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[X] |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006 |
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
Pennsylvania |
7301 N.
State Highway 161, Suite 300 Irving, Texas 75039 |
23-2214195 |
||||||||
(State or other jurisdiction of incorporation or organization) |
(Address of
principal executive offices including zip code) |
(I.R.S.
Employer Identification Number) |
(972)
443-5000 |
||||||||||
(Registrants telephone number, including area code) |
Title of each
class |
Name of each exchange on which registered |
|||||
None |
None |
Page |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
PART I |
|||||||||||
Item
1. |
Business |
2 | |||||||||
Item
1A. |
Risk Factors |
12 | |||||||||
Item
1B. |
Unresolved Staff Comments |
20 | |||||||||
Item
2. |
Properties |
20 | |||||||||
Item
3. |
Legal Proceedings |
20 | |||||||||
Item
4. |
Submission of Matters to a Vote of Security Holders |
20 | |||||||||
PART II |
|||||||||||
Item
5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
21 | |||||||||
Item
6. |
Selected Financial Data |
23 | |||||||||
Item
7. |
Managements Discussion and Analysis of Financial Condition |
||||||||||
and Results of Operation |
24 | ||||||||||
Item
7A. |
Quantitative and Qualitative Disclosures About Market Risk |
35 | |||||||||
Item
8. |
Financial Statements and Supplementary Data |
36 | |||||||||
Item
9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
59 | |||||||||
Item
9A. |
Controls and Procedures |
59 | |||||||||
Item
9B. |
Other Information |
59 | |||||||||
PART III |
|||||||||||
Item
10 |
Directors, Executive Officers and Corporate Governance |
60 | |||||||||
Item
11. |
Executive Compensation |
60 | |||||||||
Item
12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
60 | |||||||||
Item
13. |
Certain Relationships and Related Transactions, and Director Independence |
60 | |||||||||
Item
14. |
Principal Accounting Fees and Services |
60 | |||||||||
PART IV |
|||||||||||
Item
15. |
Exhibits, Financial Statement Schedules |
61 |
|
Pay claims faster, more accurately and at a lower cost; |
|
Reduce their internal administrative expenses; |
|
Reduce their medical costs; |
|
Improve their customer service, and |
|
Provide competitive advantage and thereby accelerate their revenue growth. |
|
Pay health insurance claims faster, more accurately and at a lower cost; |
|
Reduce their internal administrative expenses; |
|
Reduce their medical costs; |
|
Improve their customer service, and |
|
Provide competitive advantage in their markets and thereby accelerate their revenue growth. |
|
To retain and grow existing customers by becoming their strategic partner rather than simply their operational partner. The achievement of this objective requires us to more fully understand our customers strategic goals, to develop unique support plans around these goals and to continue to enhance our technology and services to match our customers priorities. |
|
To grow our claims and administration solutions and BPO services market penetration by creating new service offerings that meet market demands and by strengthening our marketing and sales capabilities and distribution channels. |
|
To provide customers the option of on-shore, near-shore, and off-shore processing capabilities providing high quality results. |
|
To identify companies with complementary solutions and services that can provide attractive partnering arrangements or accretive acquisition and merger opportunities. |
|
To achieve improved profitability and cash flow by growing revenues, while managing costs diligently. |
|
To solidify Healthaxis as the company of choice for its employees through our value system and incentive programs, and by creating an environment of challenge, growth, opportunity, accountability, teamwork and choice. |
Products/Solutions |
Third Party Administrators |
Health Insurance Payers |
Managed Care Organizations |
Self- Administered Employer Groups |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Benefit Administration and Claims Processing Systems |
||||||||||||||||||
Insur-Admin
|
X |
X |
||||||||||||||||
Insur-Claims
|
X |
X |
||||||||||||||||
Web
Connectivity Products |
||||||||||||||||||
WebAxisSelf-Service Applications |
||||||||||||||||||
Employee/member module |
X |
X |
X |
|||||||||||||||
Employer module |
X |
X |
X |
|||||||||||||||
WebAxis-Broker |
X |
X |
||||||||||||||||
WebAxis-Enroll |
X |
X |
X |
|||||||||||||||
BPO
Services |
||||||||||||||||||
Mailroom |
X |
X |
X |
X |
||||||||||||||
Imaging |
X |
X |
X |
X |
||||||||||||||
Data capture |
X |
X |
X |
X |
||||||||||||||
Claims pre-adjudication |
X |
X |
X |
X |
||||||||||||||
EDI transaction management |
X |
X |
X |
X |
||||||||||||||
Provider cleansing services |
X |
X |
X |
X |
||||||||||||||
Claims editing |
X |
X |
X |
X |
||||||||||||||
Claims re-pricing |
X |
X |
X |
X |
|
Web site |
|
A targeted direct mail program |
|
User conferences conducted exclusively for the Companys clients |
|
Participation in regional and national industry conferences and trade shows |
|
Relationships developed with industry consultants and strategic partners |
|
Informational listings and authored articles in trade journals |
|
Benefit administration and claims processing systems TriZetto (RIMS, Facets, and QCSI), DST Systems, Inc., Mphasis-Eldorado Computing, SunGard/SBPA, and Acclimation Systems, Inc. |
|
Web connectivity products Payer In-house Solutions, TriZetto (Healthweb), Healthation (AcceleHealth), HealthTrio, Connecture, HealthX and eBenX. |
|
BPO services Affiliated Computer Services, WebMD/Dakota, Future Vision, GTESS, Sourcecorp, Data Dimensions and an increasing number of offshore vendors. |
|
9 IBM RS6000 processors running on UNIX / AIX operating systems |
|
16 Compaq and IBM servers running on Windows 2000 operating systems and VMware |
|
IBM 6 terra-byte FastT storage area network (SAN) |
|
Emdeon which prints and mails the majority of output from our claims system, namely beneficiary checks, explanation of benefits and letters. |
|
Gentran which supplies software that supports our ability to receive and transmit transactions and files electronically. |
|
Navisite which provides the data center facilities we contract through Healthcare BPO Partners. |
|
IBM which provides critical hardware and operating system components used by our systems. |
|
Healthcare BPO Partners which provides personnel and infrastructure that is utilized by the Company to provide business process outsourcing services and other software development and technical support services to support the Companys operations. Healthcare BPO Partners is a related party due to common ownership by one of the Companys significant shareholders. |
|
Ingenix which provides usual and customary databases that are integrated with our Insur-Claims system and used by our customers for determining the reasonableness of a healthcare providers fees. |
|
McKesson which provides certain clinical logic and claims editing functionality used by our customers in the processing of health insurance claims. |
|
Microsoft which provides operating system and applications software used by our systems. Navisite/Level3, Verizon/MCI, Netlojix and AT&T which provide telecommunication lines and Internet gateways through which we connect to our clients. |
|
Develop non-infringing technology or tradenames; |
|
Obtain a license to the intellectual property; |
|
Stop selling the applications or using names that contain the infringing intellectual property, or pay substantial damage awards. |
Item
1B. |
Unresolved Staff Comments |
Item
2. |
Properties |
Address |
Square Feet |
Lease Expiration |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
7301 North
State Highway 161, Suite 300, Irving, TX |
20,000 | June
2010 |
||||||||
670 East Main
St, Castle Dale, UT |
5,450 | December
2007 |
||||||||
13
Pimento Way, Montego Freeport, Montego Bay, Jamaica |
6,500 | February
2008 |
Item
3. |
Legal Proceedings |
Item
4. |
Submission of Matters to a Vote of Security Holders |
Item
5. |
Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
2006 |
2005 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
High |
Low |
High |
Low |
||||||||||||||||
First Quarter
|
$ | 1.72 | $ | 1.02 | $ | 3.50 | $ | 2.00 | |||||||||||
Second
Quarter |
1.65 | 0.75 | 2.33 | 1.41 | |||||||||||||||
Third Quarter
|
1.46 | 0.67 | 1.94 | 1.30 | |||||||||||||||
Fourth
Quarter |
1.78 | 1.20 | 1.71 | 1.10 |
Item
6. |
Selected Financial Data. |
Years Ended December 31, |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
2004 |
2003 |
2002 |
|||||||||||||||||||
(In thousands, except per share
data) |
|||||||||||||||||||||||
Statement of
Operations Data: |
|||||||||||||||||||||||
Revenue
|
$ | 16,674 | $ | 15,705 | $ | 16,162 | $ | 20,851 | $ | 19,816 | |||||||||||||
Expenses: |
|||||||||||||||||||||||
Cost of
revenues |
13,826 | 14,489 | 15,905 | 19,573 | 21,355 | ||||||||||||||||||
Sales and
marketing |
1,252 | 1,139 | 1,475 | 948 | 1,951 | ||||||||||||||||||
General and
administrative |
2,359 | 2,566 | 3,489 | 3,298 | 3,745 | ||||||||||||||||||
Research and
development |
| | | 30 | 366 | ||||||||||||||||||
Reversal of
contingent tax liability |
| (979 | ) | | | | |||||||||||||||||
Restructuring
and impairment charges |
| 537 | | | 6,232 | ||||||||||||||||||
Amortization
of intangibles |
| 84 | 1,032 | 1,296 | 1,300 | ||||||||||||||||||
Total
expenses |
17,437 | 17,836 | 21,901 | 25,145 | 34,949 | ||||||||||||||||||
Operating
loss |
(763 | ) | (2,131 | ) | (5,739 | ) | (4,294 | ) | (15,133 | ) | |||||||||||||
Gain on
extinguishments of debt |
| | | | 16,388 | ||||||||||||||||||
Interest
expense and other income, net |
(87 | ) | (120 | ) | (219 | ) | 30 | (427 | ) | ||||||||||||||
Income (loss)
before provision for income taxes |
(850 | ) | (2,251 | ) | (5,958 | ) | (4,264 | ) | 828 | ||||||||||||||
Income tax
provision |
324 | | | | | ||||||||||||||||||
Income (loss)
from continuing operations |
(526 | ) | (2,251 | ) | (5,958 | ) | (4,264 | ) | 828 | ||||||||||||||
Loss from
sale of discontinued operations |
| | | | (3,564 | ) | |||||||||||||||||
Gain (loss)
from discontinued operations |
| | | | 850 | ||||||||||||||||||
Loss before
cumulative effect of accounting change |
(526 | ) | (2,251 | ) | (5,958 | ) | (4,264 | ) | (1,886 | ) | |||||||||||||
Cumulative
effect of accounting change |
| | | | (6,674 | ) | |||||||||||||||||
Net loss
|
(526 | ) | (2,251 | ) | (5,958 | ) | (4,264 | ) | (8,560 | ) | |||||||||||||
Less: Cash
dividends on preferred stock |
| | | (690 | ) | (198 | ) | ||||||||||||||||
Less: Fair
value of consideration transferred over carrying value of preferred stock |
| | (3,973 | ) | | | |||||||||||||||||
Net loss
applicable to common stock |
$ | (526 | ) | $ | (2,251 | ) | $ | (9,931 | ) | $ | (4,954 | ) | $ | (8,758 | ) | ||||||||
Basic and
diluted income (loss) per share of common stock: |
|||||||||||||||||||||||
Continuing
operations |
$ | (.07 | ) | $ | (0.44 | ) | $ | (3.48 | ) | $ | (1.05 | ) | $ | 0.12 | |||||||||
Discontinued
operations |
| | | | (.51 | ) | |||||||||||||||||
Cumulative
effect of accounting charge |
| | | | (1.24 | ) | |||||||||||||||||
Net loss
|
$ | (.07 | ) | $ | (0.44 | ) | $ | (3.48 | ) | $ | (1.05 | ) | $ | (1.63 | ) | ||||||||
Weighted
average common shares and equivalents used in computing basic and diluted (loss) income per share |
7,030 | 5,174 | 2,857 | 4,699 | 5,361 |
Years Ended December 31, |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
2004 |
2003 |
2002 |
|||||||||||||||||||
(In thousands, except per share
data) |
|||||||||||||||||||||||
Balance
Sheet Data: |
|||||||||||||||||||||||
Cash
|
$ | 3,362 | $ | 4,729 | $ | 3,930 | $ | 7,887 | $ | 11,380 | |||||||||||||
Total assets
|
21,318 | 21,146 | 20,658 | 27,078 | 33,621 | ||||||||||||||||||
Long-term
interest-bearing debt obligations |
1,859 | 2,028 | 2,678 | 3,296 | | ||||||||||||||||||
Preferred
stock |
740 | 2,752 | 3,100 | 5,899 | 6,280 | ||||||||||||||||||
Total
stockholders equity including preferred stock |
14,322 | 14,807 | 12,799 | 18,711 | 27,572 |
Item
7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations. |
|
Resulting primarily from the increase in revenue, we generated
an operating profit in the third quarter of 2006 and operations remained near break-even in the fourth quarter of 2006. Cash flow from operations was
positive in each of the last two quarters of 2006. |
|
The Company is nearing completion of a large-scale customer implementation and we added new customers in 2006 that have added a significant number of revenue-generating lives to our systems. Due to the subscription nature of our business, these customer wins do not immediately impact our operating results, but are expected to provide additional revenue in future periods. |
|
Effective July 31, 2006, the Company extended its note payable to HealthMarkets (formerly known as UICI). Under the prior promissory note, the balance of approximately $1.5 million would have been due at its maturity date of September 30, 2006. Under the renewal promissory note, Healthaxis paid HealthMarkets $500,000 in August 2006 and continues to make monthly payments equal to the greater of $65,000 or one-half of the monthly invoice amount for services rendered to an affiliate of HealthMarkets. A final installment in the amount of all outstanding principal plus accrued interest is due and payable February 1, 2008. |
|
The Company has secured lines of credit for working capital and equipment purchases that have expanded our available liquidity and strengthened our financial condition to support continuing growth. |
(Table in thousands) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended Dec. 31, |
|||||||||||||||
2006 |
2005 |
Change |
|||||||||||||
Revenues
|
$ | 16,674 | $ | 15,705 | $ | 969 | |||||||||
Cost of
revenues |
13,826 | 14,489 | (663 | ) | |||||||||||
Gross profit
|
$ | 2,848 | $ | 1,216 | $ | 1,632 | |||||||||
% of revenue
|
17 | % | 8 | % |
(Table in thousands) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended Dec. 31, |
|||||||||||||||
2006 |
2005 |
Change |
|||||||||||||
Sales and
marketing expense |
$ | 1,252 | $ | 1,139 | $ | 113 | |||||||||
General and
administrative expense |
2,359 | 2,566 | (207 | ) | |||||||||||
Reversal of
contingent tax liability |
| (979 | ) | 979 | |||||||||||
Lease
abandonment charge |
| 537 | (537 | ) | |||||||||||
Amortization
of intangibles |
| 84 | (84 | ) | |||||||||||
Interest and
other income, net |
115 | 116 | (1 | ) | |||||||||||
Interest
expense |
(202 | ) | (236 | ) | 34 | ||||||||||
Income tax
benefit |
324 | | 324 |
(Table in thousands) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended Dec. 31, |
|||||||||||||||
2005 |
2004 |
Change |
|||||||||||||
Revenues
|
$ | 15,705 | $ | 16,162 | $ | (457 | ) | ||||||||
Cost of
revenues |
14,489 | 15,905 | (1,416 | ) | |||||||||||
Gross profit
|
$ | 1,216 | $ | 257 | $ | 959 | |||||||||
% of revenue
|
8 | % | 2 | % |
(Table in thousands) |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year Ended Dec. 31, |
|||||||||||||||
2005 |
2004 |
Change |
|||||||||||||
Sales and
marketing expense |
$ | 1,139 | $ | 1,475 | $ | (336 | ) | ||||||||
General and
administrative expense |
2,566 | 3,489 | (923 | ) | |||||||||||
Reversal of
contingent tax liability |
(979 | ) | | (979 | ) | ||||||||||
Lease
Abandonment charge |
537 | | 537 | ||||||||||||
Amortization
of intangibles |
84 | 1,032 | (948 | ) | |||||||||||
Interest and
other income, net |
116 | 25 | 91 | ||||||||||||
Interest
expense |
(236 | ) | (244 | ) | 8 |
Total |
Less than 1 Year |
13 Years |
35 Years |
After 5 Years |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Long term
debt obligations (1) |
$ | 1,916 | $ | 1,462 | $ | 454 | $ | | $ | | ||||||||||||
Operating
lease obligations (2) |
1,151 | 369 | 627 | 155 | | |||||||||||||||||
Purchase
obligations (3) |
150 | 150 | | | | |||||||||||||||||
Other
long-term liabilities (4) |
892 | 124 | 185 | 175 | 408 | |||||||||||||||||
Total
|
$ | 4,109 | $ | 2,105 | $ | 1,266 | $ | 330 | $ | 408 |
(1) |
Long-term debt obligations relate to the promissory note payable to HealthMarkets and the working capital and equipment lines of credit. |
(2) |
Operating lease obligations consist primarily of leases of office space. |
(3) |
Purchase obligations consist primarily of contractual obligations for estimated future payments related to the licensing of various software modules that are integrated into Healthaxis products. |
(4) |
Other long-term liabilities consist of estimated payments anticipated for funding of post-retirement benefits for a group of former executives of a predecessor to the Company. The benefits consist primarily of medical and dental insurance. |
Item
7A. |
Quantitative and Qualitative Disclosures About Market Risk. |
Item
8. |
Financial Statements and Supplementary Data |
Page |
||||||
---|---|---|---|---|---|---|
Report of
Independent Registered Public Accounting Firm |
37 | |||||
Consolidated
Balance SheetsDecember 31, 2006 and 2005 |
38 | |||||
Consolidated
Statements of Operations Years ended December 31, 2006, 2005 and 2004 |
39 | |||||
Consolidated
Statements of Changes in Stockholders Equity Years ended December 31, 2006, 2005 and 2004 |
40 | |||||
Consolidated
Statements of Cash Flows Years ended December 31, 2006, 2005 and 2004 |
41 | |||||
Notes to
Consolidated Financial Statements |
42 |
December 31, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
||||||||||
ASSETS |
|||||||||||
Current
assets: |
|||||||||||
Cash and cash
equivalents |
$ | 3,362 | $ | 4,729 | |||||||
Accounts and
notes receivable, net of allowance for doubtful accounts of $7 and $7, respectively |
2,943 | 2,256 | |||||||||
Prepaid
expenses |
544 | 628 | |||||||||
Total current
assets |
6,849 | 7,613 | |||||||||
Property,
equipment and software, less accumulated depreciation and amortization of $6,554 and $5,943, respectively |
1,550 | 1,726 | |||||||||
Contract
start-up costs, less accumulated amortization of $2,026 and $1,681, respectively |
1,340 | 451 | |||||||||
Goodwill
|
11,276 | 11,276 | |||||||||
Other assets
|
303 | 80 | |||||||||
Total assets
|
$ | 21,318 | $ | 21,146 | |||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
|||||||||||
Current
liabilities: |
|||||||||||
Accounts
payable |
$ | 1,498 | $ | 1,183 | |||||||
Accounts
payable to related parties |
89 | 135 | |||||||||
Accrued
liabilities |
509 | 637 | |||||||||
Deferred
revenues |
1,612 | 626 | |||||||||
Note payable,
current portion |
750 | 2,028 | |||||||||
Working
capital and equipment lines of credit, current portion |
655 | | |||||||||
Current
portion, post retirement and employment liabilities |
124 | 106 | |||||||||
Current
portion, capital lease obligations |
57 | 234 | |||||||||
Total current
liabilities |
5,294 | 4,949 | |||||||||
Note payable
|
93 | | |||||||||
Post
retirement and employment liabilities |
768 | 793 | |||||||||
Equipment
line of credit |
361 | | |||||||||
Deferred rent
|
306 | 151 | |||||||||
Capital lease
obligations |
| 40 | |||||||||
Other
liabilities |
174 | 406 | |||||||||
Total
liabilities |
6,996 | 6,339 | |||||||||
Commitments
and contingencies |
|||||||||||
Stockholders Equity: |
|||||||||||
Preferred
stock, par value $1.00: authorized 100,000,000 shares: Series A Convertible, Issued and outstanding 740,401 and 2,751,658 shares, respectively (no liquidation preference) |
740 | 2,752 | |||||||||
Common stock,
par value $.10: authorized 1,900,000,000 shares, Issued and outstanding 8,172,112 and 6,088,855 shares, respectively |
817 | 609 | |||||||||
Notes
receivable from employees |
(23 | ) | (23 | ) | |||||||
Additional
paid-in capital |
450,416 | 448,571 | |||||||||
Accumulated
deficit |
(437,628 | ) | (437,102 | ) | |||||||
Total
stockholders equity |
14,322 | 14,807 | |||||||||
Total
liabilities and stockholders equity |
$ | 21,318 | $ | 21,146 |
Years Ended December 31, |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
2004 |
|||||||||||||
Revenue
|
$ | 16,674 | $ | 15,705 | $ | 16,162 | |||||||||
Expenses: |
|||||||||||||||
Costs of
revenues |
12,762 | 14,113 | 15,905 | ||||||||||||
Costs of
revenues to related parties |
1,064 | 376 | | ||||||||||||
Sales and
marketing |
1,252 | 1,139 | 1,475 | ||||||||||||
General and
administrative |
2,359 | 2,566 | 3,489 | ||||||||||||
Reversal of
contingent tax liability |
| (979 | ) | | |||||||||||
Lease
abandonment charge |
| 537 | | ||||||||||||
Amortization
of intangibles |
| 84 | 1,032 | ||||||||||||
Total
expenses |
17,437 | 17,836 | 21,901 | ||||||||||||
Operating
loss |
(763 | ) | (2,131 | ) | (5,739 | ) | |||||||||
Interest
income and other income (expense) |
115 | 116 | 25 | ||||||||||||
Interest
expense |
(202 | ) | (236 | ) | (244 | ) | |||||||||
Loss before
income taxes |
(850 | ) | (2,251 | ) | (5,958 | ) | |||||||||
Income tax
benefit |
324 | | | ||||||||||||
Net loss
|
(526 | ) | (2,251 | ) | (5,958 | ) | |||||||||
Less: Fair
value of consideration transferred over carrying value of preferred stock |
| | (3,973 | ) | |||||||||||
Net loss
attributable to common stockholders |
$ | (526 | ) | $ | (2,251 | ) | $ | (9,931 | ) | ||||||
Income (loss)
per share of common stock (basic and diluted) |
$ | (0.07 | ) | $ | (0.44 | ) | $ | (3.48 | ) | ||||||
Weighted
average common shares and equivalents used in computing loss per sharebasic and diluted |
7,030,153 | 5,174,159 | 2,856,532 |
Additional Paid-In Capital |
Accumulated Deficit |
Employee Notes Receivable |
Total
|
|||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Preferred
Stock
|
Common
Stock
|
|||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance,
December 31, 2003 |
22 | $ | 5,899 | 2,767 | $ | 277 | $ | 441,464 | $ | (428,893 | ) | $ | (36 | ) | $ | 18,711 | ||||||||||||||||||
Net
loss |
(5,958 | ) | (5,958 | ) | ||||||||||||||||||||||||||||||
Modification of Preferred Stock |
3,828 | (2,049 | ) | 2,049 | | |||||||||||||||||||||||||||||
Conversion
of Preferred Stock to Common |
(750 | ) | (750 | ) | 750 | 75 | 675 | | ||||||||||||||||||||||||||
Repayment
of employee notes |
13 | 13 | ||||||||||||||||||||||||||||||||
Exercise
of Stock Options |
1 | | ||||||||||||||||||||||||||||||||
Employee
stock option compensation |
| | | | 33 | | | 33 | ||||||||||||||||||||||||||
Balance,
December 31, 2004 |
3,100 | 3,100 | 3,518 | 352 | 444,221 | (434,851 | ) | (23 | ) | 12,799 | ||||||||||||||||||||||||
Net
loss |
(2,251 | ) | (2,251 | ) | ||||||||||||||||||||||||||||||
Sale
of Common Stock |
2,222 | 222 | 4,034 | 4,256 | ||||||||||||||||||||||||||||||
Conversion
of Preferred Stock to Common |
(348 | ) | (348 | ) | 349 | 35 | 313 | | ||||||||||||||||||||||||||
Stock
option compensation |
| | | | 3 | | | 3 | ||||||||||||||||||||||||||
Balance,
December 31, 2005 |
2,752 | 2,752 | 6,089 | 609 | 448,571 | (437,102 | ) | (23 | ) | 14,807 | ||||||||||||||||||||||||
Net
loss |
(526 | ) | (526 | ) | ||||||||||||||||||||||||||||||
Issuance
of Restricted Stock |
72 | 7 | 83 | 90 | ||||||||||||||||||||||||||||||
Payments
to register Common Stock |
(49 | ) | (49 | ) | ||||||||||||||||||||||||||||||
Conversion
of Preferred Stock to Common |
(2,012 | ) | (2,012 | ) | 2,011 | 201 | 1,811 | | | | ||||||||||||||||||||||||
Balance,
December 31, 2006 |
740 | $ | 740 | 8,172 | $ | 817 | $ | 450,416 | $ | (437,628 | ) | $ | (23 | ) | $ | 14,322 |
Years Ended December 31, |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2006 |
2005 |
2004 |
||||||||||||
Cash flows from operating
activities
|
|||||||||||||||
Net loss
|
$ | (526 | ) | $ | (2,251 | ) | $ | (5,958 | ) | ||||||
Adjustments
to reconcile net loss to net cash used in operating activities: |
|||||||||||||||
Depreciation
and amortization |
1,095 | 1,478 | 2,626 | ||||||||||||
Bad debt
reserve expense |
| (41 | ) | 9 | |||||||||||
Reversal of
contingent tax accrual |
(324 | ) | (979 | ) | | ||||||||||
Equity
compensation |
90 | 3 | 33 | ||||||||||||
Loss on
disposition of assets |
(5 | ) | 6 | 53 | |||||||||||
Changes in
operating assets and liabilities: |
|||||||||||||||
Accounts and
notes receivable |
(1,372 | ) | (497 | ) | 82 | ||||||||||
Prepaid
expenses |
84 | 7 | (30 | ) | |||||||||||
Other assets
|
(223 | ) | (24 | ) | 9 | ||||||||||
Accounts
payable and accrued liabilities |
296 | 194 | 359 | ||||||||||||
Deferred
revenues |
986 | (297 | ) | 35 | |||||||||||
Other
liabilities |
(132 | ) | (42 | ) | (61 | ) | |||||||||
Net cash used
in operating activities |
(31 | ) | (2,443 | ) | (2,843 | ) | |||||||||
Cash flows
from investing activities |
|||||||||||||||
Software and
contract start-up costs capitalized |
(1,234 | ) | (278 | ) | (649 | ) | |||||||||
Proceeds from
the sale of property and equipment |
7 | 9 | | ||||||||||||
Collection on
notes receivable, net |
| | 101 | ||||||||||||
Purchases of
property, equipment and software and internally developed capitalized software |
(576 | ) | (745 | ) | (343 | ) | |||||||||
Net cash used
in investing activities |
(1,803 | ) | (1,014 | ) | (891 | ) | |||||||||
Cash flows
from financing activities |
|||||||||||||||
Proceeds from
lines of credit |
1,016 | | | ||||||||||||
Payments on
note payable |
(500 | ) | | | |||||||||||
Payments to
register common shares |
(49 | ) | | | |||||||||||
Proceeds from
the issuance of common stock |
| 4,256 | | ||||||||||||
Payment of
preferred stock dividends |
| | (223 | ) | |||||||||||
Net cash
provided by (used in) financing activities |
467 | 4,256 | (223 | ) | |||||||||||
Increase
(decrease) in cash and cash equivalents |
(1,367 | ) | 799 | (3,957 | ) | ||||||||||
Cash and cash
equivalents, beginning of year |
4,729 | 3,930 | 7,887 | ||||||||||||
Cash and cash
equivalents, end of year |
$ | 3,362 | $ | 4,729 | $ | 3,930 | |||||||||
Supplemental
disclosure of cash flow information: |
|||||||||||||||
Interest paid
|
$ | 59 | $ | 29 | $ | 3 | |||||||||
Non-cash
financing activities: |
|||||||||||||||
Exchange of
convertible preferred stock for new convertible preferred stock |
$ | | $ | | $ | 2,049 | |||||||||
Exchange of
convertible preferred stock for common stock |
$ | 2,011 | $ | 349 | $ | | |||||||||
Accounts
receivable applied to note and interest payable in lieu of cash |
$ | 780 | $ | 793 | $ | 799 |
2005 |
2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Net loss
attributable to common shareholders |
$ | (2,251 | ) | $ | (9,931 | ) | ||||
Stock based
compensation expense recorded under the intrinsic value method |
3 | 33 | ||||||||
Pro forma
stock based compensation expense computed under the fair value method |
(508 | ) | (1,256 | ) | ||||||
Pro forma net
loss applicable to common stock |
$ | (2,756 | ) | $ | (11,154 | ) | ||||
Loss per
share of common stock, basic and diluted: |
||||||||||
As reported
|
$ | (0.44 | ) | $ | (3.48 | ) | ||||
Pro forma
|
$ | (0.53 | ) | $ | (3.91 | ) |
As of December 31, |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
2004 |
|||||||||||||
Options
|
1,193,542 | 1,366,843 | 1,076,359 | ||||||||||||
Restricted
Stock |
154,000 | | | ||||||||||||
Warrants
|
7,229,186 | 7,229,186 | 1,114,071 | ||||||||||||
Preferred
stock |
740,401 | 2,751,658 | 3,100,000 | ||||||||||||
Total common
shares if converted |
9,317,129 | 11,347,687 | 5,290,430 |
Percent
of 2006 Revenue |
Percent
of December 31, 2006 Accounts and notes receivable |
||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Customer
A |
17% | 28% |
|||||||||
Customer
B |
22% | 10% |
|||||||||
Customer
C |
24% | 30% |
(Table in thousands) December 31, |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Useful Lives (Years) |
2006 |
2005 |
|||||||||||||
Computer
equipment |
3 | $ | 5,006 | $ | 4,700 | ||||||||||
Office
furniture and equipment |
7 | 351 | 377 | ||||||||||||
Leasehold
improvements |
3-5 | 175 | 171 | ||||||||||||
Computer
software |
1-3 | 2,572 | 2,421 | ||||||||||||
8,104 | 7,669 | ||||||||||||||
Less
accumulated depreciation and amortization |
(6,554 | ) | (5,943 | ) | |||||||||||
$ | 1,550 | $ | 1,726 |
(Table in thousands) December 31, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
||||||||||
Salaries,
benefits and payroll taxes |
$ | 253 | $ | 413 | |||||||
Taxes
|
61 | 385 | |||||||||
Other
|
369 | 245 | |||||||||
683 | 1,043 | ||||||||||
Less portion
classified as long-term liabilities |
(174 | ) | (406 | ) | |||||||
Accrued
liabilities |
$ | 509 | $ | 637 |
(Table in thousands) |
||||||
---|---|---|---|---|---|---|
Balance at
January 1, 2005 |
$ | 929 | ||||
Interest cost
|
54 | |||||
Service cost
|
58 | |||||
Benefits paid
|
(142 | ) | ||||
Balance at
December 31, 2005 |
899 | |||||
Interest cost
|
54 | |||||
Service cost
|
58 | |||||
Benefits paid
|
(119 | ) | ||||
Balance at
December 31, 2006 |
$ | 892 |
(Table in thousands) |
||||||
---|---|---|---|---|---|---|
2007
|
$ | 124 | ||||
2008
|
92 | |||||
2009
|
93 | |||||
2010
|
93 | |||||
2011
|
82 | |||||
Thereafter
|
408 |
(Table in thousands) December 31, |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
||||||||||
Deferred tax
assets: |
|||||||||||
Allowance for
doubtful accounts |
$ | 2 | $ | 2 | |||||||
Post
employment retirement benefits |
312 | 315 | |||||||||
Net operating
and capital loss carryforwards |
53,349 | 53,228 | |||||||||
Accrued
expenses and deferred revenues |
538 | 181 | |||||||||
Deferred rent
|
87 | | |||||||||
Other
|
2 | | |||||||||
Total
deferred tax assets |
54,290 | 53,726 | |||||||||
Deferred tax
liabilities: |
|||||||||||
Capitalized
software development costs |
(44 | ) | (81 | ) | |||||||
Other, net
|
(557 | ) | (239 | ) | |||||||
Total
deferred tax liabilities |
(601 | ) | (320 | ) | |||||||
Deferred tax
asset before valuation allowance |
53,689 | 53,406 | |||||||||
Valuation
allowance |
(53,689 | ) | (53,406 | ) | |||||||
Net deferred
tax asset |
$ | | $ | |
(Table in thousands) Years Ended December 31, |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
2005 |
2004 |
|||||||||||||
Amount
computed at statutory rate |
$ | (298 | ) | $ | (788 | ) | $ | (2,085 | ) | ||||||
Change in
valuation allowance |
283 | 779 | 2,065 | ||||||||||||
Reversal of
contingent tax liability |
(324 | ) | | | |||||||||||
Other
permanent differences |
15 | 9 | 20 | ||||||||||||
Total income
tax benefit |
$ | (324 | ) | $ | | $ | |
Stock Options |
Warrants |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number of Shares |
Weighted Average Exercise Price |
Number of Shares |
Weighted Average Exercise Price |
||||||||||||||||
Outstanding
at January 1, 2004 |
936,527 | $ | 16.89 | 160,652 | $ | 42.65 | |||||||||||||
Granted
|
359,700 | 2.33 | 1,020,000 | 5.50 | |||||||||||||||
Exercised
|
(699 | ) | 3.43 | | | ||||||||||||||
Forfeited
|
(61,011 | ) | 8.25 | | | ||||||||||||||
Expired
|
(158,158 | ) | 22.63 | (66,581 | ) | 63.86 | |||||||||||||
Outstanding
at December 31, 2004 |
1,076,359 | 11.67 | 1,114,071 | 7.26 | |||||||||||||||
Granted
|
448,050 | 1.91 | 6,169,166 | 2.55 | |||||||||||||||
Exercised
|
| | | | |||||||||||||||
Forfeited
|
(84,196 | ) | 4.16 | | | ||||||||||||||
Expired
|
(73,370 | ) | 30.00 | (54,051 | ) | 36.04 | |||||||||||||
Outstanding
at December 31, 2005 |
1,366,843 | 7.95 | 7,229,186 | 3.03 | |||||||||||||||
Granted
|
| | | | |||||||||||||||
Exercised
|
| | | | |||||||||||||||
Forfeited
|
(103,400 | ) | 3.38 | | | ||||||||||||||
Expired
|
(69,901 | ) | 41.42 | | | ||||||||||||||
Outstanding
at December 31, 2006 |
1,193,542 | $ | 6.38 | 7,229,186 | $ | 3.03 |
Options/Warrants
exercisable at December 31,
|
Number of Options |
Weighted Avg. Exercise Price of Options |
Warrants |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2004
|
758,828 | $ | 15.30 | 1,114,071 | ||||||||||
2005
|
1,366,843 | 7.95 | 4,451,409 | |||||||||||
2006
|
1,193,542 | 6.38 | 4,451,409 |
Outstanding
Options
|
Exercisable
Options
|
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Exercise
Price Range
|
Number
|
Weighted Average Remaining Contractual Life |
Weighted Average Exercise Price |
Number
|
Weighted Average Exercise Price |
||||||||||||||||
$ 1.72
2.24 |
285,900 | 8.62 | $ | 1.79 | 285,900 |
$ 1.79 |
|||||||||||||||
$ 2.25 3.25 |
392,388 | 8.12 | $ | 2.31 | 392,388 |
$ 2.31 |
|||||||||||||||
$ 3.26
10.00 |
307,521 | 4.37 | $ | 6.81 | 307,521 |
$ 6.81 |
|||||||||||||||
$10.00
87.50 |
207,733 | 1.88 | $ | 19.75 | 207,733 |
$19.75 |
(Table in thousands) |
||||||
---|---|---|---|---|---|---|
2007
|
$ | 369 | ||||
2008
|
318 | |||||
2009
|
309 | |||||
2010
|
155 | |||||
2011
|
| |||||
$ | 1,151 |
(Table in thousands, except per share
amounts) |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2006 |
|||||||||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|||||||||||||||||||
Revenue
|
$ | 3,918 | $ | 4,114 | $ | 4,354 | $ | 4,288 | $ | 16,674 | |||||||||||||
Operating
expenses |
4,359 | 4,360 | 4,349 | 4,369 | 17,437 | ||||||||||||||||||
Operating
income (loss) |
(441 | ) | (246 | ) | 5 | (81 | ) | (763 | ) | ||||||||||||||
Interest
expense and other income, net |
(21 | ) | (20 | ) | (12 | ) | (34 | ) | (87 | ) | |||||||||||||
Net loss
before taxes |
(462 | ) | (266 | ) | (7 | ) | (115 | ) | (850 | ) | |||||||||||||
Tax benefit
|
| | 324 | | 324 | ||||||||||||||||||
Net (loss)
income |
$ | (462 | ) | $ | (266 | ) | $ | 317 | $ | (115 | ) | $ | (526 | ) | |||||||||
Net (loss)
income per share of common stock (basic and diluted) |
$ | (.08 | ) | $ | (.04 | ) | $ | .04 | $ | (.01 | ) | $ | (.07 | ) |
2005 |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|||||||||||||||||||
Revenue
|
$ | 4,126 | $ | 4,011 | $ | 3,843 | $ | 3,725 | $ | 15,705 | |||||||||||||
Operating
expenses |
5,037 | 4,284 | 4,332 | 4,183 | 17,836 | ||||||||||||||||||
Operating
loss |
(911 | ) | (273 | ) | (489 | ) | (458 | ) | (2,131 | ) | |||||||||||||
Interest
expense and other income, net |
(47 | ) | (52 | ) | (22 | ) | 1 | (120 | ) | ||||||||||||||
Net loss
|
$ | (958 | ) | $ | (325 | ) | $ | (511 | ) | $ | (457 | ) | $ | (2,251 | ) | ||||||||
Net loss per
share of common stock (basic and diluted) |
$ | (0.26 | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.08 | ) | $ | (0.44 | ) |
Item
9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item
9A. |
Controls and Procedures |
Item
9B. |
Other Information |
Item
10. |
Directors, Executive Officers and Corporate Governance |
Item
11. |
Executive Compensation |
Item
12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item
13. |
Certain Relationships and Related Transactions, and Director Independence |
Item
14. |
Principal Accounting Fees and Services |
Item
15. |
Exhibits, Financial Statement Schedules |
(a) |
The following consolidated financial statements of Healthaxis Inc. are included in Item 8: |
Page |
||||||
---|---|---|---|---|---|---|
Report of
Independent Registered Public Accounting Firm |
37 | |||||
Consolidated
Balance Sheets - December 31, 2006 and 2005 |
38 | |||||
Consolidated
Statements of Operations - Years ended December 31, 2006, 2005, and 2004 |
39 | |||||
Consolidated
Statements of Changes in Stockholders Equity - Years ended December 31, 2006, 2005, and 2004 |
40 | |||||
Consolidated
Statements of Cash Flows - Years ended December 31, 2006, 2005, and 2004 |
41 | |||||
Notes to
Consolidated Financial Statements |
42 |
(2) |
Financial Statement Schedules: |
(3) |
Exhibits: |
Healthaxis Inc. |
||||||
Date: March 27,
2007 |
By: /s/John M. Carradine John M. Carradine Chief Executive Officer (Duly Authorized Officer) |
Signature |
Title |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ James W.
McLane James W. McLane |
Chairman of the Board of Directors |
March 27, 2007 |
||||||||
/s/ John M.
Carradine John M. Carradine |
Chief Executive Officer (principal executive officer) and Director |
March 27, 2007 |
||||||||
/s/ Ronald K.
Herbert Ronald K. Herbert |
Chief Financial Officer (principal financial and accounting officer) |
March 27, 2007 |
||||||||
/s/ James J.
Byrne James J. Byrne |
Director |
March 27, 2007 |
||||||||
/s/ John W.
Coyle John W. Coyle |
Director |
March 27, 2007 |
||||||||
/s/ Thomas L.
Cunningham Thomas L. Cunningham |
Director |
March 27, 2007 |
||||||||
/s/ Adam J.
Gutstein Adam J. Gutstein |
Director |
March 27, 2007 |
||||||||
/s/ Kevin F.
Hickey Kevin F. Hickey |
Director |
March 27, 2007 |
||||||||
/s/ Barry L.
Reisig Barry L. Reisig |
Director |
March 27, 2007 |
Exhibit Number |
Description of Exhibits |
|||||
---|---|---|---|---|---|---|
3.1 |
Amended and Restated Articles of Incorporation of the Registrant. Incorporated by reference to Exhibit 3.1 to Registrants Form 8-K dated
January 30, 2001. |
|||||
3.2 |
Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of Healthaxis Inc. dated June 30, 2004. Incorporated
by reference to Exhibit 10.2 to registrants Form 10-Q for the quarterly period ended June 30, 2004. |
|||||
3.3 |
Articles of Amendment to the Companys Amended and Restated Articles of Incorporation, incorporated by reference to Exhibit 3.1 of Form
8-K filed on August 19, 2003. |
|||||
3.4 |
Second Amended and Restated Bylaws dated February 25, 2004. Incorporated by reference to Exhibit 3.5 to registrants Form 10-K for the
year ended December 31, 2003. |
|||||
4.1 |
Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of Healthaxis Inc. dated June 30, 2004. (see Exhibit
3.2 above). |
|||||
4.2 |
Specimen Stock Certificate, incorporated by reference to Exhibit 4.1 of Form 8-K filed on August 19, 2003. |
|||||
10.1 |
Preferred Stock Modification Agreement dated May 12, 2004 between Healthaxis Inc. and certain Preferred Shareholders. Incorporated by
reference from Appendix A to the Registrants Definitive Proxy Statement dated June 1, 2004. |
|||||
10.2 |
Investor Rights Agreement dated as of June 30, 2004 between Healthaxis Inc. and certain Preferred Stockholders. Incorporated by reference to
Exhibit 10.3 to Registrants Form 10-Q for the quarterly period ended June 30, 2004. |
|||||
10.3 |
Registration Rights Agreement dated as of June 30, 2004 between Healthaxis Inc. and certain Preferred Shareholders. Incorporated by reference
to Exhibit 10.4 to Registrants Form 10-Q for the quarterly period ended June 30, 2004. |
Exhibit Number |
Description of Exhibits | |||||
---|---|---|---|---|---|---|
10.4 |
Form of Warrant dated as of June 30, 2004 and executed by Healthaxis Inc. in favor of Brown Simpson Partners I, Ltd. (490,306 common shares),
OTAPE LLC (58,072 common shares), LB I Group Inc. (387,117 common shares) and The Pennsylvania State University (64,505 common shares). Incorporated by
reference to Exhibit 10.5 to Registrants Form 10-Q for the quarterly period ended June 30, 2004. |
|||||
10.5 |
Stock and Warrant Purchase Agreement dated as of February 23, 2005, between Healthaxis Inc. and Tak Investments, Inc. Incorporated by
reference to Exhibit 10.1 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.6 |
Warrant (#1) executed by Healthaxis Inc. in favor of Tak Investments, Inc. for up to 3,333,333 common shares. Incorporated by reference to
Exhibit 10.2 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.7 |
Warrant (#2) executed by Healthaxis Inc. in favor of Tak Investments, Inc. for up to 1,388,889 common shares. Incorporated by reference to
Exhibit 10.3 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.8 |
Warrant (#3) executed by Healthaxis Inc. in favor of Tak Investments, Inc. for up to 1,388,889 common shares. Incorporated by reference to
Exhibit 10.4 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.9 |
Investor Rights Agreement dated as of May 13, 2005 between Healthaxis Inc. and Tak Investments, Inc. Incorporated by reference to Exhibit 10.5
to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.10 |
Registration Rights Agreement dated as of May 13, 2005 between Healthaxis Inc. and Tak Investments, Inc. Incorporated by reference to Exhibit
10.6 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.11 |
Remote Resourcing Agreement dated as of May 13, 2005 between Healthaxis, Ltd. and Healthcare BPO Partners, L.P. Incorporated by reference to
Exhibit 10.7 to Registrants Form 8-K/A filed October 10, 2006. |
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10.12 |
Renewal Promissory Note of the Company dated as of July 31, 2006 payable to HealthMarkets Inc., f/k/a UICI, incorporated by reference to
Exhibit 10.1 to Registrants Form 8-K filed August 1, 2006 |
Exhibit Number |
Description of Exhibits | |||||
---|---|---|---|---|---|---|
10.13 |
Loan and Security Agreement between the Company and Silicon Valley Bank dated August 14, 2006, incorporated by reference to Exhibit 10.1 to
Registrants Form 8-K filed August 17, 2006. |
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10.14 |
Sublease Agreement effective April 1, 2005 between BearingPoint, Inc. and Registrant. Incorporated by reference to Exhibit 10.1 to
Registrants Form 10-Q for the quarterly period ended March 31, 2005. |
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10.15 |
Rights Agreement dated as of November 13, 1998 between American Online, Inc. and Registrant. Incorporated by reference to Exhibit 10.23 to
Registrants Form 10-K for the year ended December 31, 2004. |
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10.16+ |
Amendment and Restatement of the Registrants Stock Option Plan for Directors, effective July 16, 1996. Incorporated by reference to
Exhibit (10)(JJ) to Registrants Annual Report on Form 10-K for the year ended December 31, 1996. |
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10.17+ |
Amended and Restated Healthaxis.com 1998 Stock Option Plan. Incorporated by reference to Exhibit 10.5 to Registrants Form 10-K for the
period ended December 31, 2004. |
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10.18+ |
Registrants 2000 Stock Option Plan. Incorporated by reference to Exhibit (10)(PPP) to Registrants Annual Report on Form 10-K for
the year ended December 31, 1999. |
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10.19+ |
Healthaxis Inc. 2005 Stock Incentive Plan. Incorporated by reference to Appendix A to Registrants definitive Proxy Statement filed June
1, 2005. |
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10.20+ |
First Amendment to the Healthaxis Inc. 2005 Stock Incentive Plan, incorporated by reference to Exhibit 10.1 to Registrants Form 10-Q for
the quarterly period ended June 30, 2006. |
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10.21+ |
Form of Restricted Stock Award for Directors under the Healthaxis Inc. 2005 Stock Incentive Plan. Incorporated by reference to Exhibit 10.1 to
the Registrants Form 8-K filed May 15, 2006. |
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10.22+ |
Form of Restricted Stock Award for Officers and other Employees under the Healthaxis Inc. 2005 Stock Incentive Plan. Incorporated by reference
to Exhibit 10.2 to the Registrants Form 8-K filed May 15, 2006. |
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10.23+ |
Director Compensation Arrangements (adopted January 16, 2007), filed herewith. |
Exhibit Number |
Description of Exhibits | |||||
---|---|---|---|---|---|---|
10.24+ |
Change in Control Employment Agreement between James. W. McLane and Registrant dated as of January 1, 2002. Incorporated by reference to
Exhibit 10.66 to Registrants Annual Report on Form 10-K for the period ended December 31, 2001. |
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10.25+ |
Change in Control Employment Agreement between John Carradine and Registrant dated as of January 1, 2002. Incorporated by reference to Exhibit
10.67 to Registrants Annual Report on Form 10-K for the period ended December 31, 2001. |
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10.26+ |
Change in Control Employment Agreement between Jonathan B. Webb and Registrant dated as of January 1, 2002. Incorporated by reference to
Exhibit 10.69 to Registrants Annual Report on Form 10-K for the period ended December 31, 2001. |
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10.27+ |
First Amendment to Change in Control Employment Agreement between James W. McLane and Registrant effective January 1, 2003. Incorporated by
reference to Exhibit 10.77 to Registrants Annual Report on Form 10-K for the period ended December 31, 2002. |
|||||
10.28+ |
First Amendment to Change in Control Employment Agreement between John M. Carradine and Registrant effective January 1, 2003. Incorporated by
reference to Exhibit 10.78 to Registrants Annual Report on Form 10-K for the period ended December 31, 2002. |
|||||
10.29+ |
First Amendment to Change in Control Employment Agreement between Jonathan B. Webb and Registrant effective January 1, 2003. Incorporated by
reference to Exhibit 10.79 to Registrants Annual Report on Form 10-K for the period ended December 31, 2002. |
|||||
10.30+ |
Second Amendment to Change in Control Employment Agreement dated May 13, 2005 between Healthaxis, Ltd. and James W. McLane. Incorporated by
reference to Exhibit 10.8 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.31+ |
Second Amendment to Change in Control Employment Agreement dated May 13, 2005 between Healthaxis, Ltd. and John M. Carradine. Incorporated by
reference to Exhibit 10.9 to Registrants Form 8-K/A filed October 10, 2006. |
|||||
10.32+ |
Second Amendment to Change in Control Employment Agreement dated May 13, 2005 between Healthaxis, Ltd. and J. Brent Webb. Incorporated by
reference to Exhibit 10.10 to Registrants Form 8-K/A filed October 10, 2006. |
Exhibit Number |
Description of Exhibits | |||||
---|---|---|---|---|---|---|
10.33+ |
Employment Agreement between Registrant and Larry Thompson. Incorporated by reference to Exhibit 10.1 to Registrants Form 8-K filed May
18, 2005. |
|||||
10.34+ |
Employment Agreement between Registrant and Ronald K. Herbert, incorporated by reference to Exhibit 10.34 to Registrants Form 10-K for
the year ended December 31, 2005. |
|||||
10.35+ |
Oral Agreement between Registrant and James W. McLane dated November 19, 2005, modifying terms of Mr. McLanes Change in Control
Agreement, incorporated by reference to Exhibit 10.35 to Registrants Form 10-K for the year ended December 31, 2005. |
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21.1 |
Subsidiaries of Registrant. (a) Healthaxis.com, Inc. (b) Healthaxis Managing Partner, LLC. (c) Healthaxis Limited Partner, LLC (d) Healthaxis, Ltd. (e) Healthaxis Imaging Services, LLC. (f) Satellite Image Systems (Jamaica) Limited |
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23.1 |
Consent of McGladrey and Pullen, LLP. |
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24.1 |
Power of Attorney (see signature page) |
|||||
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
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31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
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32.1 |
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith. |
1. |
I have reviewed this annual report on Form 10-K of Healthaxis Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
Healthaxis other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f) for Healthaxis and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of Healthaxis disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in Healthaxis internal control over financial reporting that occurred during Healthaxis most recent fiscal quarter (Healthaxis fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Healthaxis internal control over financial reporting; and |
5. |
Healthaxis other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Healthaxis auditors and the audit committee of Healthaxis board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Healthaxis ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in Healthaxis internal control over financial reporting. |
By: |
/s/
John M. Carradine John M. Carradine Chief Executive Officer |
1. |
I have reviewed this annual report on Form 10-K of Healthaxis Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
Healthaxis other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a 15(f) and 15d 15(f) for Healthaxis and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Healthaxis, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of Healthaxis disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in Healthaxis internal control over financial reporting that occurred during Healthaxis most recent fiscal quarter (Healthaxis fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Healthaxis internal control over financial reporting; and |
5. |
Healthaxis other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Healthaxis auditors and the audit committee of Healthaxis board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Healthaxis ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in Healthaxis internal control over financial reporting. |
By:/s/ Ronald K. Herbert Ronald K. Herbert Chief Financial Officer |