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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 4, 2000
REGISTRATION NO. 333-48890
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
PMR CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 23-2491707
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
501 WASHINGTON STREET, 5TH FLOOR
SAN DIEGO, CALIFORNIA 92103
(619) 610-4001
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
MARK P. CLEIN
CHIEF EXECUTIVE OFFICER
PMR CORPORATION
501 WASHINGTON STREET, 5TH FLOOR
SAN DIEGO, CALIFORNIA 92103
(619) 610-4001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
WILLIAM E. JOOR III
VINSON & ELKINS L.L.P.
1001 FANNIN, SUITE 2300
HOUSTON, TEXAS 77002-6760
(713) 758-2222
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE 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 SAID SECTION 8(A), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. The
Selling Stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not a
solicitation of an offer to buy these securities in any state in which the
offer are sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 4, 2000
888,978 SHARES
PMR CORPORATION
[LOGO]
COMMON STOCK
This prospectus relates to the offer and sale from time to time of up to
an aggregate of 888,978 shares of our common stock for the account of our
stockholders named in this prospectus.
Our common stock is listed for trading on The NASDAQ National Market
under the trading symbol "PMRP." On October 23, 2000, the last reported sale
price of our common stock on NASDAQ was $2 1/16 per share. The shares covered by
this prospectus may be sold at market prices prevailing at the time of sale or
at negotiated prices.
While we are not the owner of any of the shares covered by this
prospectus, we are entitled to receive, as payment of amounts outstanding under
promissory notes payable by the selling stockholders to us, proceeds received in
exchange for 434,355 of the shares of common stock offered hereby, up to
$643,588. The loans to the selling stockholders were for payment of the exercise
price and income tax obligations arising from the selling stockholders' exercise
of stock options to purchase shares of common stock. See "Selling Stockholders."
The address of our principal executive offices is 501 Washington Street,
5th Floor, San Diego, California 92103, and our telephone number is (619)
610-4001.
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INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
SEE "RISK FACTORS," BEGINNING ON PAGE 2.
-----------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 2000.
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK.
----------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Business......................................................................... 1
Risk Factors .................................................................... 2
Use of Proceeds ................................................................. 9
Selling Stockholders ............................................................ 9
Plan of Distribution ............................................................ 10
Legal Matters ................................................................... 10
Experts ......................................................................... 10
Where You Can Get More Information .............................................. 11
Incorporation of Certain Documents by Reference ................................. 11
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities ..................................................................... 12
</TABLE>
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ADDITIONAL INFORMATION, INCLUDING OUR FINANCIAL STATEMENTS FOR THE
FISCAL YEAR ENDED APRIL 30, 2000 AND THE NOTES THERETO, IS INCORPORATED IN THIS
PROSPECTUS BY REFERENCE TO OUR REPORTS FILED WITH THE SEC. SEE "WHERE YOU CAN
FIND MORE INFORMATION." YOU ARE URGED TO READ THIS PROSPECTUS, INCLUDING THE
"RISK FACTORS," AND OUR SEC REPORTS IN THEIR ENTIRETY. ALL REFERENCES TO "PMR,"
"THE COMPANY," "WE," "US," OR "OUR," MEAN PMR CORPORATION AND ITS SUBSIDIARIES.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Some statements in this prospectus or in the documents we refer you to,
including statements regarding the expectations, intentions, plans and beliefs
of our management, are forward-looking statements, as defined in the Securities
Act of 1933 and the Securities Exchange Act of 1934. The outcome of the
forward-looking statements depends on certain events, risks and uncertainties
that may be outside our control. These forward-looking statements include
statements of management's plans and objectives for future operations and
statements of future economic performance; our ability to meet our future
capital needs; the outcome of regulatory matters; and the assumptions described
in this prospectus or in the documents we refer you to underlying such
forward-looking statements. Actual results and developments could differ
materially from those expressed in or implied by these forward-looking
statements due to a number of factors, including those set forth under the
caption "Risk Factors" in this prospectus and those in our Annual Report on Form
10-K, which is incorporated by reference into this prospectus.
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BUSINESS
Over the past twelve years PMR Corporation has been a leader in the
development and management of specialized mental health care programs and
disease management services designed to treat individuals diagnosed with a
serious mental illness, primarily schizophrenia and bipolar disorder (i.e.,
manic-depressive illness). We currently manage, administer or provide consulting
services for a range of outpatient and community-based psychiatric services for
patients so afflicted, consisting of five outpatient programs (the outpatient
programs) and two case management programs (the case management programs). We
refer to the outpatient programs and the case management programs, collectively,
as the health services programs.
During the fiscal year ended April 30, 2000, we significantly reduced
our presence in outpatient programs. This was the result of a management
decision predicated on declining financial performance. These programs are
heavily dependent on reimbursement by Medicare and Medicaid. The declining
financial performance of these programs was related primarily to governmental
regulatory changes and consequent reductions in reimbursement levels.
During the year, we began to implement a changed business strategy. We
focused on reducing the number of outpatient programs managed by us, hence
minimizing our exposure to the changing reimbursement environment and maximizing
cash flow in the health services programs. In addition, we conceived a novel
technological solution for the creation of strategic information as to "why"
physicians choose certain drug therapies. We thereafter initiated the
development of a health information business through our wholly-owned
subsidiary, InfoScriber(TM) Corporation. The business objective of InfoScriber
is to provide critical disease-specific information to pharmaceutical companies,
health services providers, managed care organizations and other health care
organizations. Initially, InfoScriber will focus on providing information
specific to diseases of the central nervous system, building on our experience
in the management of health service programs. Our novel technology is based on
our ability to imbed a series of queries within a web-based electronic
prescribing system and show what is happening at the point of care and the
underlying reasons for "why" it is occurring. When combined with our panels of
physician users, we create what we believe is the first real-time, longitudinal
and secure database of health information captured at the point of prescribing
in a web-based environment. On August 14, 2000, we introduced a limited release
of the commercial version of our InfoScriber medication management and
information system to selected physician sites in our central nervous system
panel for additional testing. We are actively recruiting physician users and
introducing the informatics products to potential pharmaceutical purchasers.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors, in addition to other
information contained in this prospectus and any other document incorporated by
reference into this prospectus, before purchasing our common stock.
INFOSCRIBER SYSTEM
WE ARE PURSUING A NEW BUSINESS STRATEGY. THAT STRATEGY MAY NOT SUCCEED.
During the fiscal year ended April 30, 2000, we began to implement a
changed business strategy. We focused on maximizing cash flow in our health
services programs by reducing the number of outpatient programs managed by us.
This also minimizes our exposure to the changing regulatory environment. In
September 1999, we organized InfoScriber(TM) Corporation, a wholly-owned
subsidiary. InfoScriber's business plan is to become a leading provider of
strategic health information for pharmaceutical companies, medical device
companies, managed care organizations and health care providers. We do not
intend to continue to devote resources to expand our health services programs
(although we may consider any such future opportunities). The principal focus of
our business strategy is to develop our health information business. As a
result, we anticipate that our cash outflows will increase as we implement this
business strategy and after commercial introduction of our InfoScriber system.
We cannot assure you that we can develop, market and expand our web-based health
information system to the extent necessary to compete successfully in the health
information industry.
WE HAVE NOT YET GENERATED ANY REVENUES FROM THE IMPLEMENTATION OF THE
INFOSCRIBER SYSTEM.
In August 2000, we introduced a limited release of the commercial
version of our InfoScriber system to selected physician sites in our central
nervous system panel for additional testing. We have not yet generated any
revenues from the operation of the system. Future realization of revenues from
operation of the system will be dependent upon its acceptance in the market.
Even if it achieves market acceptance, the system may not produce net income for
us because the expenses that we will incur as a result of preparation of the
system, its commercial introduction and marketing of the system may exceed our
revenues.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING ON SATISFACTORY TERMS AND
CONDITIONS IF IT IS NEEDED TO IMPLEMENT OUR BUSINESS STRATEGY.
To implement our business strategy, we may need additional capital for:
- related acquisitions;
- research and development expenses; and
- operating expenses.
If we are required to finance these activities, we cannot assure you that we
will be able to obtain the financing needed to fund the implementation of our
business strategy on satisfactory terms and conditions, if at all. If we incur
additional debt, we may have to dedicate a substantial portion of our cash flow
from operations to the payment of principal and interest, which may cause us to
be more vulnerable to competitive pressures and economic downturns. If we fail
to obtain necessary financing in a timely manner and on acceptable terms, our
results of operations may be materially adversely affected.
OUR EXPECTATIONS OF GROWTH THROUGH THE INFOSCRIBER SYSTEM WILL BE IMPAIRED:
IF THE PRODUCTS AND SERVICES OFFERED TO INFORMATION SOURCES DO NOT
ACHIEVE ACCEPTANCE.
Our business strategy depends on selling our InfoScriber system to
information sources, such as physicians and other health care providers, and
generating usage from a large number of such prescribers. To accept our products
and services, physicians and providers will need to adopt different behavior
patterns and new methods for
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conducting business and exchanging information. We cannot assure you that
physicians and providers will integrate our products and services into their
office work flow.
IF WE ARE UNABLE TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH
INDUSTRY LEADERS IN OUR INFORMATION MARKET.
A fundamental aspect of the business strategy underlying the InfoScriber
system is marketing the information that we develop to the pharmaceutical
industry. To develop this market, we must establish and maintain strategic
relationships with leading companies in that industry. We cannot assure you that
participants in that industry will accept our databases of information as a
replacement for more traditional methods of obtaining pharmaceutical health care
information.
IF COMPETITIVE PRODUCTS AND SERVICES ACHIEVE GREATER MARKET ACCEPTANCE
THAN OURS.
A number of market entrants have introduced or developed products and
services that are competitive with one or more components of our InfoScriber
system. We expect that additional companies will enter the market. If those
market entrants should gain greater market acceptance than the InfoScriber
system or if this market does not develop in the manner that we anticipate it
will, our expectations of growth will be adversely affected.
We have limited experience in establishing and maintaining strategic
relationships with health care and related industry participants. If we lose any
of our strategic relationships, fail to establish new strategic relationships or
our strategic relationships fail to benefit us as expected, we may not be able
to execute our business plan.
IF WE DO NOT GENERATE ENOUGH REVENUE TO FUND OUR BUSINESS PLAN.
Today, purchasers of medical information rely predominantly on
information that is derived from claims data or after-the-fact interviews of
health care providers. The InfoScriber system, unlike currently available
methods of data collection, captures data on a real-time basis and provides
insight as to the reasons that a medication or therapy was prescribed, as well
as the nature of the prescription. It is our belief that the market for
InfoScriber data will include pharmaceutical and medical device companies,
research organizations (market, outcomes and clinical research), provider
organizations and managed care organizations. However, we have only recently
begun to market InfoScriber's product and we cannot assure you that there will
be adequate demand for the data and services of our InfoScriber system. If we
are unable to charge an adequate price for these products and services, we will
likely not achieve the levels of growth we expect.
IF WE ARE UNABLE TO GENERATE A SUFFICIENT INFORMATION BASE FROM OUR
PANEL OF PARTICIPATING PROVIDERS.
We are in the process of building a panel of physician users so that the
data being captured for our InfoScriber system will be representative of
prescribing patterns and can be used for general analysis and business decision
making. Our first physician panel is in the area of central nervous system
disorders and we intend to establish additional panels in the future to gather
data from other therapeutic areas. We will depend on these panels to deliver a
sufficient amount of health information that can be used for researching,
analyzing and understanding physician prescribing patterns. If we are unable to
obtain enough physician users to generate a sufficient information base from
these panels, we may not be successful in introducing our InfoScriber database
and achieving market acceptance.
IF OUR SOFTWARE DEVELOPMENT EFFORTS ARE NOT SUCCESSFUL.
Early releases of software often contain errors or defects. We cannot
assure you that, despite our extensive testing, errors will not be found in our
new services before or after commercial release. This may result in product
redevelopment costs and the loss of, or delay in, market acceptance.
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In addition, our InfoScriber system may become obsolete and our business
may suffer if we cannot adapt to changing technologies. The Internet and
healthcare information markets are characterized by rapid technological changes
and we may be unable to anticipate changes that may make our existing technology
obsolete. Our success depends, in part, on our ability to:
- enhance existing products and services;
- develop new technology that addresses the needs of our existing
and new customers; and
- timely and cost effectively respond to technological advances,
and emerging industry standards and practices.
IF WE ARE UNABLE TO IMPLEMENT OUR ACQUISITION STRATEGY SUCCESSFULLY, OUR ABILITY
TO EXPAND OUR PRODUCTS, SERVICES AND CUSTOMER BASE MAY BE LIMITED.
We intend to pursue acquisitions of complementary businesses as one
means of expanding our InfoScriber system. Acquisitions involve many risks
including, but not limited to:
- difficulty in assimilating the operations and personnel of the
acquired business;
- integrating management information and accounting systems of the
acquired business;
- diverting management's attention from other business concerns of
the company; and
- potential loss of key employees of the acquired business.
Our management will be required to devote substantial time and attention
to the integration of acquired businesses, which involve many operational and
financial issues. Failure to integrate effectively acquired businesses could
have a material adverse effect on our business, financial condition and results
of operations.
We will continue to evaluate potential acquisitions of companies, or
investments in such companies that we believe will complement and enhance our
business. This business strategy may result in dilutive issuances of our equity
securities, the occurrence of additional debt or amortization expenses related
to goodwill and other intangible assets.
OUR BUSINESS PLAN DEPENDS ON OUR ABILITY TO SUCCESSFULLY DEVELOP AND PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS.
Our business plan is predicated on our proprietary systems and
technology, including InfoScriber. We protect our proprietary rights through a
combination of patent applications, trademark, trade secret and copyright laws,
confidentiality agreements and technical measures. Generally, we enter into
non-disclosure agreements with our consultants and limit access to our trade
secrets and technology. We cannot assure you that the steps we have taken will
prevent misappropriation of our technology. Misappropriation of our intellectual
property would have a material adverse effect on our competitive position and
could require us to engage in costly litigation to enforce and protect our
intellectual property rights or to defend against claims.
WE MAY INCUR UNANTICIPATED EXPENSES AND BE PREVENTED FROM PROVIDING OUR PRODUCTS
AND SERVICES IF WE ARE DEEMED TO BE INFRINGING ON THE PROPRIETARY RIGHTS OF A
THIRD PARTY.
We may be subject to intellectual property infringement claims as the
number of our competitors increases and the functionality of our services
overlap with their competitive products. While we do not believe that we have
infringed or are infringing on any valid proprietary rights of any third party,
we cannot assure you that infringement claims will not be asserted against us or
that those claims will be unsuccessful. We could incur substantial costs and
diversion of management resources if we are required to defend against such
claims. Furthermore, a claimant may secure a judgment against us that awards
them substantial damages, as well as injunctive or other equitable relief that
could effectively block our ability to provide our products or services.
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IF WE FAIL TO MAINTAIN A SECURE WEBSITE, WE MAY BE SUBJECT TO LIABILITY AND OUR
CUSTOMERS MAY BE DETERRED FROM USING OUR SERVICES.
The difficulty of securely transmitting confidential information over
the Internet has been a significant barrier to conducting e-commerce and
engaging in sensitive communications over the Internet. It is possible that
third parties could penetrate our network security or otherwise misappropriate
patient information and other data. Our operations could be interrupted if this
occurs and we may be subject to liability as a result. We may need to devote
significant financial and other resources to protect against security breaches,
or to alleviate problems caused by security breaches.
HEALTH SERVICES PROGRAMS
CURRENT REGULATIONS, AS WELL AS CHANGES IN THOSE LAWS AND THEIR INTERPRETATION,
SIGNIFICANTLY AFFECT THE COST OF OUR HEALTH SERVICES PROGRAMS AND THE AMOUNT OF
REIMBURSEMENT AVAILABLE FROM THE GOVERNMENT AND OTHER PAYORS.
Approximately 16% of our revenues are derived from health care providers
for our management and administration of their outpatient programs. We bill our
fees to the provider as a purchased management, administrative and consultative
support service. Substantially all of the patients admitted to these outpatient
programs are eligible for Medicare coverage and thus, the providers rely upon
payment from Medicare for the services. Many of the patients are also eligible
for Medicaid payments.
Medicare has published criteria limiting its coverage for partial
hospitalization services to patients whose conditions are quite severe. The
proper interpretation of Medicare's coverage criteria is often not clear. The
Health Care Financing Administration or "fiscal intermediaries" (private
contractors who administer the Medicare program as contractors to the
government) often interpret the Medicare coverage criteria in a very restrictive
manner and may deny coverage for services furnished to Medicare eligible
patients or disallow cost claims on the basis that such costs are unreasonable
and relate to uncovered services or are otherwise non-allowable.
Coverage denials can have a direct adverse impact on us since some of
our current as well as terminated contracts obligate us to refund to the
provider fees paid to us, and in some instances certain of the hospital's direct
costs, with respect to services for which coverage is denied. The occurrence of
coverage denials with respect to a significant number of providers or a
significant amount in fees could have a material adverse effect upon our
business, financial condition and results of operations.
On August 1, 2000, Medicare began using a pre-established reimbursement
rate for outpatient services under its "outpatient prospective payment system."
Under the new formula, Medicare will pay $202.14 per day (adjusted for
differences in wages in the area) of partial hospitalization service, assuming
that the services meet the coverage criteria. An amount for patient
"coinsurance", or the amount that the patient is expected to pay, will also be
deducted from this rate. Medicare reimbursements will be based upon this
established rate regardless of whether the amount is more or less than a
hospital's actual costs. In addition, most of the patients receiving services in
partial hospitalization programs managed by us are unable to pay the coinsurance
amount. To the extent that neither a Medicare patient nor any secondary payor
pays the coinsurance amount after a documented reasonable collection effort or
documentation of the patient's indigence, the provider is entitled to 55 percent
of this "bad debt" by Medicare. There are, however, many instances where
Medicare denies reimbursement for all or part of claimed bad debts for
coinsurance on grounds that the provider did not engage in a reasonable
collection effort or failed to maintain adequate documentation of its collection
effort or of the patient's indigence.
We cannot predict the effect that the new Medicare payment methodology
for partial hospitalization and other services will have on our customers'
willingness to continue or renew existing contracts or enter into new contracts
to the extent that we seek to obtain new contracts.
We also manage and operate the delivery of case management and other
psychiatric services, which are dependent upon Medicaid programs for
reimbursement. Medicaid funding is generally conditioned upon financial
appropriations to state Medicaid agencies by the state legislatures and there
are political pressures on such legislatures to control and reduce these
appropriations. With respect to our case management services reimbursed
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by behavioral health organizations, the overall trend is to impose lower
reimbursement rates, including incentives to assume risk not only by licensed
managed care organizations with whom state Medicaid agencies contract, but also
by subcontracted organizations such as us. Consequently, any significant
reduction in funding for Medicaid programs could have a material adverse effect
on our business, financial condition and results of operations.
WE MAY BE SUBJECT TO SCRUTINY OR CHALLENGED UNDER THE ANTI-REMUNERATION LAWS.
Medicare and Medicaid law prohibits an entity from paying or receiving,
subject to certain exceptions and "safe harbors," any remuneration to induce the
referral of Medicare or Medicaid beneficiaries, or the purchase or arranging for
or recommending of the purchase of items or services that may receive payment
under Medicare, Medicaid, or other federally-funded healthcare programs. Several
states have similar laws that are not limited to services for which Medicare or
Medicaid payments are made. Sanctions for violating these federal and state
anti-remuneration laws may include imprisonment, criminal and civil fines, and
exclusion from participation in Medicare, Medicaid or other applicable programs.
The courts, Office of Inspector General and administrative agencies
interpret the federal anti-remuneration law broadly. Because of the federal
statute's broad scope, the regulations establish certain safe harbors from
liability. Some of our practices do not satisfy all of the requirements
necessary to fall under the applicable safe harbor. A practice that does not
fall under a safe harbor, although not necessarily unlawful, may be subject to
scrutiny and challenge. We believe that we are in substantial compliance with
the legal requirements imposed by these laws and regulations, but there can be
no assurance that we will not be subject to scrutiny under such laws or
regulations. A successful challenge resulting from scrutiny could have a
material adverse effect on our business, financial condition and results of
operations.
WE MAY BE ADVERSELY AFFECTED IF OUR EXISTING RESERVES TO COVER REIMBURSEMENT
RISKS ARE INSUFFICIENT.
From time to time, we recognize charges to operations as a result of
particular uncertainties associated with the health care reimbursement rules as
they apply to the management of outpatient programs. In addition, certain of our
contracts with providers contain warranty obligations that require us to
indemnify the providers for the portion of our management fees disallowed for
reimbursement by Medicare's fiscal intermediaries. We maintain significant
reserves to cover the impact of these uncertainties, including:
- obligations to indemnify providers for some portion of our fees
that are subject to disallowance upon audit of a provider's cost
report by fiscal intermediaries; and
- portions of our fees not paid to us by a provider during the
periodic review of the provider's claims by fiscal
intermediaries.
Although we believe that our potential liability to satisfy our
indemnification obligations is adequately reserved in our financial statements,
there can be no assurance that the amount of fees disallowed will not be greater
than the amount of such reserves. Also, the obligation to pay such amounts, if
and when they become due, could have a material adverse effect on our short-term
liquidity.
GENERAL
WE MAY BE NEGATIVELY AFFECTED IF OUR INSURANCE COVERAGE IS INADEQUATE.
Participants in the mental health care industry are subject to an
inherent risk of claims of malpractice or other related legal theories. We may
be named as a defendant in such malpractice lawsuits, and are subject to the
attendant risk of substantial damage awards. While we believe we have adequate
liability insurance coverage, there can be no assurance that a future claim or
claims will not be successful or if successful will not exceed the limits of
available insurance coverage or that such coverage will continue to be available
at acceptable costs and on favorable terms.
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PRIVACY AND CONFIDENTIALITY LEGISLATION COULD NEGATIVELY AFFECT OUR BUSINESS.
Most of our activities require us to receive or use confidential medical
information about individual customers. In addition, we use aggregated anonymous
data for research and analysis purposes and with respect to our health
information business. Federal and some state legislation restrict the use and
disclosure of confidential medical information and the fact of treatment. There
are specific requirements permitting disclosure, but inadequate or incorrect
disclosure, even if inadvertent or negligent, can trigger substantial criminal
and other penalties. To date, no such legislation has been enacted that
adversely impacts our ability to provide our services.
There have, however, been a number of regulatory and legislative
initiatives in the area of medical privacy at the federal and state levels,
which could impact the manner in which we conduct our health information
business. Most of these initiatives seed to extend restrictions to non-patient
identifiable information or the process for anonymizing data. In addition, there
are initiatives that seek to restrict access to this information to
non-commercial uses. To protect privacy, no individual patient will be
identified in any of our health information data to be sold to third parties.
There can, however, be no assurance that these initiatives or future initiatives
will not adversely affect our ability to generate or assemble data or to develop
or market current or future products or services.
IF WE ARE DEEMED TO BE VIOLATING "CORPORATE PRACTICE OF MEDICINE" PROHIBITIONS,
OUR BUSINESS MAY BE ADVERSELY AFFECTED.
Many states prohibit physicians from splitting fees with non-physicians
and prohibit non-physician entities from practicing medicine. These laws vary
from state to state and are interpreted by courts and regulatory agencies with
broad discretion. We believe that the contractual arrangements for our health
information system and our administrative and management services do not violate
these laws. These contractual arrangements with some providers could, however,
be challenged on the basis of being an alleged unlicensed practice of medicine,
or the enforceability of provisions in those arrangements may be limited. If a
regulatory authority limits or prohibits us or an affiliate from conducting our
business, our contractual arrangements may require organizational modification
or restructuring.
RETENTION OF KEY PERSONNEL IS INSTRUMENTAL TO OUR SUCCESS.
We depend on the services of our current senior management for managing
our operations and implementing our business strategy. Our success is also
dependent on attracting and retaining qualified management personnel. The loss
of any or all of our management personnel or the inability to attract new
management personnel may have a material adverse effect on our business,
financial condition and results of operations.
In addition, our success and growth depend on attracting and retaining
qualified marketing, technical, clinical and other types of personnel. There are
no assurances that we will successfully attract and retain the qualified
personnel who are necessary to support the future of our business. Any inability
to do so may have a material adverse effect on our business, financial condition
and results of operations.
CORPORATE ACTIONS MAY BE CONTROLLED BY OUR OFFICERS, DIRECTORS AND THEIR
AFFILIATES.
Our officers, directors and their affiliates own over 37% of all issued
and outstanding shares of our common stock. The officers and directors do not
have any arrangement or understanding among themselves with respect to the
voting of such shares of common stock beneficially owned by them. These
individuals acting together could, however, elect a majority of our Board of
Directors and control our policies and day-to-day management.
CERTAIN PROVISIONS OF DELAWARE LAW, OUR AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION AND OUR AMENDED AND RESTATED BY-LAWS MAY DELAY, DISCOURAGE OR
PREVENT A CHANGE IN CONTROL OF OUR COMPANY.
Certain provisions of Delaware law may discourage bids for our common
stock at a premium over the market price of the common stock and may adversely
affect the market price and the voting and other rights of the holders of common
stock. In addition, our Board of Directors has the authority without action by
you to fix the
7
<PAGE> 11
rights, privileges and preferences of, and to issue, shares of our preferred
stock that may have the effect of delaying, deterring or preventing a change in
control.
In addition to the authorization of preferred stock, our certificate of
incorporation and by-laws include several other provisions that may have the
effect of inhibiting a change of control. These include staggered terms for the
Board of Directors (which could delay or prevent stockholders from effecting a
change of control), limitations on the stockholders' ability to call a meeting
or remove directors, and requirement of a two-thirds vote of stockholders for
amendment to our certificate of incorporation and to approve certain business
combinations. These provisions may discourage a party from making a tender offer
for or otherwise attempting to obtain control of our company. Our Board of
Directors does not currently have any plans, arrangements, commitments or
understandings to issue any preferred stock.
MARKET FLUCTUATIONS AND VOLATILITY MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR
COMMON STOCK.
The market price of our common stock could be subject to significant
fluctuations in response to various factors and events that may be unrelated to
our operating performance. These include, but are not limited to the following:
- liquidity of the market for our common stock;
- variations in our quarterly results of operations;
- revisions to existing estimates of earnings by research
analysts;
- overall price and volume fluctuations of the stock market;
- new statutes or regulations;
- changes in the interpretation of existing statutes or
regulations; and
- market conditions that affect the health care industry
generally, or mental health services specifically.
SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR
COMMON STOCK.
The 888,978 shares covered by this prospectus may be sold by the
selling stockholders into the public market at any time pursuant to this
prospectus. Future sales of shares of our common stock, or the perception that
such sales may occur, could adversely affect the market price of our common
stock.
8
<PAGE> 12
USE OF PROCEEDS
While we are not the owner of any of the shares of our common stock
offered pursuant to this prospectus, we are entitled to receive, as payment of
amounts outstanding under promissory notes payable by the selling stockholders
to us, proceeds received in exchange for 434,355 of the shares of common stock
offered hereby, up to $643,588. The loans to the selling stockholders were for
payment of the exercise price and income tax obligations arising from the
selling stockholders' exercise of stock options to purchase shares of common
stock. See "Selling Stockholders."
SELLING STOCKHOLDERS
The following table sets forth certain information concerning the
selling stockholders for whom we are registering the resale of shares of our
common stock. The beneficial ownership of the shares of common stock was
determined in accordance with Rule 13d-3 under the Exchange Act and reflects the
ownership of shares issuable upon exercise of outstanding options that are
exercisable within 60 days. As provided in the rule, shares issuable to any
holder are deemed to be outstanding for the purpose of calculating the holder's
beneficial ownership but not any other holder's beneficial ownership. The shares
of common stock listed under the heading "Number of Shares Being Offered" may
include shares of common stock issuable upon exercise of options that are owned
by the selling stockholders and exercisable within 60 days. Because the selling
stockholders may offer all, some or none of their common stock, no definitive
estimate as to the number of shares that will be held by the selling
stockholders after such offering can be provided.
This information is based upon information provided by each respective
selling stockholder. To our knowledge, the persons named in the table above have
sole voting and investment power with respect to all shares of the common stock
shown as beneficially owned by them, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
NUMBER OF
SHARES BENEFICIALLY OWNED SHARES SHARES BENEFICIALLY OWNED
BEFORE OFFERING BEING AFTER OFFERING
NAME OF SELLING STOCKHOLDER AND POSITION NUMBER PERCENT(3) OFFERED(4) NUMBER(4) PERCENT
---------------------------------------- ------ ---------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
Mark P. Clein(1) 544,630 7.5% 544,630 -- *
Chief Executive Officer and
Director
Fred D. Furman(2) 344,348 4.9% 344,348 -- *
President
</TABLE>
(*) Assuming the sale of all shares of common stock being offered for sale
by this prospectus, represents less than 1% of the outstanding common
stock.
(1) Mark P. Clein, has been a director of our company since May 27, 1999.
Mr. Clein has served as Chief Executive Officer of our company since May
14, 1999, and previously served as our Executive Vice President and
Chief Financial Officer from May 1996 to May 1999. Mr. Clein issued
promissory notes to us evidencing his obligation to pay an aggregate
principal amount of up to $724,708, applied to the payment of the
exercise price and income tax obligations arising from Mr. Clein's
exercise of certain stock options. The notes are secured by a stock
pledge agreement, which provides that proceeds from the sale of the
pledged shares shall be applied toward payment of the outstanding
principal and interest of the notes. As of August 14, 2000, an aggregate
principal amount of $256,682 was outstanding under the notes and 196,398
shares of common stock held by Mr. Clein were pledged as collateral.
(2) Fred D. Furman has served as President and General Counsel since April
1997. Previously, he held the position of Executive Vice President --
Administration and General Counsel from March 1995 to April 1997. Mr.
Furman issued promissory notes to us evidencing his obligation to pay an
aggregate principal amount of up to $878,061, applied to the payment of
the exercise price and income tax obligations arising from Mr. Furman's
exercise of certain stock options. The notes are secured by a stock
pledge agreement, which provides that proceeds from the sale of the
pledged shares shall be applied toward payment of the outstanding
principal and interest of the notes. As of August 14, 2000, an aggregate
principal amount of $386,906 was outstanding under the notes and 237,957
shares of common stock held by Mr. Furman were pledged as collateral.
(3) Percentage ownership is based on 7,048,017 shares of common stock
outstanding as of August 14, 2000.
(4) The number of shares beneficially owned after the offering assumes that
all of the shares offered in this prospectus are sold by the selling
stockholders.
9
<PAGE> 13
PLAN OF DISTRIBUTION
The selling stockholders have pledged 434,355 of the shares offered
hereby to us as security for amounts due under promissory notes. The notes to
the selling stockholders were for payment of the exercise price and income tax
obligations arising from the selling stockholders' exercise of stock options to
purchase shares of common stock. See "Selling Stockholders."
The selling stockholders and any broker-dealer engaged by the selling
stockholders, in its capacity as an agent or principal, may, from time to time,
sell any or all of the shares of our common stock offered hereby on The NASDAQ
National Market or in private transactions. These sales may be at fixed or
negotiated prices. It is anticipated that the selling stockholders will make
arrangements with a single broker-dealer who will act as agent for the sale of
the shares offered, or who will acquire the shares as principal and then resell
the shares. Certificates evidencing shares pledged to us will be delivered to
the broker-dealer against an agreement from the broker-dealer to remit to us
proceeds received in exchange for such shares to the extent of amounts due under
the promissory notes and to return to us the certificates evidencing any shares
not sold. Under such agreement, we will release our lien against shares pledged
to us at the time of sale of those shares.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
The broker-dealer engaged by the selling stockholders may arrange for
other broker-dealers to participate in sales. The broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed amounts customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We have agreed to pay all fees and expenses incident to the registration
of the shares, including fees and disbursements of counsel.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed
upon by Vinson & Elkins L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of PMR Corporation appearing in
PMR Corporation's Annual Report (Form 10-K) for the year ended April 30, 2000,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
10
<PAGE> 14
WHERE YOU CAN GET MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act with respect to this offering. This prospectus, which forms a
part of the registration statement, does not contain all the information
included in the registration statement and the attached exhibits.
We file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Exchange Act. The registration
statement of which this prospectus forms a part and these reports, proxy
statements and other information can be inspected and copied at the public
reference room maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World
Trade Center, Suite 1300, New York, New York 10048. Copies of these materials
may also be obtained from the SEC at prescribed rates by writing to the public
reference room maintained by the SEC at Room 1024, Judiciary Plaza, 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 a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding us. The reports, proxy and information statements
and other information about us can be downloaded from the SEC's website and can
also be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the securities described in this prospectus are sold:
- the description of our common stock contained in our
registration statement on Form 10 and Amendment No. 1 to Form
10, as filed with the SEC on July 31, 1992 and September 8,
1992, respectively;
- our annual report on Form 10-K for the fiscal year ended April
30, 2000; and
- our quarterly report on Form 10-Q for the quarter ended July 31,
2000.
You may request a copy of these filings (other than an exhibit to a
filing unless that exhibit is specifically incorporated by reference into that
filing) at no cost, by writing or telephoning us at the following address:
PMR Corporation
501 Washington Street, Fifth Floor
San Diego, California 92103
Attn: Chief Financial Officer
(619) 610-4001
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with any information. You should not assume that the information in this
document is current as of any date other than the date on the front page of this
prospectus.
11
<PAGE> 15
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Generally, Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify certain persons made a party to an action, by reason of
the fact that such person is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise. In
the case of an action by or in the right of the corporation, no indemnification
may be made in respect of any matter as to which such person was adjudged liable
for negligence or misconduct in the performance of such person's duty to the
corporation unless the Delaware Court of Chancery or the court in which such
action was brought determines that despite the adjudication of liability such
person is fairly and reasonably entitled to indemnity for proper expenses. To
the extent such person has been successful in the defense of any matter such
person shall be indemnified against expenses actually and reasonably incurred by
him.
Section 102(b)(7) of the Delaware General Corporation Law enables a
corporation to include a provision in its certificate of incorporation
eliminating or limiting a director's liability to the corporation or its
stockholders for monetary damages for breaches of fiduciary duty as a director
except for (i) liability of a director for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) unlawful payment of dividends or unlawful stock purchase or
redemption; or (iv) any transaction from which the director received an improper
personal benefit.
Our Amended and Restated Certificate of Incorporation and Amended and
Restated By-Laws include provisions to (i) eliminate the personal liability of
our directors for monetary damages resulting from breaches of their fiduciary
duty to the extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law and (ii) to indemnify our directors and officers to the fullest
extent permitted by applicable law, including circumstances in which
indemnification is otherwise discretionary. We also maintain directors and
officers liability insurance.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers or persons
controlling our company pursuant to the foregoing provisions, we have been
informed 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.
12
<PAGE> 16
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE STATEMENTS AND REPRESENTATIONS CONTAINED
WITHIN THIS PROSPECTUS ARE TRUE AND CORRECT AS OF THE DATE INDICATED ON THE
COVER PAGE. THE DELIVERY OF THIS PROSPECTUS DOES NOT, UNDER ANY CIRCUMSTANCES,
CREATE THE IMPLICATION THAT THERE HAS BEEN NO CHANGE SINCE THAT DATE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THOSE REGISTERED SECURITIES TO WHICH THE PROSPECTUS
RELATES. MOREOVER, THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY IN ANY CIRCUMSTANCES IN WHICH SUCH AN OFFER OR
SOLICITATION IS UNLAWFUL.
888,978 SHARES
PMR CORPORATION
[LOGO]
COMMON STOCK
-------------------------------------
PROSPECTUS
--------------------------------------------
<PAGE> 17
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses payable by us in
connection with the registration of the shares of common stock covered by this
prospectus. All amounts except the registration fee are estimated.
<TABLE>
<S> <C>
SEC Registration Fee $ 484
Legal Fees and Expenses 8,000
Accountant's Fees and Expenses 5,500
Printing Expenses 2,000
Miscellaneous 0
--------
Total $ 15,984
========
</TABLE>
We have agreed to pay all fees and expenses incident to the registration
of the shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, Article VII and Article
VIII of our Amended and Restated Certificate of Incorporation and Sections 1 and
2 of Article VII of our Amended and Restated By-Laws provide for the limitation
of liability and indemnification of our officers, directors, employees and
agents under certain circumstances. In addition, we maintain directors and
officers liability insurance.
Set forth below is Article VII of our Amended and Restated Certificate
of Incorporation pertaining to the limitation of liability of directors:
"A. No director shall be personally liable to the Corporation or
its stockholders for monetary damages for any breach of fiduciary duty
by such director as a director, except (i) for breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the stockholders of this
Article VII to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a
director shall be eliminated or limited to the fullest extent permitted
by Delaware General Corporation Law, as so amended.
B. Any repeal or modification of this Article VII shall be
prospective and shall not affect the rights under this Article VII in
effect at the time of the alleged occurrence of any act or omission to
act giving rise to liability or indemnification."
Set forth below is Article VIII of our Amended and Restated Certificate
of Incorporation pertaining to indemnification of officers, directors, employees
and agents and insurance:
"The Corporation may indemnify any person who is or was a party or is
threatened to be made a party to any threatened, pending or completed
cation, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against any and all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement or
incurred in connection with the investigation, preparation to defend or
defense of such action, suit, proceeding or claim, to the fullest extent
<PAGE> 18
permitted by the Delaware General Corporation Law, as amended from time
to time. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent
of the Corporation or another corporation, partnership, joint venture,
trust or other enterprise, against any such expense, liability or loss,
to the fullest extent permitted by the Delaware General Corporation Law.
Set forth below are Sections 1 and 2 of Article VII of our Amended and
Restated By-Laws:
"SECTION 1. INDEMNIFICATION IN SUITS AND PROCEEDINGS WITH
OTHERS. The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any 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) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
SECTION 2. INDEMNIFICATION IN DERIVATIVE SUITS. The Corporation
shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper."
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Restated Certificate of Incorporation of PMR Corporation
(incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended April 30, 1998).
3.2 Amended and Restated Bylaws of PMR Corporation (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended April 30, 1997).
4.1 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
Registration Statement No. 23-20095-A on Form S-18).
5.1* Opinion of Vinson & Elkins L.L.P.
23.1** Consent of Ernst & Young LLP.
23.2* Consent of Vinson & Elkins L.L.P. (contained in Exhibit 5.1 hereto).
24.1** Powers of Attorney.
99.1 Promissory Note between Mark Clein and PMR Corporation in the amount
of $467,500, dated January 19, 2000 (incorporated by reference to
Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the
period ended January 31, 2000).
99.2 Promissory Note between Mark Clein and PMR Corporation in the amount
of $257,208, dated January 19, 2000 (incorporated by reference to
Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the
period ended January 31, 2000).
99.3 Stock Pledge Agreement between Mark Clein and PMR Corporation dated
January 19, 2000 (incorporated by reference to Exhibit 99.1 to the
Company's Quarterly Report on Form 10-Q for the period ended January
31, 2000).
99.4 Promissory Note between Fred Furman and PMR Corporation in the
amount of $684,750, dated January 19, 2000 (incorporated by
reference to Exhibit 99.1 to the Company's Quarterly Report on Form
10-Q for the period ended January 31, 2000)
99.5 Promissory Note between Fred Furman and PMR Corporation in the
amount of $193,311, dated January 19, 2000 (incorporated by
reference to Exhibit 99.1 to the Company's Quarterly Report on Form
10-Q for the period ended January 31, 2000).
99.6 Stock Pledge Agreement between Fred Furman and PMR Corporation dated
January 19, 2000 (incorporated by reference to Exhibit 99.1 to the
Company's Quarterly Report on Form 10-Q for the period ended January
31, 2000).
</TABLE>
--------------------
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS.
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;
(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 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 a 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;
<PAGE> 20
Provided, however, that paragraphs (1)(i) and (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
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, 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; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(4) 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.
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 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, 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.
<PAGE> 21
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 of the requirements for filing on Form S-3 and has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on December 4, 2000.
PMR CORPORATION
By: /s/ Mark P. Clein
----------------------------
Mark P. Clein
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Mark P. Clein Chief Executive Officer and December 4, 2000
------------------------------------ Director (Principal Executive
MARK P. CLEIN Officer)
* Chief Financial Officer December 4, 2000
------------------------------------
L. JEAN DUNN
* Executive Vice President, December 4, 2000
------------------------------------ Secretary and Director
SUSAN D. ERSKINE
* Chairman of the Board of December 4, 2000
------------------------------------ Directors
ALLEN TEPPER
* Director December 4, 2000
------------------------------------
EUGENE D. HILL, III
* Director December 4, 2000
------------------------------------
CHARLES C. MCGETTIGAN
* Director December 4, 2000
------------------------------------
RICHARD A. NIGLIO
* Director December 4, 2000
------------------------------------
SATISH K. TYAGI
*By: /s/ Mark P. Clein
--------------------------------
MARK P. CLEIN
Attorney-in-fact
</TABLE>
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Restated Certificate of Incorporation of PMR Corporation
(incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended April 30, 1998).
3.2 Amended and Restated Bylaws of PMR Corporation (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended April 30, 1997).
4.1 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement No. 23-20095-A
on Form S-18).
5.1* Opinion of Vinson & Elkins L.L.P.
23.1** Consent of Ernst & Young LLP.
23.2* Consent of Vinson & Elkins L.L.P. (contained in Exhibit 5.1 hereto).
24.1** Powers of Attorney.
99.1 Promissory Note between Mark Clein and PMR Corporation in the amount
of $467,500, dated January 19, 2000 (incorporated by reference to
Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the
period ended January 31, 2000).
99.2 Promissory Note between Mark Clein and PMR Corporation in the amount
of $257,208, dated January 19, 2000 (incorporated by reference to
Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for the
period ended January 31, 2000).
99.3 Stock Pledge Agreement between Mark Clein and PMR Corporation dated
January 19, 2000 (incorporated by reference to Exhibit 99.1 to the
Company's Quarterly Report on Form 10-Q for the period ended January
31, 2000).
99.4 Promissory Note between Fred Furman and PMR Corporation in the
amount of 684,750, dated January 19, 2000 (incorporated by reference
to Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q for
the period ended January 31, 2000)
99.5 Promissory Note between Fred Furman and PMR Corporation in the
amount of $193,311, dated January 19, 2000 (incorporated by
reference to Exhibit 99.1 to the Company's Quarterly Report on Form
10-Q for the period ended January 31, 2000).
99.6 Stock Pledge Agreement between Fred Furman and PMR Corporation dated
January 19, 2000 (incorporated by reference to Exhibit 99.1 to the
Company's Quarterly Report on Form 10-Q for the period ended January
31, 2000).
</TABLE>
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* Filed herewith.
** Previously filed.
