Provident American Corporation Completes $27.5 Million Private Equity Placement
EAST NORRITON, Pa., Sept. 16 /PRNewswire/ -- Provident American Corporation (Nasdaq: PAMC), majority owner of the leading online insurance marketer, HealthAxis.com, announced today the private placement of $27.5 million in new capital. Brown Simpson Asset Management, LLC, with offices in New York and Palo Alto, served as the lead investor. Also participating were LBI Group Inc. and the Royal Bank of Canada.
In the transaction, Provident issued 2% coupon convertible debentures due September 2002, convertible into 1,352,015 shares of Provident's common stock at $20.34 per share, which represents a 15% premium over the average of Monday's closing price of $18.00 per share and Tuesday's closing price of $17.375 per share.
As part of the transaction, Provident also issued a five-year warrant to purchase 202,802 shares of its common stock at an exercise price equal to the conversion price ($20.34 per share). Additionally, certain registration rights were provided to the investors.
In a separate but related transaction, Alvin H. Clemens, the Company's Chairman, has voluntarily agreed to assign to the Company options to purchase 202,802 shares of the Company's common stock. The net result of this transaction is an equal number of warrants issued to options retired, with the warrants being issued at a substantially higher exercise price.
This financing represents a major milestone in the restructuring of Provident American that has been ongoing for the past 18 months. These funds enable the Company to complete the previously announced sale of PILIC to AHC Holdings, which is subject to regulatory and other approvals. The funds also enable the Company to consummate the purchase of 1.415 million HealthAxis.com shares from an existing shareholder under terms disclosed in a Form 8-K filed with the Securities Exchange Commission on June 22, 1999.
Michael Ashker, President and CEO of Provident American Corporation said, "We're excited that, following the HealthAxis.com share purchase and the closing of the PILIC sale, each Provident shareholder will have an increased ownership stake in HealthAxis.com and that Provident's sole remaining business will be HealthAxis.com."
About Provident American Corporation/ HealthAxis.com, Inc.
The Provident American Corporation (Nasdaq: PAMC) operates HealthAxis.com, Inc., a pioneer in the Internet distribution of health and life insurance to the individual and small group markets. HealthAxis.com is a fully transactional, "digital insurance agent." HealthAxis.com does not engage in any insurance underwriting and assumes no underwriting risk. Through its interactive, user-friendly, one-stop healthcare insurance Web site, healthaxis.com, HealthAxis.com provides customers with access to and the ability to purchase a full range of high quality insurance products at competitive prices. HealthAxis.com also provides product information and advice, instant price quotes, electronic application processing, online billing, claims status, policy or personal information changes, and a customer hotline. Policyholders can easily and conveniently view billing information, claims history and policy details - day and night, 7 days a week. HealthAxis.com has Internet distribution agreements with AOL (Keyword: HealthAxis), Lycos, CNet, Snap! and Yahoo!
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements made by the Company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to trends, management's beliefs, expectations and opinions, which are based upon a number of assumptions concerning future conditions that ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various factors, which may cause actual results to differ materially from those in the forward-looking statements. For further information, which could cause actual results to differ from the Company's expectations as well as other factors, which could affect the Company's financial statements, please refer to the Company's reports filed with the Securities and Exchange Commission.
CONTACT: Investors, Deidre Holt of HealthAxis.com, 610-275-3800, dholt@healthaxis.com; or Media, Annalise Carol for HealthAxis.com, 212-484-7237, acarol@rlmnet.com.
SOURCE Provident American Corporation
CO: Provident American Corporation; HealthAxis.com
ST: Pennsylvania
IN: MLM INS
SU:
09/16/1999 10:31 EDT prnewswire.com |
