma Combined Condensed Consolidated Balance Sheet as of December 31, 1999 as
if the Acquisition had been completed on December 31, 1999. These unaudited pro
forma combined condensed consolidated financial statements should be read in
conjunction with the historical consolidated financial statements of CareInsite
and related notes and "Management's Discussion and Analysis of Results of
Operations and Financial Condition" contained therein, with respect to
CareInsite, in the Registrant's Annual Report on Form 10-K, as amended, for the
year ended June 30, 1999 and the Quarterly Report on Form 10-Q for the three and
six months ended December 31, 1999 and, with respect to PTG, in the accompanying
audited financial statements, for a more detailed explanation.
In January 2000, the Company agreed to acquire the 80% equity interest
in The Health Information Network Connection ("THINC") owned by Empire Blue
Cross and Blue Shield, Group Health Incorporate, HIP Health Plans and Greater
New York Hospital Association in a stock transaction valued at approximately
$45,000,000. The acquisition will be accounted for using the purchase method of
accounting. Simultaneously, the Company acquired Cerner Corporation's 2%
non-voting ownership interest in THINC for a note payable of $2,735,000. The
note bears interest at 5.8% per annum and is repayable on demand after September
2002. In the financial statements below, we also include the financial results
that might have occurred if CareInsite's acquisition of the 80% equity interest
in THINC had been completed previously, in each case as if the acquisition had
been consummated at the beginning of the earliest period presented. For more
information regarding the Company's acquisition of THINC and the related
Proforma Adjustments refer to the previously filed Form 8-K dated January 18,
2000, as amended by the Form 8-K/A dated March 23, 2000.
It is important to remember that this information is hypothetical, and
does not necessarily reflect the financial performance that would have actually
resulted if the Acquisition or CareInsite's acquisition of the 80% equity
interest in THINC had been completed on that date. It is also important to
remember that this information does not necessarily reflect future financial
performance.
PF-1
<PAGE>
Pro Forma Combined Condensed Consolidated Statement of Operations
For the Year Ended June 30, 1999
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THINC CareInsite/THINC PTG
CareInsite Pro Forma Pro Forma Pro Forma
Historical Historical(a) Adjustments(a) Combined(a) Historical Adjustments
---------- ------------- -------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue $ 371 $ - $ - $ 371 $ 4,136 $ -
Service revenue to affiliates 993 - (993) - - -
---------- ------------- -------------- -------------- ----------- -----------
Total revenues 1,364 - (993) 371 4,136 -
Costs and Expenses:
Cost of revenues 69 - 69 10,635 -
Cost of services to affiliates 993 - (993) - - -
Research and development 11,253 2,803 14,056 - -
Sales and marketing 1,910 225 2,135 - -
General and administrative 4,205 1,353 (596) 4,962 417 -
Litigation costs 4,300 - 4,300 - -
Depreciation and amortization 1,695 1,188 19,798 22,681 1,286 12,890(1)
---------- ------------- -------------- -------------- ----------- -----------
Total costs and expenses 24,425 5,569 18,209 48,203 12,338 12,890
---------- ------------- -------------- -------------- ----------- -----------
Loss from operations (23,061) (5,569) (19,202) (47,832) (8,202) (12,890)
Other income (expense), net 263 (345) (203) (285) - (1,587)(2)
---------- ------------- -------------- -------------- ----------- -----------
Net loss (22,798) $ (5,914) $ (19,405) $ (48,117) $ (8,202) $ (14,477)
========== ============= ============== ============== =========== ===========
Net loss per share, basic and
diluted $ (0.40) $ (0.80)
========== ==============
Weighted average shares
outstanding, basic and
diluted $ 56,371 $ 3,673 $ 60,044 $ 652(3)
========== ============= ============== ===========
</TABLE>
Pro Forma
Combined
-----------
Net revenue $ 4,507
Service revenue to affiliates -
-------------
Total revenues 4,507
Costs and Expenses:
Cost of revenues 10,704
Cost of services to affiliates -
Research and development 14,056
Sales and marketing 2,135
General and administrative 5,379
Litigation costs 4,300
Depreciation and amortization 36,857
--------------
Total costs and expenses 73,431
--------------
-
Loss from operations (68,924)
Other income (expense), net (1,872)
--------------
Net loss $ (70,796)
==============
Net loss per share, basic and
diluted $ (1.17)
==============
Weighted average shares
outstanding, basic and
diluted $ 60,696
==============
See accompanying Notes to Financial Statements
PF-2
<PAGE>
Pro Forma Combined Condensed Consolidated Statement of Operations
Six months ending December 31, 1999
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THINC CareInsite/THINC PTG
CareInsite Pro Forma Pro Forma Pro Forma
Historical Historical(a) Adjustments(a) Combined(a) Historical Adjustments
---------- ------------- -------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue $ 1,585 $ - $ - $ 1,585 $ 2,188 $ -
Service revenue to affiliates 1,573 - (1,573) - - -
---------- ------------- -------------- -------------- ----------- -----------
Total revenues 3,158 - (1,573) 1,585 2,188 -
Costs and Expenses:
Cost of revenues 526 - - 526 5,143 -
Cost of services to affiliates 1,573 - (1,573) - - -
Research and development 7,901 2,415 - 10,316 - -
Sales and marketing 6,511 619 - 7,130 - -
General and administrative 6,354 615 (895) 6,074 211 -
Litigation costs 1,100 - - 1,100 - -
Depreciation and amortization 2,685 593 9,827 13,105 657 6,445(1)
---------- ------------- -------------- -------------- ----------- -----------
Total costs and expenses 26,650 4,242 7,359 38,251 6,011 6,445
---------- ------------- -------------- -------------- ----------- -----------
Loss from operations (23,492) (4,242) (8,932) (36,666) (3,823) (6,445)
Other income (expense), net 3,267 (237) (101) 2,929 - (793)(2)
Gain on sale of investment 25,511 - - 25,511 - -
---------- ------------- -------------- -------------- ----------- -----------
Net loss (loss) 5,286 (4,479) (9,033) (8,226) (3,823) (7,238)
Accretion on Series A Preferred
Stock (433) - - (433) - -
---------- ------------- -------------- -------------- ----------- -----------
Net income (loss) per share,
available to common
stockholders $ 4,853 $ (4,479) $ (9,033) $ (8,659) $ (3,823) $ (7,238)
========== ============= ============== ============== =========== ===========
Net income (loss) per share
available to common
stockholders:
Basic $ 0.07 $ (0.12)
========== ==============
Diluted $ 0.06 $ (0.12)
========== ==============
Weighted average shares
outstanding:
Basic 70,410 3,673 74,083 652(3)
========== ============== ============== ===========
Diluted 78,776 74,083
========== ==============
</TABLE>
Pro Forma
Combined
-----------
Net revenue $ 3,773
Service revenue to affiliates -
------------
Total revenues 3,773
Costs and Expenses:
Cost of revenues 5,669
Cost of services to affiliates -
Research and development 10,316
Sales and marketing 7,130
General and administrative 6,285
Litigation costs 1,100
Depreciation and amortization 20,207
-----------
Total costs and expenses 50,707
-----------
Loss from operations (46,934)
Other income (expense), net 2,136
Gain on sale of investment 25,511
-----------
Net income (loss) (19,287)
Accretion on Series A Preferred
Stock (433)
-----------
Net income (loss)
available to common
stockholders $ (19,720)
===========
Net income (loss) per share
available to common
stockholders:
Basic $ (0.26)
===========
Diluted $ (0.26)
===========
Weighted average shares
outstanding:
Basic 74,735
===========
Diluted 74,735
===========
See accompanying Notes to Financial Statements
PF-3
<PAGE>
Pro Forma Combined Condensed Balance Sheet
as of December 31, 1999
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
THINC CareInsite/THINC PTG
CareInsite Pro Forma Pro Forma PTG Pro Forma
Historical Historical(a) Adjustments(a) Combined(a) Historical Adjustments
---------- ------------- -------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <
ASSETS
Current Assets:
Cash and Cash Equivalents $ 21,861 $ 592 $ - $ 22,453 $ - $ -
Marketable Securities 44,596 - - 44,596 - (26,500)(4)
Other Current Assets 18,067 98 (4,626) 13,859 998 (926)(5)
320
---------- ------------- -------------- ---------------- ------------ -----------
Total Current Assets 84,524 690 (4,306) 80,908 998 (27,426)
Property and Equipment, Net 9,001 1,842 - 10,843 114 (49)(5)
Capitalized Software Development
Cost, Net 30,807 - - 30,807 - -
Other Assets:
Intangible Assets, Net 20,102 - 59,827 78,828 - 64,448(6)
(1,101)
Non-current marketable
securities 49,594 - - 49,594 - -
Investments and Other
Assets 3,782 316,250 (315,718) 4,314 - -
---------- ------------- -------------- ---------------- ------------ -----------
Total Other Assets 73,478 316,250 (256,992) 132,736 - 64,448
---------- ------------- -------------- ---------------- ------------ -----------
Total Assets $ 197,810 $ 318,782 $ (261,298) $ 255,294 $ 1,112 $ 36,973
========== ============= ============== ================ ============ ===========
LIABILITIES, STOCKHOLDERS' AND
DIVISIONAL EQUITY AND MEMBERS'
CAPITAL:
Current Liabilities $ 8,167 $ 11,351 $ (4,626) $ 18,427 $ - $ 2,335(7)
800
2,735
Long-Term Liabilities - 1,613 - 1,613 -
---------- ------------- -------------- ---------------- ------------ -----------
Total Liabilities 8,167 12,964 (1,091) 20,040 - 2,335
---------- ------------- -------------- ---------------- ------------ -----------
Convertible Redeemable
Preferred Stock 5,166 - - 5,166 - -
---------- ------------- -------------- ---------------- ------------ -----------
Redeemable Common Stock - - - - - 22,500(8)
---------- ------------- -------------- ---------------- ------------ -----------
Stockholders' and Divisional
Equity and Members' Capital 184,477 305,818 320 230,088 1,112 (1,112)(9)
(268,380) 13,250(10)
7,853 -
---------- ------------- -------------- ---------------- ------------ -----------
Total Stockholders'
and Divisional Equity
and Members' Capital 184,477 305,818 (260,207) 230,088 1,112 12,138
---------- ------------- -------------- ---------------- ------------ -----------
Total Liabilities and
Stockholders' Equity $ 197,810 $ 318,782 $ (261,298) $ 255,294 $ 1,112 $ 36,973
========== ============= ============== ================ ============ ===========
</TABLE>
Pro Forma
Combined
-----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 22,453
Marketable Securities 18,096
Other Current Assets 13,931
-----------
Total Current Assets 54,480
Property and Equipment, Net 10,908
Capitalized Software Development
Cost, Net 30,807
Other Assets:
Intangible Assets, Net 143,276
Non-current marketable
securities 49,594
Investments and Other
Assets 4,314
-----------
Total Other Assets 197,184
-----------
Total Assets $ 293,379
===========
LIABILITIES, STOCKHOLDERS' AND
DIVISIONAL EQUITY AND MEMBERS'
CAPITAL:
Current Liabilities $ 20,762
Long-Term Liabilities 1,613
-----------
Total Liabilities 22,375
-----------
Convertible Redeemable
Preferred Stock 5,166
-----------
Redeemable Common Stock 22,500
-----------
Stockholders' and Divisional
Equity and Members' Capital 243,338
-----------
Total Stockholders'
and Divisional Equity
and Members' Capital 243,338
-----------
Total Liabilities and
Stockholders' Equity $ 293,379
===========
See accompanying Notes to Financial Statements
PF-4
<PAGE>
Notes to Pro Forma Combined Condensed Consolidated
Financial Statements
(unaudited)
(a) For information regarding CareInsite's acquisition of THINC and the
related Pro Forma Adjustments refer to the previously filed Form 8-K
dated January 18, 2000, as amended by the Form 8-K/A dated March 23,
2000.
The Unaudited Pro Forma Combined Condensed Consolidated Statements of
Operations have been prepared to reflect the Acquisition as if the Acquisition
occurred at the beginning of the period presented. The Acquisition has been
accounted for under the purchase method of accounting. The purchase price less
the fair value of the net assets acquired representing goodwill is being
amortized over five years.
The following is a summary of the adjustments reflected in the
Unaudited Pro Forma Combined Condensed Consolidated Statements of Operations.
1. Represents the amortization of the goodwill on the PTG
acquisition.
2. Represents the decrease in interest income to reflect the
reduction in Marketable Securities and Cash and Cash
Equivalents due to the payment of the cash portion of the
purchase price and the expenses associated with the
Acquisition.
3. Represents the increase in the number of outstanding shares of
CareInsite common stock issued pursuant to the stock portion
of the purchase price.
The Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet
was prepared to reflect the Acquisition as of December 31, 1999.
The following is a summary of the adjustments reflected in the
Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet:
4. Represents the reduction in marketable securities to reflect
payment of the cash portion of the purchase price.
5. Represents the elimination of historical assets not acquired,
net of additional assets acquired.
6. Represents the preliminary estimate of the goodwill as
follows:
Purchase Price (including acquisition related expenses) $ 64,585
Net assets acquired 137
--------
Goodwill $ 64,448
========
The company believes that the final allocation will not vary materially
from the preliminary estimate.
Subsequent to the acquisition, the Company will review the carrying
values assigned to goodwill to determine whether later events or circumstances
have occurred that indicate that the balance of goodwill may be impaired. The
Company's principal consideration in determining the impairment of goodwill
include the strategic benefit to the Company of the particular business as
measured by undiscounted current and expected future operating income and
expected undiscounted future cash flows.
PF-5
<PAGE>
7. Represents the amount of estimated costs for legal and
accounting services and other expenses associated with the
Acquisition.
8. Represents the value of 325,984 common shares which under
certain circumstances PTG can require the Company to purchase
from PTG at $69.022 per share.
9. Represents the elimination of PTG's historical divisional
equity.
10. Represents the equity issued to acquire PTG.
PF-6
