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Filed pursuant to Rule 424(b)(3)
Registration No. 333-87747
PROSPECTUS
4,500,000 Shares
PER-SE TECHNOLOGIES, INC.
Common Stock
Our stockholder, Foundation Health Systems, Inc. (formerly known as Health
Systems International, Inc.), is offering and selling 4,500,000 shares of our
common stock under this prospectus. The selling stockholder acquired the
4,500,000 shares from us in a settlement of various claims against us arising
from a stock for stock merger transaction on May 31, 1996 in which all
shareholders of Health Data Sciences Corporation (including the selling
stockholder) received shares of our common stock in exchange for their shares of
Health Data Sciences Corporation stock.
The selling stockholder will sell its shares of common stock through public
or private transactions at prevailing market prices or at privately negotiated
prices. The selling stockholder has an agreement with Donaldson, Lufkin &
Jenrette Securities Corporation under which DLJ will assist the selling
stockholder in selling its shares of common stock. See "Plan of Distribution."
We will not receive any of the proceeds from the sale of shares of common stock
by the selling stockholder, except as otherwise described in "Plan of
Distribution."
Our common stock is listed on the Nasdaq National Market under the symbol
"PSTI." On October 7, 1999, the last sale price of our common stock as reported
by Nasdaq was $2.97 per share.
Our principal executive offices are located at 2840 Mt. Wilkinson Parkway,
Suite 300, Atlanta, Georgia 30339-3632, and our telephone number is (770)
444-5300.
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THIS INVESTMENT INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE 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 October 12, 1999
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TABLE OF CONTENTS
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Additional Information...................................... 2
Incorporation of Certain Documents by Reference............. 3
Cautionary Notice Regarding Forward-Looking Statements...... 3
Risk Factors................................................ 4
The Company................................................. 9
Use of Proceeds............................................. 9
Selling Stockholder......................................... 10
Plan of Distribution........................................ 10
Legal Matters............................................... 12
Experts..................................................... 12
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ADDITIONAL INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the Commission. You may read and copy any document we file at the
following locations of the Commission:
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Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
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You may call 1-800-SEC-0330 for more information on the Commission's public
reference facilities. You may also obtain copies of this information by mail
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. The Commission also
maintains an Internet site at http://www.sec.gov that contains reports, proxy
statements and other information about issuers, like Per-Se Technologies, who
file electronically with the Commission. In addition, you can inspect reports,
proxy statements and other information about Per-Se Technologies at the offices
of The Nasdaq Stock Market, Inc., Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006. Also, you can find more information about Per-Se
Technologies on our Internet website at http://www.per-se.com. However,
information contained in or linked to our website does not constitute part of
this prospectus and is not, and shall not be deemed to be, incorporated into
this prospectus by reference.
This prospectus is part of a registration statement that we filed with the
Commission. The registration statement contains more information than this
prospectus regarding Per-Se Technologies and our common stock, including certain
exhibits. You can get a copy of the registration statement from the Commission
at the addresses listed above or from its Internet site.
We furnish stockholders with annual reports containing audited financial
statements and with proxy materials for our annual meeting of stockholders
complying with the Exchange Act of 1934, as amended.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate" into this prospectus information
we file with the Commission in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information we file later with the Commission will
automatically update and, to some extent, supersede this information. We
incorporate by reference the documents listed below, except to the extent
information in those documents is different from the information contained in
this prospectus, and all future documents filed with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
the termination of the offering of these shares:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
(b) Current Report on Form 8-K filed February 12, 1999 (event date
February 12, 1999);
(c) Current Report on Form 8-K filed May 5, 1999 (event date April 20,
1999);
(d) Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
(e) Quarterly Report on Form 10-Q for the quarter ended June 30, 1999;
(f) Current Report on Form 8-K filed August 16, 1999 (event date
August 16, 1999);
(g) Current Report on Form 8-K filed September 21, 1999 (event date
September 20, 1999);
(h) The description of common stock set forth in the registration
statement on Form 8-A/A filed May 22, 1996, and any amendment or report
filed for the purpose of updating such description; and
(i) The description of Rights set forth in the registration statement
on Form 8-A filed February 12, 1999, and any amendment or report filed for
the purpose of updating such description.
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any and all of
the documents that have been incorporated by reference in this prospectus (not
including exhibits to such documents unless such exhibits are specifically
incorporated by reference in this prospectus). Requests should be directed to
Per-Se Technologies, Inc., 2840 Mt. Wilkinson Parkway, Suite 300, Atlanta,
Georgia 30339-3632, Attention: Corporate Secretary; telephone number (770)
444-5300.
You should rely only on the information contained or incorporated by
reference in this document. We have not authorized anyone to provide you with
information that is different from that which is contained or incorporated by
reference in this prospectus. The common stock is not being offered in any state
where the offer is not permitted. You should not assume that the information in
this prospectus is accurate as of any date other than the date on the front of
this prospectus.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES STATEMENTS THAT MAY CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND THE SECURITIES
EXCHANGE ACT OF 1934. THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT,
BELIEF OR CURRENT EXPECTATIONS OF PER-SE TECHNOLOGIES AND MEMBERS OF PER-SE
TECHNOLOGIES' MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH
STATEMENTS ARE BASED. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH
FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE
RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS
CURRENTLY KNOWN TO PER-SE TECHNOLOGIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE IN FORWARD-LOOKING STATEMENTS ARE SET FORTH IN THE "RISK
FACTORS" SECTION OF THIS PROSPECTUS AND THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS INCLUDED AS AN EXHIBIT TO THE REPORTS FILED BY PER-SE
TECHNOLOGIES WITH THE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND
INCORPORATED HEREIN BY REFERENCE. PER-SE TECHNOLOGIES UNDERTAKES NO OBLIGATION
TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS,
THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS
OVER TIME.
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RISK FACTORS
Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should carefully consider
these risk factors, together with all of the other information included in this
prospectus, before you decide whether to purchase shares of our common stock.
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
We have a significant amount of indebtedness and, as a result, significant
obligations to make payments on our debt. If we are unable to make the required
debt payments, we could be required to reduce or delay capital expenditures,
sell certain of our assets, restructure or refinance our indebtedness, or seek
additional equity capital. Our ability to make payments on our debt obligations
will depend on our future operating performance, which will be affected by
certain conditions that are beyond our control.
Our substantial indebtedness could have important consequences to our
financial performance. For example:
- our ability to obtain additional financing in the future may be impaired;
- if a substantial portion of our cash flow from operations is dedicated to
the payment of debt, we may have reduced funds available for operations;
- the terms of our existing debt places restrictions on us, including our
ability to incur additional debt or pay dividends; and
- we may be more leveraged than our competitors, which may limit our
flexibility to respond to changes in the marketplace and may place us at
a competitive disadvantage.
WE ARE SUBJECT TO ONGOING LITIGATION AND A GOVERNMENT INVESTIGATION THAT MAY
ADVERSELY AFFECT OUR BUSINESS.
We are involved in several lawsuits which may expose us to material loss
contingencies. These lawsuits include, but are not limited to, claims brought by
former stockholders of companies that we acquired and claims by customers and
former customers. We have also received written demands from customers and
former customers that have not yet resulted in legal action and may receive
demands with respect to the operation of our business and actions we have taken,
including modifications made to a computerized coding tool to assist in
healthcare reimbursement used by one of our subsidiaries and the transition from
the computerized coding tool to manual coding. We are also subject to a formal,
non-public investigation by the Securities and Exchange Commission into, among
other things, insider trading and other issues relating to restatements of our
financial statements.
We may not be able successfully to defend any of these lawsuits. In
addition, other lawsuits may be filed and other governmental investigations may
be commenced against us. Existing or new lawsuits or new government
investigations could have a material adverse effect on us. The ongoing
governmental investigation against us may result in significant fines, damages
or other penalties and the Commission could require further restatements of our
financial statements. The investigation could have a material adverse effect on
us. Also, in the event of an adverse outcome with respect to pending lawsuits,
there is the risk that our insurance coverage may not fully cover any damages
assessed against us. The litigation with which we are involved (as well as
future litigation) could have a disruptive effect upon the operations of the
business and consume the time and attention of our senior management.
WE HAVE INCURRED SIGNIFICANT LOSSES IN RECENT YEARS.
We had losses in each of 1995, 1996, 1997, 1998 and 1999. Most of these
losses result from restructuring and other charges, litigation settlements,
intangible asset impairment, and acquisition costs. We cannot assure you when or
if we will become profitable in the future.
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WE HAVE SUFFERED SIGNIFICANT SETBACKS IN RECENT YEARS AND MAY NOT BE ABLE TO
TURNAROUND SUCCESSFULLY.
We have suffered several setbacks in recent years, including:
- government investigations;
- the failure successfully to integrate acquired companies;
- restatements of our 1994, 1995, 1996 and interim 1997 financial
statements;
- the discontinuance of the operations of one of the businesses we
acquired;
- the abandonment of an extensive reengineering program that failed;
- a steep drop in the price of our common stock; and
- the filing of various lawsuits and claims against us.
As a result of these setbacks, we have been operating in what is commonly
described as a "turnaround" situation. In addition to risks associated with
"turnaround" situations, we face certain challenges more specific to our
operations, including:
- successfully integrating acquired companies;
- shifting our strategic focus from acquiring compatible businesses to
running our existing businesses efficiently and profitably;
- managing our customers' perceptions of our continued viability and
focusing on customer service;
- combating employee turnover;
- reducing costs and increasing efficiencies; and
- reevaluating the efficiency of our operations following our abandonment
of the reengineering initiative in 1996.
WE MAY NOT BE ABLE TO KEEP UP WITH CHANGES IN OUR INDUSTRY.
The markets for our software products and services are characterized by
rapidly changing technology, evolving industry standards and frequent new
product introductions. We may not be able to keep pace with changes in our
industry. Our success depends in part upon our ability to:
- enhance our existing products and services;
- introduce new products and services quickly and cost effectively;
- achieve market acceptance for new products and services; and
- respond to emerging industry standards and other technological changes.
Also, our competitors may develop competitive products that could adversely
affect our operating results. In addition, it is possible that:
- we will be unsuccessful in refining, enhancing and developing our
software and billing systems going forward;
- the costs associated with refining, enhancing and developing our software
and systems may increase significantly in the future; or
- our existing software and technology will become obsolete as a result of
ongoing technological developments in the marketplace.
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WE COULD LOSE CERTAIN CUSTOMERS IF WE ARE NOT SUCCESSFUL ON SEVERAL MAJOR CLIENT
PROJECTS.
Our client/server information technology business involves projects
designed to reengineer customer operations through the strategic use of imaging,
client/server and other advanced technologies. Failure to meet our customers'
expectations with respect to a major project could have the following
consequences:
- damage our reputation and standing in this marketplace;
- impairment of our ability to attract new client/server information
technology business;
- the payment of damages to a customer; and
- the inability to collect for services already performed on the project.
WE MAY INCUR ADDITIONAL COSTS BECAUSE OF POTENTIAL "YEAR 2000" PROBLEMS.
Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results as we approach or
when we reach the Year 2000.
We have undertaken an assessment of our Year 2000 issues. We have
identified some older computer systems that we will replace with more efficient
processing systems, rather than attempting to make all these older systems Year
2000 compliant. Until we have replaced all these older systems, we cannot be
sure that our efforts to address Year 2000 issues are appropriate, adequate or
complete. In addition, we cannot be sure that we have identified all Year 2000
problems in the computer systems of our customers, vendors or resellers, or that
we will be able to successfully remedy any future problems that are discovered.
As a result of Year 2000 issues and the replacement of older computer
systems, we may suffer the following consequences:
- we may incur a significant amount of additional expenses to remedy Year
2000 issues and we may experience a significant loss of revenues;
- our existing customers may be adversely impacted by Year 2000 problems,
which could cause fluctuations in our revenue; and
- our failure to identify and remedy all Year 2000 problems could put us at
a competitive disadvantage relative to companies that have corrected such
problems.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH OTHER MANAGEMENT SERVICES
COMPANIES.
The medical management services business is highly competitive. We compete
with national and regional physician and hospital reimbursement organizations
and collection businesses, national information and data processing
organizations, and physician groups and hospitals that provide their own
business management services. We are uncertain whether we can continue to
compete successfully with all of these competitors.
Potential industry and market changes that could adversely affect our
ability to compete for billing and collection business include:
- an increase in the number of managed care providers compared to
fee-for-service providers; and
- new alliances between healthcare providers and third-party payors in
which healthcare providers are employed by such third-party payors.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH OTHER INFORMATION TECHNOLOGY
COMPANIES.
The business of providing application software, information technology and
consulting services is also highly competitive. We compete with national and
regional companies in this regard. Certain of our
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competitors have longer operating histories and greater financial, technical and
marketing resources than we do. We are uncertain whether we can continue to
compete successfully with these competitors.
OUR REVENUE AND OPERATIONS MAY BE ADVERSELY AFFECTED BY PRICING PRESSURES THAT
ADVERSELY AFFECT OUR CUSTOMERS.
We believe that the revenue growth rate experienced by our healthcare
clients continues to be adversely affected by managed care pricing and declining
government reimbursement levels. At the same time, the process of submitting
healthcare claims for reimbursement to third-party payors in accordance with
applicable industry and regulatory standards grows in complexity and cost. We
believe that these trends have adversely affected and could continue to
adversely affect our customers' revenues and profitability and, therefore,
adversely affect us too.
CHANGES IN THE HEALTHCARE MARKETPLACE MAY DECREASE DEMAND FOR OUR BILLING
SERVICES.
In general, consolidation initiatives in the healthcare marketplace may
result in fewer potential customers for our services. Some of these types of
initiatives include:
- employer initiatives such as creating purchasing cooperatives, like HMOs;
- provider initiatives, such as risk-sharing among healthcare providers and
managed care companies through capitated contracts; and
- integration among hospitals and physicians into comprehensive delivery
systems.
We believe that the continued consolidation of management and billing
services through integrated delivery systems could result in a decrease in
demand for our billing and collection services for particular physician
practices.
FUTURE INVESTIGATIONS OF HEALTHCARE BILLING AND COLLECTION PRACTICES MAY
ADVERSELY AFFECT OUR BUSINESS.
Our medical billing and collection activities are governed by numerous
federal and state civil and criminal laws. Federal and state regulators
increasingly use these laws to investigate healthcare providers and companies
like us, that provide billing and collection services. In connection with these
laws:
- we may be subjected to federal or state government investigation and
possible civil or criminal fines;
- we may ultimately be required to defend a false claims action;
- we may be sued by private payors; or
- we may be excluded from Medicare, Medicaid and/or other government funded
healthcare programs.
We have been the subject of several federal investigations, and we may
become the subject of false claims litigation or additional investigations
relating to our billing and collection activities. Any such proceeding or
investigation could have a material adverse effect on our business.
The ownership and operation of hospitals is also subject to comprehensive
regulation by federal and state governments that may adversely affect hospital
reimbursement. This regulation could have an adverse effect on the operations of
hospitals in general, and consequently reduce the amount of our revenues related
to hospital clients. Current or future government regulations or healthcare
reform measures may have a material adverse effect upon our business.
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OUR STOCK PRICE HAS BEEN VOLATILE AND COULD CONTINUE TO FLUCTUATE SUBSTANTIALLY.
Our common stock is listed on the Nasdaq National Market. The market price
of our common stock has been volatile and could fluctuate substantially, based
on a variety of factors, including the following:
- announcements relating to governmental investigations;
- our liquidity and financial resources;
- our divestiture of businesses;
- the status of lawsuits or other demands;
- healthcare reform measures;
- quarter-to-quarter and year-to-year variations in financial results; and
- failure to continue to meet Nasdaq National Market listing requirements.
Furthermore, stock prices for many companies fluctuate widely for reasons
that may be unrelated to their operating results. These fluctuations and general
economic, political and market conditions may adversely affect the market price
of our common stock.
LISTING ON NASDAQ NATIONAL MARKET.
Our common stock is currently traded on the Nasdaq National Market. Nasdaq
has notified us that we are out of compliance with the Nasdaq National Market's
continued listing requirements of a minimum bid price of $5.00 or net tangible
assets of $4 million. Nasdaq has notified us that our situation is being
reviewed, and that a decision by Nasdaq is likely to be issued in December 1999.
We expect that we have until that time to:
- meet the requirements;
- file an appeal with Nasdaq; or
- make an application to have our common stock traded on the Nasdaq
SmallCap Market or other exchange.
We have formulated plans, including a possible reverse stock split, that we
could implement to avoid a change in our Nasdaq National Market listing.
In addition, since we currently meet all listing requirements for the
Nasdaq SmallCap Market, we are prepared to make an application for listing of
our common stock on that market, if necessary.
There can be no assurance that we will be able to implement these plans
successfully. If our stock price does not otherwise regain compliance with the
Nasdaq National Market requirements then our common stock could potentially be
de-listed from the Nasdaq National Market depending upon our ability to
implement certain of these plans. In that event, our common stock would then be
traded in the over-the-counter market. Such a result could adversely impact the
liquidity of our common stock.
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THE COMPANY
Per-Se Technologies, which was incorporated in 1985 in Delaware and was
formerly known as Medaphis Corporation, is a global leader in delivering
integrated financial and clinical software solutions, comprehensive business
management services, and Internet-enabled connectivity to healthcare providers.
Per-Se's integrated financial and clinical software offerings include
patient scheduling, staff management, clinical information systems and patient
financial management software.
Our business management services to physicians and healthcare
organizations, include clinical data collection, data input, medical coding,
billing, contract management, cash collections and accounts receivable
management. These services are designed to assist healthcare providers with the
business management functions associated with the delivery of healthcare
services, allowing physicians and hospital staff to focus on providing quality
patient care. These services also assist physicians and healthcare organizations
in improving cash flows and reducing administrative costs and burdens.
We also offer Internet-enabled connectivity to both integrated healthcare
delivery networks and physician practices, including electronic claims
processing, referral submissions, eligibility verification and other electronic
transaction processing.
Per-Se markets its products and services primarily to integrated healthcare
delivery networks, hospitals, physician practices, long-term care facilities,
home health providers and managed care providers. Per-Se serves more than 18,000
physicians and 2,000 healthcare organizations. Per-Se processes more than 80
million healthcare claims annually and its solutions manage 20 million patient
lives online. Although our customers are predominantly in North America, we also
sell our software solutions internationally, both directly and through
distribution agreements.
USE OF PROCEEDS
Per-Se Technologies will not receive any proceeds from the sale of the
shares of common stock by the selling stockholder except as otherwise described
under "Plan of Distribution."
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SELLING STOCKHOLDER
The following table sets forth certain information about the selling
stockholder. The shares covered by this prospectus will be offered and sold by
the selling stockholder pursuant to an agreement with Donaldson, Lufkin &
Jenrette Securities Corporation or through other means. See "Plan of
Distribution."
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SHARES BENEFICIALLY SHARES OFFERED SHARES BENEFICIALLY PERCENTAGE OF
OWNED BEFORE PURSUANT TO OWNED AFTER SHARES OWNED
NAME THIS OFFERING THIS OFFERING THIS OFFERING(1)(2) AFTER THIS OFFERING
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Foundation Health
Systems, Inc. (f/k/a Health
Systems International)............ 6,200,000 4,500,000 0 0%
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(1) Assumes (i) that all of the shares of Per-Se Technologies common stock held
by the selling stockholder and being offered under this prospectus are sold
and (ii) that the selling stockholder acquires no additional shares of
Per-Se Technologies common stock prior to the completion of this offering.
(2) Upon receipt of net proceeds by the selling stockholder of $11.8 million,
any unsold shares shall be returned to Per-Se Technologies. See "Plan of
Distribution."
CERTAIN RELATIONSHIPS BETWEEN THE SELLING STOCKHOLDER AND PER-SE TECHNOLOGIES
Per-Se Technologies acquired Health Data Sciences Corporation on May 31,
1996 in a stock-for-stock merger transaction. The selling stockholder was a
stockholder in Health Data Sciences corporation when it was acquired by Per-Se
Technologies. In consideration for the settlement of various claims made by the
selling stockholder against Per-Se Technologies arising from that merger the
selling stockholder will receive a cash payment of $5.0 million from Per-Se
Technologies and acquired 6,200,000 shares of common stock of Per-Se
Technologies, of which 4,500,000 shares are covered by this prospectus. In
connection with that settlement, Per-Se Technologies agreed to take certain
actions necessary to register the resale of the shares covered by this
prospectus, including the preparation and filing of a registration statement
under the Securities Act of 1933 (of which this prospectus forms a part) and
paying expenses associated with the registration statement, this prospectus and
sale of the shares covered by this prospectus. In addition, the settlement
agreement provides that we will issue additional shares to the selling
stockholder as may be necessary for the selling stockholder to realize net
proceeds from the sale of the shares covered by this prospectus and any such
additional shares equal $11.8 million in the aggregate. If we are required to
issue any additional shares, we will be required to file an additional
registration statement covering the resale of those shares. Any additional
shares issued to the selling stockholder are expected to be distributed in
accordance with the Plan of Distribution set forth in this prospectus. See "Plan
of Distribution" for a description of other terms of our agreement with the
selling stockholder including limitations on its right to sell the shares and
circumstances under which the selling stockholder will be required to return
unsold shares to us.
PLAN OF DISTRIBUTION
Per-Se Technologies is registering the 4,500,000 shares on behalf of the
selling stockholder. All costs, expenses and fees in connection with the
registration of the shares offered hereby, estimated to be approximately
$52,000, will be borne by Per-Se Technologies, as well as all brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares. As and when we are required to amend or update this Prospectus, we may
incur additional expenses.
The selling stockholder and Per-Se Technologies entered into a settlement
agreement that places restrictions on the price and possibly the number of
shares that may be sold by the selling stockholder. During the first sixty days
following the date of this prospectus, the selling stockholder may not sell
shares at a gross sales price below $3 13/32nds per share without the consent of
Per-Se Technologies. If within sixty days after the date of this prospectus the
selling stockholder has not received net proceeds from the sale of shares in
excess of $8,500,000, the selling stockholder is free to sell shares at any
price and without
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consent from Per-Se Technologies. If within 120 days after the date of this
prospectus the selling stockholder has not received net proceeds from the sale
of shares equal to $11.8 million, the selling stockholder is free to sell shares
without any price restrictions or obligations to obtain consent. If the selling
stockholder receives total net proceeds from the sale of shares in excess of
$11.8 million, the selling stockholder must return to Per-Se Technologies any
proceeds received in excess of $11.8 million and any shares that have not been
sold. Also, if at anytime the selling stockholder receives a cash payment from
Per-Se Technologies (excluding the $5.0 million cash payment that will be paid
to the selling stockholder) that together with the proceeds from the sale of
shares equals $11.8 million, the selling stockholder shall not be permitted to
sell any additional shares and shall return any unsold shares to Per-Se
Technologies.
Sales of shares may be effected by the selling stockholder, or by pledgees,
donees, transferees or other successors in interest. Subject to the settlement
agreement between the selling stockholder and Per-Se Technologies, sales may be
made on one or more exchanges or in the over-the-counter market, or otherwise,
at prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The selling stockholder has entered
into a non-exclusive agreement with Donaldson, Lufkin & Jenrette Securities
Corporation to assist the selling stockholder in selling the shares in one or
more types of transactions. These transactions, whether with the assistance of
Donaldson, Lufkin & Jenrette or other brokers or dealers, may include: (a) block
trades in which the broker or dealer so engaged will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction, (b) purchases by a broker or dealer as principal and
resales by such broker or dealer or for its account pursuant to the Prospectus,
as supplemented, (c) exchange distributions in accordance with the rules of such
exchange, and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. Such broker-dealers may receive compensation in the
form of discounts, concessions, or commissions from the selling stockholder
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principal, or others (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling stockholder also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided they meet the criteria and conform to the requirements of such Rule,
rather than pursuant to this Prospectus, as supplemented. From time to time, the
selling stockholder may engage in short sales, short sales against the box, puts
and calls and other transactions in our securities or derivatives thereof, and
may sell and deliver the shares in connection therewith.
From time to time the selling stockholder may pledge its shares pursuant to
the margin provisions of its customer agreements with its brokers. Upon a
default by the selling stockholder, the broker may offer and sell the pledges
shares from time to time as described above.
The Securities and Exchange Commission takes the position that the selling
stockholder is, and any broker-dealer that acts in connection with the sale of
shares might be deemed to be, an "underwriter" within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by such
broker-dealers and any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under such Act. Per-Se Technologies has agreed to indemnify the selling
stockholder and Donaldson, Lufkin & Jenrette Securities Corporation against
certain liabilities, including liabilities arising under the Securities Act of
1933. The selling stockholder has agreed to indemnify DLJ against certain claims
insofar as such claims are based upon information relating to the selling
stockholder furnished in writing expressly for use in the registration statement
of which this prospectus is a part, and may agree to indemnify any other agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares against certain claims.
Because the Securities and Exchange Commission takes the position that the
selling stockholder is deemed to be an "underwriter" within the meaning of
Section 2(11) of the Securities Act of 1933, the selling stockholder will be
subject to the prospectus delivery requirements of such Act. Per-Se Technologies
has informed the selling stockholder that the anti-manipulative provisions of
Regulation M promulgated under the Securities Exchange Act of 1934 may apply to
its sales in the market.
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The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exception from the registration
or qualification requirement is available and is complied with.
LEGAL MATTERS
A legal opinion to the effect that the shares offered hereby by the selling
stockholder are validly issued, fully paid and non-assessable has been rendered
by Randolph L. M. Hutto, Esq., Atlanta, Georgia, Executive Vice President and
General Counsel of Per-Se Technologies.
EXPERTS
The consolidated financial statements of Per-Se Technologies, Inc.
incorporated in this prospectus by reference to the Annual Report on Form 10-K
of Per-Se Technologies, Inc. for the year ended December 31, 1998 have been so
incorporated in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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