HealthAxis Inc. Signs Amended Definitive Agreement to
Merge with HealthAxis.com
Amends Terms Of $27.5 Million Convertible Debentures
EAST NORRITON, PA, Sept 29, 2000—HealthAxis Inc. (NASDAQ: HAXS) announced
today that it has executed an amended definitive agreement to merge with
HealthAxis.com, Inc., a subsidiary of HealthAxis Inc. (“HAI”), and a proven
leader in Web-enabling healthcare payers. Both companies’ Boards have
formally approved the terms of the merger.
Under the terms of the transaction, HAI will issue new shares to acquire
all of the outstanding HealthAxis.com, Inc. shares that HAI does not already
own. HealthAxis.com, Inc. shareholders will receive 1.334 shares of HAI
common stock for each share of HealthAxis.com, Inc. common stock that they
own. Existing HAI shareholders will continue to own the same number of
shares of HAI, after the transaction closes, as they did immediately prior
to the closing of the merger.
Additionally, the Company has successfully renegotiated the terms of the
$27.5 million, 2% Convertible Debentures previously issued. The revised
terms of the Debentures include:
Ø Maturity Date. The Maturity Date of the Debenture on which the
principal becomes due and payable is amended and extended from September 14,
2002 to September 14, 2005.
Ø Conversion Price of Debenture. The Conversion Price of the
Debenture is amended from $20.34 to $9.00.
Ø Exercise Price of Warrants. The Exercise Price of the 202,802 HAI
Warrants is amended from $20.34 to $3.01.
The amended terms of the Debentures take effect upon the consummation of the
merger with HealthAxis.com, Inc.
Additionally $5 million, at face value, of the original $27.5 million
Debenture have been purchased from a previous holder, in equal amounts, by
Alvin Clemens, Chairman of the Board of both HealthAxis Inc. and
HealthAxis.com, Inc., UICI, and Brown Simpson Asset Management, LLC. The
purchase price for the private transaction was $3.5 million.
Michael Ashker, chief executive officer of HAI and HealthAxis.com, Inc. said
“working diligently over the past several weeks, the two companies have
resolved all of the outstanding issues impeding the execution of the planned
merger. This transaction, once completed, will eliminate the awkward
organizational structure under which both sets of shareholders have labored
by providing for a single corporate entity with a single Board of Directors.
The unified entity will be much better positioned to explain its story to
customers, prospects, employees and the Wall Street community”
The consummation of the merger is subject to various conditions including
the approval of both HealthAxis.com, Inc. and HAI shareholders as well as
regulatory approval. The Company expects to file an amended Form S-4
Registration Statement for this transaction during the first week of
October. Pending effectiveness of the S-4 and satisfaction of the closing
conditions, the closing is anticipated to occur during the latter part of
the fourth quarter of 2000 or early in the first quarter of 2001.
About HealthAxis
HealthAxis.com, Inc., a subsidiary of HealthAxis Inc., is a leading provider
of Internet solutions for healthcare insurance distribution and
administration for the payer community. The Company's proprietary workflow
and business application software, built around an application service
provider model, enables healthcare payers—carriers, third party
administrators, and large, self-funded groups—to more efficiently capture,
process, and share health plan data over the Internet. HealthAxis.com, Inc.
is headquartered in suburban Philadelphia, with significant operations in
Dallas, as well as offices in eight additional locations both domestic and
international. The Company employs over 350 IT professionals.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: Certain statements made 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.
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