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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
Date of Report (Date of Earliest Event Reported): June 30, 2000
HEALTHAXIS INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-13591 23-2214195
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2500 DeKalb Pike, East Norriton, Pennsylvania 19401
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(Address of principal executive offices/Zip Code)
Former name, former address, and former fiscal year, if changed since last
report: N/A
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Item 5. Other Events
The following information is qualified in its entirety by, and should
be read in conjunction with, the more detailed information and financial data,
including the Consolidated Financial Statements of HealthAxis Inc. ("HAI") and
its subsidiaries, and the notes thereto, appearing in HAI's reports filed with
the Securities and Exchange Commission ("SEC"). Except for the historical
information contained herein, this Current Report on Form 8-K, contains certain
forward-looking statements regarding HAI's business and prospects that are based
upon numerous assumptions about future conditions which may ultimately prove to
be inaccurate and actual events and results may materially differ from
anticipated results described in such statements. Such forward-looking
statements involve risks and uncertainties, such as historical and anticipated
losses; uncertainty of future results, new business challenges, competition,
funding; need for additional capital, reliability of information systems,
protection of proprietary technology, trademark infringement, uncertain
acceptance of the Internet as a medium for health insurance sales, failure to
meet performance standards, reliance on a small number of large clients, foreign
operations, changes in insurance industry regulations, regulation of the
Internet and legal uncertainties, potential conflicts of interest, and absence
of dividends. Any one or a combination of these factors could have a material
adverse effect on HAI's business, financial condition and results of operations.
These forward-looking statements represent HAI's judgment as of the date of this
report. HAI disclaims, however, any intent or obligation to update these
forward-looking statements.
On June 30, 2000, HealthAxis.com, Inc. ("HealthAxis"), a subsidiary of
HealthAxis Inc., entered into an Asset Purchase Agreement to sell certain assets
to Digital Insurance, Inc. ("Digital"). The terms of the Asset Purchase
Agreement require HealthAxis to transfer or assign certain assets used in
connection with its retail website, including:
o The current and next generation of the retail website user interface,
the presentation layer of the website that includes the graphical
templates that create the look and feel of the website;
o Certain physical assets, including: call center equipment and
software, computer hardware and software, and furniture or equipment
used to conduct HealthAxis' retail website business;
o Agreements with carrier partners, the insurance companies whose
products are sold on the website;
o Agreements with affinity partners, the retail partners with similar
target audiences as the website;
o Portal marketing agreements;
o Additional agreements including: agreements related to the affiliate
partner program, service agreements, and independent contractor
agreements;
o Goodwill associated with the transferred assets and assigned
agreements;
o All of HealthAxis' rights under manufacturers' and vendors'
warranties relating to the transferred assets; and
o All existing in-force insurance policies.
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The terms of the Asset Purchase Agreement require Digital to pay
HealthAxis the following consideration:
o $1,000,000 in cash;
o 11%, on a fully-diluted basis, of the outstanding shares of Digital;
and
o a portion of Digital's net commission revenues received by Digital
through the acquired website user interface or an affinity partner.
Under the Asset Purchase Agreement, HealthAxis has the right, subject
to certain restrictions, to maintain its 11% ownership interest in Digital by
purchasing additional securities in future offerings by Digital, if any. The
Asset Purchase Agreement includes various warranties, representations, covenants
and conditions, including but not limited to certain non-solicitation
agreements.
In connection with this transaction, HealthAxis and Digital entered
into a Software Licensing and Consulting Agreement that provides HealthAxis
with:
o A perpetual nonexclusive license to use and sublicense, subject to
certain restrictions, the user interface sold to Digital Insurance;
o Licensing fees over the next 30 months of $3.0 million for software
owned by HealthAxis that will be used by Digital in conjunction with
the user interface it purchased; and
o Service fees over the next 12 months of a minimum of $3.0 million for
services relating to customizing, maintaining and upgrading the user
interface and other software.
Effective as of June 30, 2000, Digital has placed the $1.0 million and
the stock certificate representing HealthAxis' 11% ownership into escrow pending
the satisfaction by HealthAxis of certain conditions. These conditions include
delivery, to Digital's satisfaction, of the new version 3.0 of its retail
website user interface and consents from certain third parties to the assignment
of their agreements with HealthAxis to Digital. Under the Asset Purchase
Agreement, either party has the right to terminate the transaction if these
conditions and other conditions in the Asset Purchase Agreement are not
satisfied by September 15, 2000. The Company currently anticipates that the
transaction will be completed by August 15, 2000. No assurances can be given as
to whether or not the transactions will be completed or, if completed, the
timing thereof, the receipt of required contractual approvals, or the completion
of the necessary conditions.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of business acquired.
Not applicable.
(b) Proforma Financial Information.
Not applicable.
(c) Exhibits.
The following exhibits are filed herewith:
S-K Item
Number Description
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10.1 Asset Purchase Agreement dated June 30, 2000, between
HealthAxis.com, Inc. and Digital Insurance, Inc.
10.2 Software License and Consulting Agreement dated June 30,
2000, between HealthAxis.com, Inc. and Digital Insurance,
Inc.
99.1 Press Release dated July 6, 2000.
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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.
HEALTHAXIS INC.
Date: 7/18/00 By: /s/ Michael Ashker
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Michael Ashker
President and Chief Executive Officer
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EXHIBIT INDEX
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S-K Item
Number Description
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10.1 Asset Purchase Agreement dated June 30, 2000, between
HealthAxis.com, Inc. and Digital Insurance, Inc.
10.2 Software License and Consulting Agreement dated June 30,
2000, between HealthAxis.com, Inc. and Digital Insurance,
Inc.
99.1 Press Release dated July 6, 2000.
