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HealthAxis Inc.
FOR IMMEDIATE RELEASE
Investor and Media Contact:
Steven M. Kaplan
HealthAxis Inc.
610-275-3800
[email protected]
HealthAxis Inc. Signs Amended Definitive Agreement to
Merge with HealthAxis.com
Amends Terms Of $27.5 Million Convertible Debentures
EAST NORRITON, PA, Sept 29, 2000--HealthAxis Inc. (NASDAQ: HAXS) announced today
that it has executed an amended definitive agreement to merge with
HealthAxis.com, Inc., a subsidiary of HealthAxis Inc. ("HAI"), and a proven
leader in Web-enabling healthcare payers. Both companies' Boards have formally
approved the terms of the merger.
Under the terms of the transaction, HAI will issue new shares to acquire all of
the outstanding HealthAxis.com, Inc. shares that HAI does not already own.
HealthAxis.com, Inc. shareholders will receive 1.334 shares of HAI common stock
for each share of HealthAxis.com, Inc. common stock that they own. Existing HAI
shareholders will continue to own the same number of shares of HAI, after the
transaction closes, as they did immediately prior to the closing of the merger.
Additionally, the Company has successfully renegotiated the terms of the $27.5
million, 2% Convertible Debentures previously issued. The revised terms of the
Debentures include:
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HealthAxis Inc. Signs Amended Definitive Agreement to
Merge with HealthAxis.com
September 29, 2000
Page 2 of 4
> MATURITY DATE. The Maturity Date of the Debenture on which the principal
becomes due and payable is amended and extended from September 14, 2002 to
September 14, 2005.
> CONVERSION PRICE OF DEBENTURE. The Conversion Price of the Debenture is
amended from $20.34 to $9.00.
> EXERCISE PRICE OF WARRANTS. The Exercise Price of the 202,802 HAI Warrants is
amended from $20.34 to $3.01.
The amended terms of the Debentures take effect upon the consummation of the
merger with HealthAxis.com, Inc.
Additionally $5 million, at face value, of the original $27.5 million Debenture
have been purchased from a previous holder, in equal amounts, by Alvin Clemens,
Chairman of the Board of both HealthAxis Inc. and HealthAxis.com, Inc., UICI,
and Brown Simpson Asset Management, LLC. The purchase price for the private
transaction was $3.5 million.
Michael Ashker, chief executive officer of HAI and HealthAxis.com, Inc. said
"working diligently over the past several weeks, the two companies have resolved
all of the outstanding issues impeding the execution of the planned merger. This
transaction, once completed, will eliminate the awkward organizational structure
under which both sets of shareholders have labored by providing for a single
corporate entity with a single Board of Directors. The unified entity will be
much better positioned to explain its story to customers, prospects, employees
and the Wall Street community"
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HealthAxis Inc. Signs Amended Definitive Agreement to
Merge with HealthAxis.com
September 29, 2000
Page 3 of 4
The consummation of the merger is subject to various conditions including the
approval of both HealthAxis.com, Inc. and HAI shareholders as well as regulatory
approval. The Company expects to file an amended Form S-4 Registration Statement
for this transaction during the first week of October. Pending effectiveness of
the S-4 and satisfaction of the closing conditions, the closing is anticipated
to occur during the latter part of the fourth quarter of 2000 or early in the
first quarter of 2001.
About HealthAxis
HealthAxis.com, Inc., a subsidiary of HealthAxis Inc., is a leading provider of
Internet solutions for healthcare insurance distribution and administration for
the payer community. The Company's proprietary workflow and business application
software, built around an application service provider model, enables healthcare
payers--carriers, third party administrators, and large, self-funded groups--to
more efficiently capture, process, and share health plan data over the Internet.
HealthAxis.com, Inc. is headquartered in suburban Philadelphia, with significant
operations in Dallas, as well as offices in eight additional locations both
domestic and international. The Company employs over 350 IT professionals.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Certain statements made which are not historical facts may be considered
forward-looking statements, including, without limitation, statements as to
trends, management's beliefs, expectations and opinions, which are based upon a
number of assumptions concerning future conditions that ultimately may prove to
be inaccurate. Such forward-looking statements are subject to risks and
uncertainties and may be affected by various factors which may cause actual
results to differ materially from those in the forward-looking statements. For
further information which could cause actual results to differ from the
Company's expectations as well as other factors which could affect the Company's
financial statements, please refer to the Company's reports filed with the
Securities and Exchange Commission.
