Electronically Transmitted
to the Securities and Exchange Commission on December 14, 2000
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PROXYMED, INC.
(Exact name of Registrant as specified in its charter)
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Florida 65-0202059
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Michael K. Hoover
Chief Executive Officer
ProxyMed, Inc.
2555 Davie Road, Suite 110 2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317 Fort Lauderdale, Florida 33317
(954) 473-1001 (954) 473-1001
(Name, address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of registrant's principal executive offices) including area code, of agent of service)
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Copies of communications to:
Frank M. Puthoff, Esq. Steven Sonberg, Esq.
Executive Vice President and Holland & Knight LLP
Chief Legal Officer 701 Brickell Avenue
ProxyMed, Inc. Suite 3000
2555 Davie Road, Suite 110 Miami, Florida 33131
Fort Lauderdale, Florida 33317 (305) 374-8550
(954) 473-1001
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Approximate date of commencement of proposed sale to the public:
From time to time as described in the Prospectus after the effective date
of this Registration Statement.
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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 being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), 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. [ ]
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CALCULATION OF REGISTRATION FEE
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Amount To Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Be Offering Price Aggregate Offering Registration
Securities to be Registered Registered (1)(2) Per Share(3) Price(3) Fee
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Common Stock ($.001 par value) 47,910,565 $1.47 $70,428,531 $18,593.13
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(1) The number of shares of Common Stock offered pursuant to this Registration
Statement are as follows: (i) 1,000,000 shares, representing the number of
shares of Common Stock issuable upon the exercise of a warrant issued to
Commonwealth Associates, L.P ("Commonwealth") pursuant to an advisory agreement
dated May 8, 2000; plus (ii) 25,326,500 shares, representing the number of
shares of Common Stock issuable upon the conversion of our Series C 7%
Convertible Preferred Stock ("Series C Preferred Stock"), determined as if the
Series C Preferred Stock were converted in full at the conversion price of
$1.00; plus (iii) 12,155,000 shares, representing the number of shares of Common
Stock issuable upon the exercise of warrants issued to investors in a private
placement transaction in June 2000 of our 7% Convertible Senior Secured Notes,
which were converted to shares of our Series C Preferred Stock (the "Series C
Preferred Financing") (without regard to any limitations on exercise); plus (iv)
500,000 shares, representing the number of shares of Common Stock issuable upon
the exercise of warrants issued to our Chairman of the Board and Chief Executive
Officer in August 2000 (without regard to any limitations on exercise); plus (v)
1,000,000 shares, representing the number of shares of Common Stock issuable
upon the exercise of warrants issued to Commonwealth as placement agent in the
Series C Preferred Financing (without regard to any limitations on exercise);
plus (vi) 7,293,000 shares, representing the number of shares of Common Stock
issuable upon the exercise of warrants issued to Commonwealth as part of its
compensation as private placement agent in the Series C Preferred Financing
(without regard to any limitations on exercise), 3,967,634 of which shares
represent the number of shares of Common Stock issuable upon the exercise of
warrants transferred by Commonwealth to its affiliates; plus (vii) 200,000
shares, representing the number of share of Common Stock issued to our Chairman
of the Board and Chief Executive Officer pursuant to his employment agreement
dated July 27, 2000; plus (viii) 436,065 shares, representing the number of
shares of Common Stock issued to the holders of Series C Preferred Stock as
dividends for the quarter ended September 30, 2000.
(2) The registration statement also includes an indeterminate number of
additional shares of Common Stock that may become offered, issuable or sold to
prevent dilution resulting from stock splits, stock dividends and conversion
price or exercise price adjustments, which are included pursuant to Rule 416
under the Securities Act.
(3) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) of the Securities Act and based on the average of the high and
low bid price for the Common Stock on December 13, 2000 as reported by the
Nasdaq National Market System.
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 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 shareholders may not sell the securities offered by this Prospectus
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 soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 14, 2000
PROSPECTUS
Shares
[GRAPHIC OMITTED]
Common Stock
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This Prospectus relates to up to 47,910,565 shares of Common Stock of
ProxyMed, Inc. which may be sold from time to time by the selling shareholders
listed on page 11, or their transferees, pledgees, donees or successors. The
number of shares of Common Stock that we actually issue, and thus the number of
shares that may be sold hereunder, may be greater than 47,910,565 because of the
anti-dilution provisions contained in the Series C Preferred Stock and in
certain warrants described in this Prospectus.
The selling shareholders may sell all or any portion of their shares of
Common Stock in one or more transactions through ordinary brokerage
transactions, in private, negotiated transactions, or through any other means
described in the section entitled "Plan of Distribution" beginning on page 15.
The selling shareholders are selling these shares for their own
accounts. We will not receive any of the proceeds from the sale of the shares by
the selling shareholders, but will pay all registration expenses. The selling
shareholders will pay all selling expenses, including all underwriting discounts
and selling commissions.
Our Common Stock is traded on the Nasdaq National Market under the
symbol "PILL".
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INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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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.
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THE DATE OF THIS PROSPECTUS IS DECEMBER __, 2000
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TABLE OF CONTENTS
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Page
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WHERE YOU CAN FIND MORE INFORMATION 2
FORWARD-LOOKING INFORMATION 3
ABOUT PROXYMED 4
RISK FACTORS 5
USE OF PROCEEDS 11
SELLING SHAREHOLDERS 11
DESCRIPTION OF SECURITIES 15
PLAN OF DISTRIBUTION 19
LEGAL OPINION 20
EXPERTS 21
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document we file at the public reference facilities of the
SEC in Washington, D.C., Chicago, Illinois and New York, New York. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference into this Prospectus the following documents listed
below and any future filings that we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(1) Our Annual Report on Form 10-K for the year ended December 31,
1999 filed on March 24, 2000;
(2) Our Current Report on Form 8-K filed on May 8, 2000;
(3) Our Current Report on Form 8-K filed on May 9, 2000;
(4) Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2000 filed on May 15, 2000;
(5) Our Current Report on Form 8-K filed on May 19, 2000;
(5) Our Current Report on Form 8-K filed June 19, 2000;
(6) Our Quarterly Report on Form 10-Q for the quarter ended June
30, 2000 filed on August 14, 2000, as amended by our Quarterly
Report on Form 10-Q/A filed on August 31, 2000;
(7) Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000 filed on November 13, 2000;
(8) Our Definitive Proxy Statement filed on June 12, 2000; and
(9) The description of our Common Stock contained in our
Registration Statement on Form 8-A declared effective on
August 5, 1993, including any other amendment or report filed
for the purpose of updating such information.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
ProxyMed, Inc.
2555 Davie Road, Suite 110
Fort Lauderdale, Florida 33317
Attn: Corporate Secretary
Telephone: (954) 473-1001, ext. 300
You should rely only on information incorporated by reference or provided in
this Prospectus and any prospectus supplement. No one (including any salesman or
broker) is authorized to provide oral or written information about this offering
that is not included in this Prospectus.
FORWARD-LOOKING INFORMATION
This Prospectus, including the information incorporated by reference,
contains forward-looking statements made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Actual results could
differ materially from those projected in the forward-looking statements as a
result of the risk factors beginning on page 5 and others, certain of which may
be detailed from time to time in our periodic reports filed with the SEC.
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ABOUT PROXYMED
ProxyMed is an electronic healthcare transaction processing services
company providing connectivity services and related value-add products to
physicians, payers, pharmacies, medical laboratories, and other healthcare
providers and suppliers. Our electronic transaction processing services support
a broad range of both financial and clinical transactions. To facilitate these
services, we operate ProxyNet(R), our secure, proprietary national electronic
information network, which provides physicians and other primary care providers
with direct connectivity to one of the industry's largest list of payers, the
largest list of chain and independent pharmacies and the largest list of
clinical laboratories. Our products and services are provided from our three
operating facilities located in Fort Lauderdale, Florida; Santa Ana, California;
and New Albany, Indiana.
The healthcare industry generates billions of financial and clinical
transactions each year, including new prescription orders, refill
authorizations, laboratory orders and results, radiology orders and results,
medical insurance claims, insurance eligibility inquiries, encounter
notifications, and referral requests and authorizations. We believe that the
healthcare industry lags behind many other transaction-intensive industries,
such as the travel, securities and banking industries, in the number of
transactions processed electronically, with the vast majority of healthcare
transactions being performed manually and on paper. For physicians, payers, labs
and pharmacies to meet the financial and clinical demands of an evolving managed
care system, we believe that participants in the healthcare system will need to
process many of these types of transactions electronically. Due to the number of
participants, lack of standards and complexity of establishing reliable and
secure communication networks, the healthcare industry needs companies such as
ProxyMed, with its secure, proprietary systems, to facilitate the processing of
these transactions.
Sale of Network Engineering and Drug Dispensing Divisions
On March 31, 2000, we completed the sale of our network integration
division and our prescription drug dispensing subsidiary, ProxyCare, Inc., in
separate transactions valued at approximately $3.7 million.
* * *
Our principal executive offices are located at 2555 Davie Road, Suite
110, Fort Lauderdale, Florida 33317-7424, and our telephone number is (954)
473-1001.
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RISK FACTORS
In addition to the other information in this Prospectus or incorporated
in this Prospectus by reference, you should consider carefully the following
factors in evaluating ProxyMed and our business before purchasing the Common
Stock offered by this Prospectus.
We have incurred losses in the past and we expect losses in the future which
could have a detrimental effect on the market price of our stock
We have incurred substantial losses, including a loss of $35,644,000
for the nine months ended September 30, 2000, and losses of $21,856,000,
$11,788,000 and $18,517,000 for the fiscal years ended December 31, 1999, 1998
and 1997, respectively. As of September 30, 2000, we had an accumulated deficit
of $83,756,000. We expect to continue to incur substantial losses for the
foreseeable future. We can give no assurance that we will ever achieve
profitable operations. This could have a detrimental effect on the market price
of our stock.
We have important business relationships with other companies to market and sell
some of our clinical products and services which have not resulted in
significant sales yet and if these companies are unsuccessful, we will need to
add this emphasis internally, which may divert our efforts and resources from
others projects
For the marketing and sale of some of our clinical products and
services, we entered into important business relationships with other companies,
through our electronic commerce partner program with physician office management
information system vendors and electronic medical record vendors and through
other agreements. These important business relationships, which have required
and will continue to require significant commitments of effort and resources,
have yet to generate substantial recurring revenue, and we cannot assure that
they will ever generate substantial recurring revenue. Most of these
relationships are on a non-exclusive basis, and we cannot assure that our
electronic commerce partners and other strategic partners, most of whom have
significantly greater financial and marketing resources than we do, will not
develop and market products and services in competition with us in the future or
will not otherwise discontinue their relationship with us. Also, our
arrangements with some of our partners involve negotiated payments to the
partners based on percentages of revenues generated by the partners. If the
payments prove to be too high, we may be unable to realize acceptable margins,
but if the payments prove to be too low, the partners may not be motivated to
produce a sufficient volume of revenues. The success of our important business
relationships will depend in part upon our partners' own competitive, marketing
and strategic considerations, including the relative advantages of alternative
products being developed and marketed by such partners. If any such partners are
unsuccessful in marketing our products, we will need to place added emphasis on
these aspects of our business internally, which may divert our planned efforts
and resources from other projects.
We depend on connections to insurance companies and other payers, and if we lose
these connections, our service offerings would be limited and less desirable to
healthcare participants
Our business is enhanced by the substantial number of payers, such as
insurance companies, Medicare and Medicaid agencies, laboratories and
pharmacies, to which we have electronic connections. These connections may
either be made directly or through a clearinghouse. We have attempted to enter
into suitable contractual relationships to ensure long-term payer connectivity;
however, we cannot assure that we will be able to maintain our links with all
these payers. In addition, we cannot assure that we will be able to develop new
connections, either directly or through clearinghouses, on satisfactory terms.
Lastly, some third-party payers provide systems directly to healthcare
providers, bypassing us and other third-party processors. Our failure to
maintain existing connections with payers and clearinghouses or to develop new
connections as circumstances warrant, or an increase in the utilization of
direct links between providers and payers, could cause our electronic
transaction processing system to be less desirable to healthcare participants,
which would slow down or reduce the number of transactions that we process and
for which we are paid.
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Evolving industry standards and rapid technological changes could result in our
products becoming obsolete or no longer in demand
Rapidly changing technology, evolving industry standards and the
frequent introduction of new and enhanced internet-based services characterize
the market for our products and services. Our success will depend upon our
ability to enhance our existing services, introduce new products and services on
a timely and cost-effective basis to meet evolving customer requirements,
achieve market acceptance for new products or services and respond to emerging
industry standards and other technological changes. We cannot assure that we
will be able to respond effectively to technological changes or new industry
standards. Moreover, we cannot assure that other companies will not develop
competitive products or services, or that any such competitive products or
services will not cause our products and services to become obsolete or no
longer in demand.
The acceptance of electronic transaction processing in the healthcare industry
is still in its early stages; thus, the future of our business, including our
new internet-based applications, is uncertain
Our strategy anticipates that electronic processing of healthcare
transactions, including transactions involving clinical as well as financial
information, will become more widespread and that providers and third-party
payers increasingly will use electronic transaction processing networks for the
processing and transmission of data. Electronic transmission of healthcare
transactions (and, in particular, the use of the internet to transmit them) is
still developing, and complexities in the nature and types of transactions which
must be processed have hindered, to some degree, the development and acceptance
of electronic transaction processing in this industry. We cannot assure that
continued conversion from paper-based transaction processing to electronic
transaction processing in the healthcare industry, using proprietary physician
management systems or the internet, will occur. The internet may prove not to be
a viable commercial marketplace for a number of reasons, including:
o inadequate development of the necessary
infrastructure for communication speed, access and
server reliability,
o security, privacy and confidentiality concerns,
o lack of development of complementary products, such
as high-speed modems and high-speed communication
lines,
o implementation of competing technologies,
o delays in the development or adoption of new
standards and protocols required to handle increased
levels of internet activity, and
o possible governmental regulation.
Growth in the demand for our new internet applications and services
depends on the adoption of internet solutions by healthcare participants, which
requires the acceptance of a new way of conducting business and exchanging
information. The healthcare industry, in particular, relies on legacy systems
that may be unable to benefit from our new internet-based platform. Customers
using legacy and client-server systems may refuse to adopt our new
internet-based systems when they have made a substantial investment in hardware,
software and training for older systems.
If electronic transaction processing penetrates the healthcare industry, we may
face pressure to reduce our prices which potentially may lead to further losses
If electronic transaction processing extensively penetrates the
healthcare market or becomes highly standardized, it is possible that
competition among electronic transaction processors will focus increasingly on
pricing. This competition may put intense pressure on us to reduce our pricing
in order to
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retain market share. If we are unable to reduce our costs sufficiently to offset
declines in our prices, or if we are unable to introduce new, innovative service
offerings with higher prices, we will continue to incur net losses.
Proposed healthcare legislation and changes to existing laws could cause an
erosion of our current competitive strengths
Our customers are subject to extensive and frequently changing federal
and state healthcare laws and regulations. Political, economic and regulatory
influences are subjecting the healthcare industry in the United States to
fundamental change. Potential reform legislation may include:
o mandated basic healthcare benefits,
o controls on healthcare spending through limitations
on the growth of private health insurance premiums
and Medicare and Medicaid reimbursement,
o the creation of large insurance purchasing groups,
o fundamental changes to the healthcare delivery
system, o FTC enforcement actions of existing privacy
laws relating to the internet,
o federal and state privacy and confidentiality
statutes, regulations and rules covering medical
records and patient information
The federal Health Insurance Portability and Accountability Act of
1996, known as HIPAA for short, mandates the use of standard transactions,
standard identifiers, security and other provisions for electronic claims
transactions. HIPAA specifically designates clearinghouses (including us and
other financial network operators) as the compliance facilitators for healthcare
providers and payers. On August 17, 2000, the U.S. Department of Health and
Human Services published final regulations to govern eight of the most common
electronic transactions involving health information. We must comply by October
16, 2002. We believe that we will be in compliance by that date or sooner, and
we expect, but have no assurances that our business partners or customers who
may also be covered by these regulations will also be in compliance by that
date. Due to mandated standards, however, there is a possibility that it will be
easier for competitors to offer electronic transaction processing services
similar to ours, which would make our competitive strength of accepting
financial transactions in multiple formats less of a differentiating factor for
our customers.
We anticipate Congress and state legislatures will continue to review
and assess alternative healthcare delivery systems and payment methods, as well
as internet and healthcare privacy legislation, and that public debate of these
issues will likely continue in the future. Due to uncertainties as to these
reform initiatives and their enactment and implementation, we cannot predict
which, if any, of such reform proposals will be adopted, when they may be
adopted or what impact they may have on us.
Because we are smaller and have fewer financial resources than many of our
competitors, we may not be able to successfully compete in the very competitive
healthcare electronic transaction processing industry
We face competition from many healthcare information systems companies
and other technology companies. Many of our competitors are significantly larger
and have greater financial resources than we do and have established reputations
for success in implementing healthcare electronic transaction processing
systems. Other companies have targeted this industry for growth, including the
development of new technologies utilizing internet-based systems. We cannot
assure that we will be able to compete successfully with these companies or that
these or other competitors will not commercialize products, services or
technologies that render our products, services or technologies obsolete or less
marketable.
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Our clinical transaction products and services have yet to be tested on a large
scale and could fail under a heavy customer load
The quality of our clinical transaction products and services is
important to our business. Although we have completed the development of most of
our clinical transaction products and services and our electronic transaction
processing network, which we believe efficiently perform the principal functions
for which they have been designed, our clinical transaction products and
services and the network are currently being utilized only by a limited number
of customers for these transactions. We cannot assure that, upon widespread
commercial use of our clinical transaction products and services, they will
satisfactorily perform all of the functions for which we have designed them or
that unanticipated technical or other errors will not occur which would result
in increased costs or material delays. Any of these errors could delay our
plans, result in harmful publicity or cause us to incur substantial remedial
costs.
Computer network systems like ours could suffer security and privacy breaches
that could harm our customers and us
We currently operate servers and maintain connectivity from multiple
facilities. Despite our implementation of network security measures, such as
limiting physical and network access to routers, our infrastructure may be
vulnerable to computer viruses, break-ins and similar disruptive problems caused
by customers or other users. Computer viruses, break-ins or other security
problems could lead to interruption, delays or cessation in service to our
customers. These problems could also potentially jeopardize the security of
confidential information stored in the computer systems of our customers, which
may deter potential customers from doing business with us and give rise to
possible liability to users whose security or privacy has been infringed. The
security and privacy concerns of existing and potential customers may inhibit
the growth of the healthcare information services industry in general, and our
customer base and business in particular. A significant security breach could
result in loss of customers, damage to our reputation, direct damages, costs of
repair and detection and other unplanned expenses.
We depend on uninterrupted computer access for our customers; any prolonged
interruptions in our operations could cause our customers to seek alternative
providers of our services
Our success is dependent on our ability to deliver high-quality,
uninterrupted computer networking and hosting, requiring us to protect our
computer equipment and the information stored in servers against damage by fire,
natural disaster, power loss, telecommunications failures, unauthorized
intrusion and other catastrophic events. Although we plan to develop back-up
site capability and have a program to manage technology to reduce risks in the
event of a disaster, including periodic "back-ups" of our computer programs and
data, any damage or failure resulting in prolonged interruptions in our
operations could cause our customers to seek alternative providers of our
services. In particular, a system failure, if prolonged, could result in reduced
revenues, loss of customers and damage to our reputation, any of which could
cause our business to suffer. While we carry property and business interruption
insurance to cover operations, the coverage may not be adequate to compensate us
for losses that may occur.
Our products employ proprietary information and technology which may infringe on
the intellectual property rights of third parties
In large part, our success is dependent on our proprietary information
and technology. We rely on a combination of contract, copyright, trademark and
trade secret laws and other measures to protect our proprietary information and
technology. We have federal trademark registrations for ClinScan, PreScribe,
ProxyNet, ProxyScript and RxReceive and have filed a trademark application for
"empowering physicians with eSolutions", which is currently pending approval. We
have no patents. We have copyright registrations for twelve of our software
products. As part of our confidentiality procedures, we generally enter into
nondisclosure agreements with our employees, distributors and customers, and
limit access to and distribution of our software, databases, documentation and
other proprietary information. We cannot assure that the steps taken by us will
be adequate to deter misappropriation of our proprietary rights or that third
parties will not independently develop substantially similar products, services
and technology. Although we believe our products, services and technology do not
infringe on any proprietary rights of
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others, as the number of software products available in the market increases and
the functions of those products further overlap, we and other software and
internet developers may become increasingly subject to infringement claims.
These claims, with or without merit, could result in costly litigation or might
require us to enter into royalty or licensing agreements, which may not be
available on terms acceptable to us.
Because an error by any party in the process of prescribing drugs and filling
prescriptions could result in substantial injury to a patient, our liability
insurance may not be adequate in a catastrophic situation
Our business exposes us to potential liability risks that are
unavoidably part of being in the healthcare electronic transaction processing
industry. Many of our products and services relate to prescribing drugs and
filling pharmacy and medical laboratory results, and an error by any party in
the process could result in substantial injury to a patient. As a result, our
liability risks are significant. We cannot assure that our insurance will be
sufficient to cover potential claims arising out of our current or proposed
operations, or that our present level of coverage will be available in the
future at a reasonable cost. A partially or completely uninsured claim against
us, if successful and of sufficient magnitude, would have significant adverse
financial consequences. Our inability to obtain insurance of the type and in the
amounts we require could generally impair our ability to market our products and
services.
We may not be able to retain key personnel or replace them if they leave
Our success is largely dependent on the personal efforts of Michael K.
Hoover, our Chairman of the Board and Chief Executive Officer. Although we have
entered into employment agreements with Mr. Hoover and other senior executives,
the loss of any of their services could cause our business to suffer. We have
obtained for our benefit "key person" insurance on the life of Mr. Hoover in the
amount of $1,000,000. Our success is also dependent upon our ability to hire and
retain qualified operations, development and other personnel. Competition for
qualified personnel in the healthcare information services industry is intense,
and we cannot assure that we will be able to hire or retain the personnel
necessary for our planned operations.
Our corporate charter contains authorized, unissued preferred stock which, if
issues, may inhibit a takeover at a premium price that may be beneficial to our
shareholders
Our Articles of Incorporation authorize the issuance of 2,000,000
shares of "blank check" preferred stock with such designations, rights and
preferences as our Board of Directors may determine from time to time. Of these
preferred shares, 253,375 shares are outstanding as of the date of this
Prospectus. Without shareholder approval, our Board of Directors is empowered to
issue shares of our preferred stock with dividend, liquidation, conversion,
voting and other rights that could lessen the value, voting power or other
rights of holders of Common Stock. Issuance of shares of our preferred stock
could be utilized, under some circumstances, as a method of discouraging,
delaying or preventing a change of control of this company at a premium price
which would be beneficial to our shareholders.
Investors should not anticipate receiving cash dividends on our Common Stock
We currently anticipate retaining all of our future earnings, if any,
for use in the operation and expansion of our business, and do not plan to pay
any cash dividends on shares of our Common Stock in the foreseeable future. The
provisions of our Series B Preferred Stock prohibit the payment of dividends on
our Common Stock unless we get the consent of the holders of two-thirds of the
Series B Preferred Stock. Potential investors who anticipate a need for
dividends should not invest in the Common Stock.
Our Common Stock price has fluctuated considerably and may not appreciate in
value
The market price of shares of our Common Stock has fluctuated
substantially in recent years and is likely to fluctuate significantly from its
current level. During the period from January 1, 2000 through December 12, 2000,
our Common Stock closing price has ranged from a high of $11.13 per share to a
low of $0.81 per share. In 1998, our Common Stock closing price ranged from a
low of $5.25 per share to a
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high of $17.13 per share, and during 1999, our Common Stock closing price ranged
from a low of $9.50 per share to a high of $19.25 per share. Future
announcements concerning our financial performance, conversion of shares of the
Series C Preferred Stock into Common Stock, warrant and option exercises,
year-end selling for tax losses, the announcement of strategic business
relationships, the introduction of new products, services or technologies or
changes in product pricing policies by us or our competitors or changes in
earnings estimates by analysts, among other factors, could cause the market
price of our Common Stock to fluctuate substantially. Stock markets have
experienced extreme price and volume volatility in the last year. This
volatility has had a substantial effect on the market prices of securities of
many public companies, including those in the eHealth sector, for reasons
frequently unrelated to the operating performance of the specific companies.
These broad market fluctuations may also cause declines in the market price of
our Common Stock. Investors seeking short-term liquidity should be aware that we
cannot assure that the stock price will appreciate in value or, as noted above,
that cash dividends will be paid.
We may issue additional shares which could adversely affect the market price of
our Common Stock
Certain events over which you have no control could result in the
issuance of additional shares of our Common Stock or preferred stock, which
would dilute your ownership percentage in ProxyMed and could adversely affect
the market price of our Common Stock. We may issue additional shares of Common
Stock or preferred stock for many reasons including:
o to raise additional capital or finance acquisitions;
o upon the exercise or conversion of outstanding
options, warrants and shares of convertible preferred
stock; or
o in lieu of cash payment of dividends.
The conversion ratio for the Series B Preferred Stock is tied to the
trading price of our Common Stock. Consequently, the number of shares of Common
Stock issuable upon conversion of the Series B Preferred Stock may increase
substantially if the trading price of our Common Stock declines. In addition,
the number of shares of Common Stock that we are required to issue upon
conversion or exercise, as the case may be, of Series B Preferred Stock, Series
C Preferred Stock and many of our outstanding options and warrants may increase
if certain anti-dilution events occur (such as, certain issuances of Common
Stock, options and convertible securities).
As of December 12, 2000, there were 253,265 shares of Series C
Preferred Stock outstanding convertible into 25,326,500 shares of Common Stock,
110 shares of Series B Preferred Stock outstanding and convertible into 121,002
shares of Common Stock, and warrants and options to acquire up to approximately
36,768,900 additional shares of Common Stock at prices ranging from $1.00 to
$14.50 per share. Conversion of shares of Series C Preferred Stock or Series B
Preferred Stock into Common Stock, the exercise of warrants and options to
acquire shares of Common Stock, or the sale by existing shareholders of a large
number of shares of Common Stock, could depress the market price of our Common
Stock and dilute the value of your shares.
We may be required to delist our shares from Nasdaq if certain events occur
The Nasdaq Stock Market has certain rules that must be met in order for
a listed company to maintain its listing on the National Market System. We may
be required to delist from Nasdaq if the bid price of our Common Stock closes
below one dollar ($1.00) for thirty consecutive trading days. In such event,
trading, if any, in the Common Stock may then continue to be conducted on the
over-the-counter market in what are commonly referred to as the "pink sheets",
or on the OTC Electronic Bulletin Board. As a result of trading in the
over-the-counter market, an investor may find it more difficult to dispose of,
or to obtain accurate quotations as to the market value of, the Common Stock. In
addition, trading in the Common Stock would likely decrease substantially, and
the price of the Common Stock may decline.
10
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of Common
Stock by any of the selling shareholders.
We will receive in the aggregate proceeds of $22,448,000 if all of the
warrants relating to the Series C Preferred Stock (including warrants issued to
Commonwealth, which served as placement agent in connection with the offering of
Series C Preferred Stock) are exercised for cash. We intend to use any proceeds
received from the exercise of these warrants for general working capital
purposes.
We estimate that our expenses in connection with the filing of this
registration statement will be approximately $38,000.
SELLING SHAREHOLDERS
General
The shares of Common Stock being offered by the selling shareholders
are issuable (1) upon conversion of the Series C Preferred Stock, (2) as
dividends on the Series C Preferred Stock, or (3) upon exercise of warrants. For
additional information about the Series C Preferred Stock, see "Description of
Securities - Series C Preferred Stock". We are registering the shares in order
to permit the selling shareholders to offer these shares for resale from time to
time. None of the selling shareholders has had any material relationship with us
within the past three years except for Commonwealth, which has acted as both
underwriter and placement agent in previous private placements of our equity and
debt securities. Common shares after offering include shares of common stock,
stock options and warrants owned prior to any securities being offered under
this Prospectus.
<TABLE>
<CAPTION>
Common Shares Common Shares
Beneficially Offered Common
Owned Prior By This Shares After Percentage
Name of Selling Shareholder to Offering Prospectus Offering of Class
--------------------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Abrams VII Partnership 607,038 607,038 0 0.0%
Adam M. Rosmarin 113,819 113,819 0 0.0%
Alexander G. Rappaport 151,759 151,759 0 0.0%
Allan MacDonald & Eileen MacDonald, as 75,879 75,879 0 0.0%
Joint Tenants
Allen Notowitz 151,759 151,759 0 0.0%
Alvaro Tafur 75,879 75,879 0 0.0%
Alya Al Bahar & Lulwa Al Khaled, as Joint 75,879 75,879 0 0.0%
Tenants
Anderson Wire Works, Inc. 151,759 151,759 0 0.0%
Andre W. Iseli 75,879 75,879 0 0.0%
Anne Falk (1) 22,021 22,021 0 0.0%
Anthony Giardina (1) 18,637 18,400 237 *
Barry A. Kaplan 758,797 758,797 0 0.0%
Barry Gray 151,759 151,759 0 0.0%
Basil J. Asciutto 52,925 51,975 950 *
Ben Rosenbloom 75,879 75,879 0 0.0%
Beth Lipman (1) 34,251 28,498 5,753 *
Brian Coventry (1) 24,018 24,018 0 0.0%
Bruce Glaser (1) 157,176 107,176 50,000 *
Bryon Voigt & Jacelyn Voigt, as Joint 75,879 75,879 0 0.0%
Tenants
C. Wyllys Cass, IV & Ellen M. Cass, as Joint 75,879 75,879 0 0.0%
Tenants
Capital Ventures International 2,124,833 2,124,833 0 0.0%
Carl Kleidman (1) 230,004 230,004 0 0.0%
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Common Shares Common Shares
Beneficially Offered Common
Owned Prior By This Shares After Percentage
Name of Selling Shareholder to Offering Prospectus Offering of Class
--------------------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Carol R. Hill Spousal Trust (dated 12/22/99) 758,797 758,797 0 0.0%
Charles A. Barnes, Jr. Revocable Living 75,879 75,879 0 0.0%
Trust (dated 11/7/91)
Charles L. Wisseman, III 75,879 75,879 0 0.0%
Christopher Fox 228,639 227,639 1,000 *
Commonwealth Associates, LP (2) 5,645,553 5,325,366 1,320,187 *
ComVest Capital Partners, LLC (2) 227,639 227,639 0 0.0%
Constantine S. Potamianos (1) 16,787 16,787 0 0.0%
Conzett Europa Invest, Ltd. 327,639 227,639 100,000 *
Craig Blitz (1) 32,545 25,545 7,000 *
Cranshire Capital, LP 455,278 455,278 0 0.0%
CRM Madison Partners, LP (5) 535,270 524,270 11,000 *
CRM Micro Cap Fund, LP (5) 471,154 471,154 0 0.0%
CRM Partners, LP (5) 1,435,925 1,405,675 30,250 *
CRM Retirement Partners, LP (5) 758,116 737,033 21,083 *
CRM US Value Fund Ltd. (5) 115,852 114,019 1,833 *
Daniel S. Och 455,278 455,278 0 0.0%
David B. Heller 151,759 151,759 0 0.0%
David Dercher & Su Ellen Dercher, as Joint 75,879 75,879 0 0.0%
Tenants
David L. Cohen 227,639 227,639 0 0.0%
David P. Faxon, Jr. 75,879 75,879 0 0.0%
David R. Nelson & Donna L. Nelson, as Joint 75,879 75,879 0 0.0%
Tenants
David Stellway 75,879 75,879 0 0.0%
Domenic M. Strazzulla 75,879 75,879 0 0.0%
Domenick & Josephine Scaglione, as Joint 75,879 75,879 0 0.0%
Tenants
Dominick Di Cesare 75,879 75,879 0 0.0%
Donald G. Drapkin (3) 551,759 151,759 400,000 *
Douglas & Evelyn Runckel, as Joint Tenants 75,879 75879 0 0.0%
Duane M. Fiedler 75,879 75,879 0 0.0%
E&M RP Trust (dated 10/3/85) 1,518,895 1,518,895 0 0.0%
Edward J. Rosenthal Profit Sharing Plan 79,546 75,879 3,667 *
(dated 1989)
Edwin M. Cooperman (1) (3) 18,400 9,200 9,200 *
Elite Sales, Inc. 75,879 75,879 0 0.0%
Eric Erdman 75,879 75,879 0 0.0%
Flynn Corporation 313,019 303,519 9,500 *
FM Grandchildren Trust (dated 7/18/96) 113,819 113,819 0 0.0%
Fotyfo Associates, LP 113,819 113,819 0 0.0%
Frederick B. Epstein 75,879 75,879 0 0.0%
Fren Manocherian 75,879 75,879 0 0.0%
Garo A. Partoyan 77,879 75,879 2,000 *
Gary D. Schultz & Barbara A. Schultz, as 75,879 75,879 0 0.0%
Joint Tenants
Gary Kanuit & Bradford Burns, as Tenants in 75,879 75,879 0 0.0%
Common
Gerald & Daphna Cramer 1997 Charitable 393,565 379,398 14,167 *
Remainder Unitrust (dated 11/1/97) (5)
Gerald Cramer 1997 Charitable Remainder 393,565 379,398 14,167 *
Unitrust (dated 11/1/97) (5)
Gregg R. Goebel & Marilyn B. Goebel, as 75,879 75,879 0 0.0%
Joint Tenants
H.D. Haley 113,819 113,819 0 0.0%
Hans Bodmer 151,759 151,759 0 0.0%
Hardy Family Limited Partnership (4) 455,278 455,278 0 0.0%
Harvard Developments, Inc. 75,879 75,879 0 0.0%
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Common Shares Common Shares
Beneficially Offered Common
Owned Prior By This Shares After Percentage
Name of Selling Shareholder to Offering Prospectus Offering of Class
--------------------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Harvard Investments, Inc. 379,398 379,398 0 0.0%
Herman Sandler 227,639 227,639 0 0.0%
Howard Gittis 151,759 151,759 0 0.0%
Howard Rosenbloom 75,879 75,879 0 0.0%
Inder Tallur (1) 140,001 138,001 2,000 *
Ingleside Company 1,533,671 1,533,671 0 0.0%
Inter Family Investments Co., Inc. 75,879 75,879 0 0.0%
Intercontinental Investment Services, Inc. 75,879 75,879 0 0.0%
Jacob Goldfield 1,062,416 1,062,416 0 0.0%
James Nealis 75,879 75,879 0 0.0%
Jerome Dreyfuss 75,879 75,879 0 0.0%
Jerome Messana (1) 41,228 41,048 180 *
Jesse N. Polan 151,759 151,759 0 0.0%
Jody Nelson 75,879 75,879 0 0.0%
John A. Martell 303,519 303,519 0 0.0%
Jon Brown 75,879 75,879 0 0.0%
Jonathan L. Glashow 113,819 113,819 0 0.0%
Joseph P. Rienzi & Judith A. Rienzi, as Joint 113,819 113,819 0 0.0%
Tenants
Joseph P. Wynne (1) 78,455 76,588 1,867 *
Just in Case, LRD 75,879 75,879 0 0.0%
Kanodia Partners, LP 151,759 151,759 0 0.0%
Keith M. Rosenbloom (1) 271,529 254,217 17,312 *
Kenneth B. Wilson 75,879 75,879 0 0.0%
Kerry B. Skeen Revocable Trust U/T (dated 75,879 75,879 0 0.0%
4/14/99)
Kim M. Schwencke 151,759 151,759 0 0.0%
Kurt V. & Laura M. Reichelt, as Joint Tenants 75,879 75,879 0 0.0%
Laurel Lester Mark 75,879 75,879 0 0.0%
Lawrence W. McGary 75,879 75,879 0 0.0%
Leo F. Mazzocchi, M.D. & Nancy T. Mazzocchi, 75,879 75,879 0 0.0%
as Joint Tenants
Leroy Cramer Family Limited Partnership 151,759 151,759 0 0.0%
Mark Reichenbaum 303,519 303,519 0 0.0%
Michael & Mona Barsa, as Joint Tenants with 75,879 75,879 0 0.0%
Right of Survivorship
Michael Applebaum (1) 63,012 63,012 0 0.0%
Michael Bollag Charitable Remainder Unitrust 252,157 227,639 24,518 *
(dated 1/7/92)
Michael K. Hoover (6) 6,864,415 1,708,415 5,156,000 7.0%
Michael S. Falk (1) (2) 2,474,245 2,331,904 142,341 *
Neal Holtvogt 75,879 75,879 0 0.0%
Pamela Equities Corporation 113,819 113,819 0 0.0%
Paul F. Petrus 75,879 75,879 0 0.0%
Paul O. Goldenheim 77,879 75,879 2,000 *
Paul Russo 75,879 75,879 0 0.0%
Peggy Jordan 151,759 151,759 0 0.0%
Perg Proxy, LLC 1,403,875 1,403,875 0 0.0%
Peter Latour (1) 131,391 131,391 0 0.0%
Peter Palmieri (1) 34,330 34,060 270 *
Philip R. Ladouceur (1) 9,200 9,200 0 0.0%
Porter Partners, LP 303,519 303,519 0 0.0%
Reese-Cole Partnership, Ltd. 151,759 151,759 0 0.0%
Richard Campanella (1) 18,637 18,400 237 *
Richard Rosenblatt (1) 11,033 9,200 1,833 *
Richard Yalen (1) 9,200 9,200 0 0.0%
RMC Capital, LLC 3,798,089 3,798,089 0 0.0%
RML Burwick Family, LP 151,759 151,759 0 0.0%
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Common Shares Common Shares
Beneficially Offered Common
Owned Prior By This Shares After Percentage
Name of Selling Shareholder to Offering Prospectus Offering of Class
--------------------------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Robert & Lois Silverman, as Joint Tenants 75,879 75,879 0 0.0%
Robert Hazan 75,879 75,879 0 0.0%
Robert Hoffman & Randy Weatherford, Tenants 75,879 75,879 0 0.0%
in Common
Robert J. Spencer 75,879 75,879 0 0.0%
Robert O'Sullivan (1) 291,339 278,434 12,905 *
Robert P. Kouwe 151,759 151,759 0 0.0%
Ron & Rosemarie Moschetta, as Joint Tenants 15,175 15,175 0 0.0%
Ron Bloom (1) 23,000 23,000 0 0.0%
Ronald B. Booth 75,879 75,879 0 0.0%
Ronald Moschetta (1) 111,377 111,377 0 0.0%
Rovest Partnership 75,879 75,879 0 0.0%
Rush and Co. 75,879 75,879 0 0.0%
Salvatore A. Trupiano 75,879 75,879 0 0.0%
Samuel R. Nussbaum 75,879 75,879 0 0.0%
Sanjiv Patel & Shanthamallappa Ashok, as 75,879 75,879 0 0.0%
Tenants in Common
Scott Greiper (1) 46,000 46,000 0 0.0%
Scott S. Prince 151,759 151,759 0 0.0%
Seymour Wasserstrum 75,879 75,879 0 0.0%
Siam Partners II 1,518,895 1,518,895 0 0.0%
Stephen T. Skoly & Richard K. Ouellette, as 76,879 75,879 1,000 *
Tenants in Common
Susan Hoffman (1) 6,000 5,000 1,000 *
Sybesma Research, LLC 75,879 75,879 0 0.0%
Tahoe Partnership 1,518,895 1,518,895 0 0.0%
TGAAR Properties, Inc. 75,879 75,879 0 0.0%
The Aubrey J. Ferrao Living Trust U/A/D 6/26/98 151,759 151,759 0 0.0%
Thom Waye (1) 53,587 53,587 0 0.0%
Thomas Boova 75,879 75,879 0 0.0%
Thomas Israel 151,759 151,759 0 0.0%
Thomas J. Brigl & Brenda Brigl, as Joint 75,879 75,879 0 0.0%
Tenants
Thomas J. Keeney 75,879 75,879 0 0.0%
Thomas R. Kelley 76,179 75,879 300 *
Travis L. Provow 75,879 75,879 0 0.0%
Virginia R. Nelson Trust (1/10/87) 75,879 75,879 0 0.0%
Vladik Vainberg (1) 20,783 20,436 347 *
Walter F. Toombs 151,759 151,759 0 0.0%
Wexford Clearing Services C/F Charles F.A. 75,879 75,879 0 0.0%
Schroeder IRA
Wexford Clearing Services C/F Rodney 151,759 151,759 0 0.0%
Schorlemmer SEP DTD 10/20/99
Wexford Clearing Services Corp. C/F FBO 75,879 75,879 0 0.0%
Thomas G. Keough IRA
Wexford Clearing Services Corp. C/F Janis 7,587 7,587 0 0.0%
Campanella IRA
William & Linda O'Neill, as Joint Tenants 151,759 151,759 0 0.0%
William Anthony Rice 227,639 227,639 0 0.0%
William Kress Schapiro 151,759 151,759 0 0.0%
William T. McCaffrey 151,759 151,759 0 0.0%
Wingate Investments, Ltd. 303,519 303,519 0 0.0%
ZWD Investments, LLC 1,520,295 1,520,295 0 0.0%
</TABLE>
*Less than 1%
------------------
(1) Includes warrants assigned by Commonwealth Associates as part of its
compensation as private placement agent in the Series C Preferred
Financing.
14
<PAGE>
(2) Michael W. Falk is a director of ProxyMed, Inc. and the principal owner
of the general partner of Commonwealth Associates, LP and ComVest
Capital Partners, LLC. Based on information available at the time of
this filing, common shares owned beneficially prior to offering include
a total of 185,166 shares of common stock and 277,362 warrants owned by
the group of Mr. Falk, Commonwealth and ComVest. For purposes of this
Prospectus, the combined percentage of class for Mr. Falk's holdings is
approximately 11.2%.
(3) Donald G. Drapkin and Edwin M. Cooperman are directors of ProxyMed,
Inc.
(4) Common shares beneficially owned prior to offering excludes 240,950
common shares and 442,000 stock options owned directly by A. Thomas
Hardy, President of Key Communications Service, Inc., our wholly-owned
subsidiary.
(5) Based on information available at the time of this filing, common
shares beneficially owned prior to offering excludes 254,000 shares of
common stock and 200,000 stock options owned directly by Gerald B.
Cramer, a director of ProxyMed, Inc. Mr. Cramer has an ownership
interest in CRM Madison Partners, LP; CRM Micro Cap Fund, LP; CRM
Partners, LP; CRM Retirement Partners, LP; and CRM US Value Fund, LP.
For purposes of this Prospectus, the combined percentage of class for
all of Mr. Cramer's holdings are less than 1%.
(6) Common shares beneficially owned prior to offering includes 135,000
shares of common stock owned directly by Michael K. Hoover, our
Chairman of the Board and Chief Executive Officer.
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 100,000,000 shares of Common
Stock, par value $.001 per share, and 2,000,000 shares of preferred stock, par
value $.01 per share. At December 12, 2000, 20,593,480 shares of Common Stock
were issued and outstanding, 110 shares of Series B Preferred Stock were issued
and outstanding and 253,265 shares of Series C Preferred Stock were issued and
outstanding.
Of the 20,593,480 shares of Common Stock outstanding on December 12,
2000, this amount does not include the 121,002 shares of Common Stock issuable
upon conversion of Series B Preferred Stock, the 25,326,500 shares of Common
Stock issuable upon conversion of the Series C Preferred Stock, the 25,527,007
shares of Common Stock issuable upon exercise of currently outstanding warrants,
and 11,241,869 shares of Common Stock reserved for issuance upon exercise of
currently outstanding stock options.
The descriptions below of the terms of Common Stock, Series B Preferred
Stock, Series C Preferred Stock and the related warrants are summaries of the
material terms only and do not purport to be complete. Such descriptions are
subject to and qualified by the actual agreements relating to Series B Preferred
Stock, Series C Preferred Stock, such warrants, our amended Articles of
Incorporation and By-laws, all of which have been filed with the SEC and are
incorporated into this Prospectus by reference, and by applicable law.
Common Stock
The issued and outstanding shares of Common Stock are, and the shares
being offered by this Prospectus will be, validly issued, fully paid and
non-assessable. The holders of outstanding shares of Common Stock are entitled
to receive dividends out of assets legally available for them at such times and
in such amounts as the Board of Directors may from time to time determine. We
have not paid any dividends and do not expect to pay cash dividends on our
Common Stock in the foreseeable future.
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, have one vote per share in all matters to be voted upon
by the shareholders. Cumulative voting in the election of directors is not
allowed, which means that the holders of more than 50% of the outstanding shares
can elect all the directors if they choose to do so and, in such event, the
holders of the remaining shares will not be able to elect any directors.
15
<PAGE>
The shares have no preemptive, subscription, conversion or redemption
rights. Upon liquidation, dissolution or winding-up of ProxyMed, the holders of
Common Stock are entitled to receive pro rata the assets of ProxyMed which are
legally available for distribution to shareholders.
Preferred Stock
In addition to Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock, our Board of Directors has the authority to issue
1,746,625 additional shares of preferred stock in one or more series and to fix
the designation, relative powers, preferences and rights and qualifications,
limitations or restrictions of all shares of each such series, including
dividend rates, conversion rights, voting rights, redemption and sinking fund
provisions, liquidation preferences and the number of shares constituting each
such series, without any further vote or action by the shareholders.
The issuance of preferred stock could decrease the amount of earnings
and assets available for distribution to holders of Common Stock or adversely
affect the rights and powers, including voting rights, of the holders of Common
Stock and could have the effect of delaying, deferring or preventing a change in
control of ProxyMed without further action by the shareholders.
Series B Preferred Stock
Pursuant to the terms of a Securities Purchase Agreement dated December
23, 1999, we issued 15,000 shares of Series B Preferred Stock in a private
placement to institutional investors. The shares of Series B Preferred Stock are
non-voting and carry a cumulative dividend at a rate of 6% per annum, payable
quarterly or upon conversion or redemption, which may be paid in cash or Common
Stock, at our option, subject to certain conditions. The shares of Series B
Preferred Stock mature on December 23, 2001, subject to extension in certain
circumstances, at which time the Series B Preferred Stock will be redeemed or
converted at our option, subject to certain conditions. The conversion price of
Series B Preferred Stock at maturity is 95% of the average of the closing trade
price on the Nasdaq National Market of the Common Stock for the 30 consecutive
trading days immediately preceding December 23, 2001.
In connection with the sale of Series B Preferred Stock, we issued
warrants (the "Old Warrants") to purchase up to 800,000 shares of Common stock,
subject to adjustment in certain events. The original exercise price of the Old
Warrants was $12.05 per share, subject to adjustment in certain events. The Old
Warrants expire on December 23, 2002. In addition, in order to obtain the
consent of Transamerica Business Credit Corporation to the sale of Series B
Preferred Stock, a warrant to purchase 25,000 shares of Common Stock at an
original exercise price of $11.62 per share was issued to Transamerica (the
"Transamerica Warrant") on substantially the same terms as the Old Warrants. The
exercise price and number of shares of Common Stock which may be purchased upon
exercise of such warrants continue to be subject to further adjustment upon the
occurrence of certain dilution events including, without limitation, certain
issuances of Common Stock, stock options or convertible securities or certain
corporate transactions such as stock splits, mergers or asset sales.
Series B Preferred Stock converts into Common Stock at a floating rate
based on the market price of the Common Stock. The terms of Series B Preferred
Stock provide that the holders cannot exercise their rights to convert Series B
Preferred Stock prior to December 23, 2000, unless certain triggering events
occur. One such triggering event occurred as of May 1, 2000 when the closing
price of the Common Stock had been below $4.21 for 10 trading days, thus causing
the restriction on conversions to cease to be in effect.
In order to attempt to prevent the conversion of all of the shares of
Series B Preferred Stock and the resulting significant dilution to the holders
of Common Stock, we engaged in negotiations with the holders of Series B
Preferred Stock to restructure certain terms of Series B Preferred Stock.
Effective May 4, 2000, we entered into a Redemption and Exchange Agreement (the
"Redemption Agreement") with holders of 13,000 shares of Series B Preferred
Stock. Under the terms of the Redemption Agreement, we have redeemed 13,000
shares of Series B Preferred Stock at 116.5% of the Conversion Amount (as
defined
16
<PAGE>
in the Articles of Amendment to our Articles of Incorporation creating Series B
Preferred Stock (the "Series B Articles of Amendment"). We have not entered into
an agreement to redeem the shares of Series B Preferred Stock held by the holder
of the remaining shares of Series B Preferred Stock. As of December 12, 2000,
this holder has converted 1,890 shares of Series B Preferred Stock into an
aggregate of 1,621,936 shares of Common Stock and 110 shares of Series B
Preferred Stock continue to be held by such holder.
The Redemption Agreement also provides for the exchange of 693,333 of
the Old Warrants issued to the holders of Series B Preferred Stock subject to
the Redemption Agreement for warrants (the "Exchanged Warrants") with an
exercise price of $1.50 per share. In addition, such holders have received, in
the aggregate, 650,000 additional warrants (the "New Warrants") at an exercise
price of $1.50 per share. The Exchanged Warrants expire on December 23, 2002,
and the New Warrants expire on May 5, 2003. The exercise price and number of
shares of Common Stock which may be purchased upon exercise of the Exchanged
Warrants and the New Warrants are subject to adjustment upon the occurrence of
certain dilution events which occur 183 days after the date of issuance of such
warrants including, without limitation, certain issuances of Common Stock, stock
options or convertible securities or certain corporate transactions such as
stock splits, mergers or asset sales.
In the event of the liquidation of ProxyMed, the holders of the Series
B Preferred Stock will be entitled to a liquidation preference before any
amounts are paid to the holders of Common Stock. The liquidation preference is
equal to the amount originally paid for the Series B Preferred Stock ($1,000 per
share) plus accrued and unpaid dividends (and any unpaid default interest) on
any outstanding Series B Preferred Stock through the date of determination.
Other than as required by law, the holders of the Series B Preferred
Stock have no voting rights except that the consent of holders of at least
two-thirds of the outstanding Series B Preferred Stock will be required to (1)
effect any change in our Articles of Incorporation that would change any of the
rights of the Series B Preferred Stock; or (2) issue any Series B Preferred
Stock other than pursuant to the Securities Purchase Agreement.
Complete copies of the Series B Articles of Amendment, the form of the
Old Warrants and the Securities Purchase Agreement are contained in our Current
Report on Form 8-K filed with the SEC on December 28, 1999, and are incorporated
herein by reference. Complete copies of the Redemption Agreement, the Exchanged
Warrants and the New Warrants are contained in our Current Report on Form 8-K
filed with the SEC on May 8, 2000 and are incorporated herein by reference. The
descriptions of these documents are summaries of the material terms and
conditions only and are qualified in their entirety by reference to the complete
documents which are publicly available from the SEC.
Series C Preferred Stock
Pursuant to the terms of a Subscription Agreement dated June 28 2000,
we sold, in a private placement to institutional and individual investors (the
"Series C Preferred Financing"), a total of $24,310,000 of 7% Convertible Senior
Secured Notes (the "Notes") due January 1, 2001. Together with the Notes, we
issued five-year warrants for the purchase of an aggregate of 12,155,000 shares
of Common Stock at an exercise price of $1.00 per share. As described below, all
of the Notes have been converted into shares of Series C Preferred Stock. The
conversion price of the Series C Preferred Stock, the warrant exercise price,
and number of shares of Common Stock issuable upon exercise of the warrants are
subject to adjustment upon the occurrence of certain dilution events including,
without limitation, certain issuances of Common Stock, stock options or
convertible securities issued after June 2001, or certain corporate transactions
such as stock splits, mergers or asset sales.
As a result of completion of the redemption of the Series B Preferred
Stock pursuant to the Redemption Agreement, the Notes, plus accrued interest
thereon of approximately $20,000, automatically converted into 243,265 shares of
Series C Preferred Stock on June 30, 2000. Shares of Series C Preferred Stock
are immediately convertible into Common Stock at any time by the holder at an
initial conversion price of $1.00 per share. Shares of Series C Preferred are
subject to mandatory conversion if we raise more
17
<PAGE>
than $30 million in gross proceeds from the issuance of securities in a private
or public placement or if the closing stock price of the Company is trading at
$3.00 for 20 consecutive trading days. The Series C Preferred Stock is entitled
to receive a 7% annual non-cumulative dividend, payable quarterly in cash or
shares of Common Stock at the Company's option. If paid in Common Stock, the
Common Stock is valued at $1.00 per share, subject to adjustment. Commonwealth
served as private placement agent in the Series C Preferred Financing for which
it received, in addition to cash fees of $2,431,000, five-year warrants to
purchase 7,293,000 shares of Common Stock at an exercise price of $1.00 per
share. As part of its compensation for financial advisory services in connection
with the Series C Preferred Financing, we paid cash fees of $250,000 and also
issued to Commonwealth a five-year warrant to purchase 1,000,000 shares of
Common Stock at an exercise price of $1.00 per share.
The investors in the Series C Preferred Financing agreed to a one-year
lockup on the transfer or sale of any shares of Common Stock received upon
conversion of Series C Preferred Stock and exercise of the related warrants
issued. Additionally, Commonwealth has agreed to a 15-month lockup on the sale
or transfer of the shares of Common Stock underlying the warrants issued in
connection with Series C Preferred Financing and certain officers of ProxyMed
have also agreed to a similar lockup on all Common Stock owned or acquired
during the 15-month period. At the discretion of Commonwealth, lockup periods
for all parties can be extended for a period of up to an additional 12 months or
may be terminated early.
In August 2000, the Company sold 10,000 shares of Series C Preferred
Stock for $1 million in a private placement and issued five-year warrants for
the purchase of 500,000 shares of Common Stock at an exercise price of $1.00 per
share to Mr. Michael K. Hoover, its new Chairman of the Board and Chief
Executive Officer, under terms substantially identical to the Series C Preferred
Financing. Mr. Hoover has also agreed to similar lockup terms agreed to in the
Series C Preferred Financing by other officers of ProxyMed, as noted above.
At our option, the quarterly dividend on Series C Preferred Stock may
be paid in cash (to the extent permitted by the terms of the Series B Preferred
Stock) or Common Stock. If paid in stock, the stock is valued at $1.00 per
share, subject to adjustment. Dividends on Series C Preferred Stock are
non-cumulative. Dividends for the quarter ended September 30, 2000, were paid
with 436,065 shares of Common Stock issued in October 2000.
In the event of liquidation of ProxyMed, the holders of the Series C
Preferred will be entitled to a liquidation preference before any amounts are
paid to the holders of Common Stock or any other security junior to Series C
Preferred Stock. Series C Preferred Stock ranks junior to the Series B Preferred
Stock with respect to the preference as to distributions and payments upon
liquidation. The liquidation preference is equal to an amount originally paid
for the Series C Preferred Stock ($100 per share) plus accrued and unpaid
dividends on any outstanding Series C Preferred Stock through the date of
determination.
The holders of Series C Preferred Stock are entitled to one vote per
share of Common Stock issuable upon the conversion of the Series C Preferred
Stock and, except as otherwise provided by law, will vote as a single class with
the holders of Common Stock on all matters submitted to a vote. In the event
that the holders of Series C Preferred Stock are required to vote as a single
class, the affirmative vote of holders of not less than two-thirds of the
outstanding shares of Series C Preferred Stock shall be required to approve each
matter to be voted upon and if any matter is approved by such requisite
percentage of holders of Series C Preferred Stock, such matter shall bind all
holders of Series C Preferred Stock.
Complete copies of the Series C Preferred Financing documents described
herein are contained in our Quarterly Report on Form 10-Q/A for the quarterly
period ended June 30, 2000, filed with the SEC on August 31, 2000. The
descriptions of these documents are summaries of the material terms and
conditions only and are qualified in their entirety by reference to the complete
documents which are publicly available from the SEC.
18
<PAGE>
Certain Anti-Takeover Provisions
Under ProxyMed's Articles of Incorporation, there are approximately
16,751,700 unissued, unreserved shares of Common Stock and 1,746,625 shares of
preferred stock available for future issuance without shareholder approval. The
existence of authorized but unissued capital stock could have the effect of
making more difficult or discouraging an acquisition of ProxyMed deemed
undesirable by our Board of Directors.
Nasdaq National Market
Our Common Stock is, and the shares being offered by this Prospectus
will be, traded in the Nasdaq National Market unless our Common Stock is
delisted from Nasdaq. Certain events that could cause our Common Stock to be
delisted from Nasdaq are described in this Prospectus under "Risk Factors - We
may be required to delist our shares from Nasdaq is certain events occur".
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is North American
Transfer Company, Freeport, New York.
PLAN OF DISTRIBUTION
The selling shareholders (or, subject to applicable law, their pledges,
donees, distributees, transferees or successors in interest) are offering shares
of our Common Stock, which are issuable to them upon conversion of Series C
Preferred Stock, in lieu of cash dividends on Series C Preferred Stock, and upon
exercise of warrants that they acquired from us in connection with Series C
Preferred Financing. This Prospectus covers the selling shareholders' resale of
up to 47,910,565 shares of our Common Stock that we may issue to them upon
conversion of Series C Preferred Stock, as payments of dividends thereon and
upon exercise of the related warrants, as well as any additional shares that may
become issuable upon conversion of Series C Preferred Stock or exercise of the
warrants because of stock splits, stock dividends and other specified
transactions.
We have also agreed to prepare and file any amendments and supplements
to the registration statement in which this Prospectus is included as may be
necessary to keep it effective until this Prospectus is no longer required for
the selling shareholders to sell their shares of Common Stock, and to indemnify
and hold the selling shareholders harmless against certain liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), that could arise in
connection with the selling shareholders' sale of their shares. We have agreed
to pay all reasonable fees and expenses incident to the filing of these
registration statements, but the selling shareholders will pay any brokerage
commissions, discounts or other expenses relating to the sale of their Common
Stock.
The selling shareholders may sell the shares of Common Stock described
in this Prospectus directly or through underwriters, broker-dealers or agents.
The selling shareholders may also transfer, devise or give their shares by other
means not described in this Prospectus. As a result, pledges, donees,
transferees or other successors in interest that receive such shares as a gift,
partnership distribution or other non-sale related transfer may offer shares of
Common Stock under this Prospectus. In addition, if any shares covered by this
Prospectus qualify for sale pursuant to Rule 144 under the Securities Act, as
amended, the selling shareholders may sell such shares under Rule 144 rather
than pursuant to this Prospectus.
The selling shareholders may sell shares of Common Stock from time to
time in one or more transactions:
o at fixed prices that may be changed,
19
<PAGE>
o at market prices prevailing at the time of sale, or
o at prices related to such prevailing market prices or
at negotiated prices.
The selling shareholders may offer their shares of Common Stock in one
or more of the following transactions:
o on any national securities exchange or quotation
service on which the Common Stock may be listed or
quoted at the time of sale, including the Nasdaq
National Market,
o in the over-the-counter market,
o in privately-negotiated transactions,
o through options,
o by pledge to secure debts and other obligations,
o by a combination of the above methods of sale,
o to cover short sales made pursuant to this
Prospectus, or
o any other method permitted pursuant to applicable
law.
In effecting sales, brokers or dealers engaged by the selling
shareholders or affiliated with them may arrange for other brokers or dealers to
participate in the resales. The selling shareholders may enter in a block trade
in which a broker-dealer will attempt to sell a block of shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction. A broker-dealer may purchase such shares as principal and offer the
shares for resale for its account pursuant to this prospectus. Broker-dealers
may agree with the selling shareholders to sell a specified number of these
shares at a stipulated price per share. The selling shareholders may enter into
hedging transactions with broker-dealers, and in connection with those
transactions, broker-dealers may engage in short sales of the shares. The
selling shareholders also may sell shares short and deliver the shares to close
out such short positions. The selling shareholders also may enter into option or
other transactions with broker-dealers that require the delivery to the
broker-dealer of the shares, which the broker-dealer may resell pursuant to this
Prospectus. The selling shareholders also may pledge the shares to a broker or
dealer, and upon a default, the broker or dealer may effect sales of the pledged
shares pursuant to this Prospectus.
Broker-dealers may receive commissions or discounts from the selling
shareholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The selling
shareholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved. The broker-dealer transactions
may include:
o purchases of the shares by a broker-dealer as
principal and resales of the shares by the
broker-dealer for its account pursuant to this
prospectus;
o ordinary brokerage transactions; or
o transactions in which the broker-dealer solicits
purchasers.
If a material arrangement with any broker-dealer or other agent is entered into
for the sale of any shares of common stock through a block trade, special
offering, exchange distribution, secondary distribution, or a purchase by a
broker or dealer, a prospectus supplement will be filed, if necessary, pursuant
to Rule 424(b) under the Securities Act disclosing the material terms and
conditions of these arrangements.
The SEC may deem the selling shareholders and any underwriters,
broker-dealers or agents that participate in the distribution of the shares of
Common Stock to be "underwriters" within the meaning of the Securities Act. The
SEC may deem any profits on the resale of the shares of Common Stock and any
compensation received by any underwriter, broker-dealer or agent to be
underwriting discounts and commissions under the Securities Act.
Under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), any person engaged in the distribution of the shares of Common Stock may
not simultaneously engage in market-making activities with respect to Common
Stock for five business days prior to the start of the distribution. In
addition, each selling shareholder and any other person participating in a
distribution will be subject to the Exchange Act, which may limit the timing of
purchases and sales of Common Stock by the selling shareholder or any other
person.
LEGAL OPINION
The validity of the Common Stock offered hereby will be passed on for
us by Holland & Knight LLP, 701 Brickell Avenue, Suite 3000, Miami, Florida
33131.
20
<PAGE>
EXPERTS
The consolidated balance sheets of ProxyMed as of December 31, 1999 and
1998, and the related consolidated statements of operations, stockholders'
equity and cash flows of ProxyMed for each of the three years in the period
ended December 31, 1999, that are incorporated by reference in this Prospectus
have been incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on that firm's
authority as experts in accounting and auditing.
21
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses in connection
with the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fee.
<TABLE>
<CAPTION>
To Be Paid By
The Registrant
--------------
<S> <C>
SEC registration fee $18,593
Accounting fees and expenses 5,000
Legal fees and expenses 10,000
Miscellaneous 4,407
-------
$38,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 607.0850 of the Florida Business Corporation Act empowers a
Florida corporation to indemnify any person who was or is a party to any
proceeding (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against liability
incurred in connection with such proceeding, including any appeal thereof, if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, such person had no reasonable
cause to believe his conduct was unlawful. A Florida corporation may indemnify
such person against expenses including amounts paid in settlement (not
exceeding, in the judgment of the board of directors, the estimated expense of
litigating the proceeding to conclusion) actually and reasonably incurred by
such person in connection with actions brought by or in the right of the
corporation to procure a judgment its favor under the same conditions set forth
above, if such person acted in good faith and in a manner such person believed
to be in, or not opposed to, the best interests of the corporation, except that
no indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and to the extent the court in which such action or suit was brought or
other court of competent jurisdiction shall determine upon application that, in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
To the extent such person has been successful on the merits or
otherwise in defense of any action referred to above, or in defense of any
claim, issue or matter therein, the corporation must indemnify such person
against expenses, including counsel (including those for appeal) fees, actually
and reasonably incurred by such person in connection therewith. The
indemnification and advancement of expenses provided for in, or granted pursuant
to, Section 607.0850 is not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation of ProxyMed or any by-law, agreement, vote of shareholders or
disinterested directors, or otherwise. Section 607.0850 also provides that a
corporation may maintain insurance against liabilities for which indemnification
is not expressly provided by the statute.
Article VII of ProxyMed's Restated Articles of Incorporation and
Article VII of ProxyMed's Bylaws provide for indemnification of the directors,
officers, employees and agents of ProxyMed (including the advancement of
expenses) to the fullest extent permitted by Florida law. In addition, ProxyMed
has contractually agreed to indemnify its directors and officers to the fullest
extent permitted under Florida law.
22
<PAGE>
ProxyMed's employment agreements with its principal executive officers
limit their personal liability for monetary damages for breach of their
fiduciary duties as officers and directors, except for liability that cannot be
eliminated under the Florida Business Corporation Act.
Item 16. Exhibits.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
Exhibit No. Description of Documents
----------- ------------------------
<S> <C>
2.1 Stock Purchase Agreement, dated April 24, 1998, between ProxyMed, Inc. and WPJ,
Inc.(1)
2.2 Merger Agreement, dated as of December 30, 1998, between ProxyMed, Inc.,
ProxyMed Acquisition Corp. and Key Communications Service, Inc.(2)
3.3 Articles of Amendment to Articles of Incorporation of ProxyMed, Inc.(3)
3.4 Articles of Amendment to Articles of Incorporation of ProxyMed dated as of June 15,
2000.(5)
4.1 Form of Warrant to Purchase Common Stock of ProxyMed, Inc., dated December 23,
1999, issued to certain investors.(3)
4.2 Registration Rights Agreement, dated as of December 23, 1999, by and among
ProxyMed, Inc. and the investors named therein.(3)
4.3 Form of Exchanged Warrant to Purchase Common Stock of ProxyMed, Inc., dated
May 4, 2000, issued to certain investors.(4)
4.4 Form of New Warrant to Purchase Common Stock of ProxyMed, Inc., dated May 4,
2000, issued to certain investors.(4)
4.5 Registration Rights Agreement, dated as of May 4, 2000, by and among ProxyMed,
Inc. and the investors named therein.(4)
5.1 Opinion of Holland & Knight LLP.
10.24 Securities Purchase Agreement, dated as of December 23, 1999, by and among
ProxyMed, Inc. and the investors listed on the Schedule of Buyers attached thereto.(3)
10.27.1 Redemption and Exchange Agreement, dated as of May 4, 2000, by and among
ProxyMed, Inc. and the investors named therein.(4)
10.27.2 Placement Agency Agreement dated June 7, 2000 between ProxyMed and
Commonwealth Associates, L.P.(5)
10.28 Warrant No. 00-09 - Warrant Agreement for Common Stock of ProxyMed dated as of
June 15, 2000 in favor of Commonwealth Associates, L.P. or its permitted assigns.(5)
10.29 Warrant No. 00-21 - Warrant Agreement for Common Stock of ProxyMed dated as of
June 15, 2000 in favor of Commonwealth Associates, L.P. or its permitted assigns.(5)
10.30 Subscription Agreement dated as of June 28, 2000 among ProxyMed and the
subscribers listed in that agreement for the purchase of 7% Convertible Senior Secured
Notes due January 1, 2001 and Warrants to Purchase Shares of Common Stock.(5)
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description of Documents
----------- ------------------------
<S> <C>
10.31 Amended and Restated General Security Agreement dated as of June 28, 2000 among
ProxyMed, Key Communications Service, Inc., WPJ, Inc. d/b/a Integrated Medical
Systems and Commonwealth Associates, L.P., in its capacity as agent for the
Purchasers described in the agreement.(5)
10.32 Amended and Restated Intellectual Property Security Agreement dated as of June 28,
2000 in favor of Commonwealth Associates, L.P., in its capacity as agent for the
Purchasers described in the agreement.(5)
10.33 Form of Warrant Agreement for Common Stock of ProxyMed for Warrants issued under the
Subscription Agreement contained in Exhibit 10.30.(5)
10.34 Form of 7% Convertible Senior Secured Promissory Note due January 1, 2001.(5)
23.1 Consent of Holland & Knight LLP (included in the opinion filed as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on signature page of the Registration Statement).
(1) Incorporated by reference to the exhibits filed with Current Report on Form 8-K dated May 19,
1998.
(2) Incorporated by reference to the exhibits filed with the Current Report on Form 8-K dated
December 31, 1998.
(3) Incorporated by reference to the exhibits filed with the Current Report on Form 8-K dated
December 23, 1999.
(4) Incorporated by reference to the exhibits filed with the Current Report on Form 8-K dated May 8,
2000.
(5) Incorporated by reference to the exhibits filed with Amendment No. 1 to the Quarterly Report on
Form 10-Q for the quarter ended on June 30, 2000.
</TABLE>
Item 17. Undertakings.
(a) 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; (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; and (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; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, 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 the 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 which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934 (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
24
<PAGE>
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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 Act and will
be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that: (i) for the
purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this Registration Statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of the registration statement as of the time it was
declared effective; and (ii) for the purposes of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus 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.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on December 14,
2000.
PROXYMED, INC.
By: /s/ Judson E. Schmid
--------------------------------
Executive Vice President,
Chief Financial Officer and Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael K. Hoover and Frank M. Puthoff,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, in any and all capacities, to
sign all amendments (including post-effective amendments) to the Registration
Statement to which this power of attorney is attached, and to file all those
amendments and all exhibits to them and other documents to be filed in
connection with them, including any registration statement pursuant to Rule 462
under Securities Act of 1933, with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Michael K. Hoover Chairman of the Board, Chief December 14, 2000
--------------------------- Executive Officer and Director
Michael K. Hoover
/s/ Harold S. Blue Vice-Chairman of the Board December 14, 2000
--------------------------- and Director
Harold S. Blue
/s/ Edwin M. Cooperman Director December 14, 2000
---------------------------
Edwin M. Cooperman
/s/ Gerald B. Cramer Director December 14, 2000
---------------------------
Gerald B. Cramer
/s/ Donald G. Drapkin Director December 14, 2000
---------------------------
Donald G. Drapkin
/s/ Michael S. Falk Director December 14, 2000
---------------------------
Michael S. Falk
/s/ Thomas E. Hodapp Director December 14, 2000
---------------------------
Thomas E. Hodapp
/s/ Bertram J. Polan Director December 14, 2000
---------------------------
Bertram J. Polan
/s/ Eugene R. Terry Director December 14, 2000
---------------------------
Eugene R. Terry
</TABLE>
26
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Documents
----------- ------------------------
<S> <C>
5.1 Opinion of Holland & Knight LLP.
23.1 Consent of Holland & Knight LLP (included in the opinion filed as Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on signature page of the Registration Statement).
</TABLE>
