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| Claimsnet.Com, Inc. |
| 12801 North Central Expressway, Dallas, TX 75243 * (972) 458-1701 |
| Business Description | The company is an electronic commerce company engaged in healthcare transaction processing for the medical and dental industries by means of the Internet. |
| Offering Information Company has | |||
| Trading As | CLAI (NASSCM) | Industry | Internet (SIC 7374) |
| Type of Stock Offered | Common Shares | Filing Date | 02/19/1999 |
| Domestic Shares Offered | 2,500,000 | Offer Date | 04/06/1999 |
| Foreign Shares Offered | 0 | Filing Range | $7.00 - $9.00 |
| Company Shares | 2,500,000 | Offer Price | $8.00 |
| Selling Shrhldrs Shares | 0 | Gross Spread | $0.660 |
| Gross Proceeds | $20,000,000 | Selling | $0.360 |
| Expenses | - - | Reallowance | $0.100 |
| Post-IPO Shares | 6,250,000 | Employees | 16 |
| Primary Underwriting Group | ||
| Underwriter Name | Participation | Underwriter Phone |
| Cruttenden Roth Incorporated | Lead Manager | (800) 678-9147 |
| ISG Capital Markets, LLC | Co-manager | (212) 896-5600 |
| Income Statement and Cash Flow Summary | |||||||
| Prior Audited Income |
Latest Unaudited Income | ||||||
| Full Year Audited Figures | - - Months Ending | ||||||
| Figures in U.S. millions except per share data | 12/31/1996 | 12/31/1997 | 12/31/1998 | ||||
| Revenues | - | - | 0.000 | 0.082 | 0.155 | - | - |
| Income from Oper. | - | - | - | - | - | - | - |
| Net Income | - | - | -0.306 | -2.782 | 4.662 | - | - |
| E.P.S | - | - | -0.130 | -0.980 | -1.410 | - | - |
| Revenue Growth (%) | - | - | - | 89.266 | - | ||
| Net Income Growth (%) | - | - | - | - | - | ||
| Oper. Profit Margin (%) | - | - | - | - | - | - | - |
| Net Profit Margin (%) | - | - | - | - | 3,014.79 | - | - |
| Cash Flow - Oper. | - | - | - | ||||
| Cash Flow - Inv. | - | - | - | ||||
| Cash Flow - Fin. | - | - | - | ||||
| Balance Sheet Summary and Financial Ratios | |||||
| Balance sheet as of: 12/31/1998 | Financial Ratios | ||||
| Total Assets | 4.32 | Current Assets | 2.05 | Current Ratio | - |
| Total Liab. | 8.19 | Current Liab. | - | Debt Ratio | 189.39% |
| Total Equity | -3.86 | Working Cap. | - | Debt to Equity Ratio | - |
| Cash | - | Return on Assets | 107.85% | ||
| Use Of Proceeds |
The proceeds from the proposed offering will be used to repay indebtedness, including indebtedness to affiliates, to increase marketing and research and development, to acquire additional capital equipment, and for general corporate purposes and working capital. |
| Legal Counsel Registrar Auditor | |
| Issuer's Law Firm | Brock, Fensterstock, Silverstein, McAuliffe & Wade |
| Bank's Law Firm | Greenberg Traurig Hoffman Lipoff Rosen & Quentel |
| Registrar/Transfer Agent | Continental Stock Transfer & Trust Co |
| Auditor | King Griffin & Adamson P.C. |
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| Industry Competition |
The medical claims processing industry is highly competitive. The Company competes with, and expects to continue to compete with, numerous national, regional, and local companies, many of which have significantly larger operations, greater financial, marketing, human, and other resources than the Company. Major companies in the healthcare claims processing industry include: Envoy/NEIC, Inc., HBO & Company; National Data Corporation; and QuadraMed Corporation. The Company anticipates that competition will arise in the processing of claims on the Internet. There can be no assurance that the Company will successfully compete in any market in which it conducts or may conduct operations. Certain segments of the medical and dental claims processing industry are not currently suited to the use of inpatient electronic claims processing. Among such segments are psychiatry and surgery, each of which requires substantial documentation in addition to the claim to be submitted. In these market segments, the Company believes that it is not currently able to compete with existing potential competitors and, accordingly, the Company has designed its business plan to address other market segments. |
| Business Plan |
The Company's business strategy is: (i) to aggressively market electronic claims processing services to outpatient healthcare providers, including clinics, hospitals, physicians, dentists, and other outpatient service providers; (ii) to gain access to healthcare providers and to foster familiarity and dependence upon the Company's services by waiving its monthly electronic claims processing services subscription fee through at least June 30, 1998 while collecting a processing fee from commercial medical and dental payors for delivering claims electronically; (iii) to expand the services offered by the Company to include additional transaction processing functions, such as eligibility, HMO encounter forms, and practice management functions in order to diversify sources of revenue; (iv) to acquire and integrate electronicclaims processing companies that enable the Company to accelerate its entry into the inpatient hospital claims market; and (v) to license its claims processing technology for other applications, including stand-alone purposes, Internet systems, private label use, and OEMs. There can be no assurance that any of the Company's business strategies will succeed or that any of its business objectives will be met with any success. |
| Principal Shareholders | ||
| Name of Shareholder | % Owned Before | % Owned After |
| Bo W. Lycke | 48.80 | 29.20 |
| Robert H. Brown, Jr. | 18.80 | 11.20 |
| Ward L. Bensen | 15.10 | 10.40 |
| American Medical Finance, Inc. | 8.80 | 5.30 |
| Healthcare Reform Investment Trust Plc. | 5.80 | 3.50 |
| Note: represents ownership of 5% or more prior to the offering. | ||
| Executive Officers and Directors | ||
| Officer Name | Officer Title | Age |
| Bo. W. Lycke | Chairman of the Board of Directors, President, Chief Executive Officer and Director | 51 |
| Terry A. Lee | Executive Vice President of Marketing and Technology | 43 |
| Mark W. Patterson | Vice President and Chief Financial Officer | 44 |
| James Anderson | Vice President of Marketing | 37 |
| Randall S. Lindner | Vice President of Technology | 37 |
| Additional Underwriter Compensation |
| Warrant to purchase 270,000 shares/units at $270.00 per share/unit. |