SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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|_| Preliminary Proxy Statement
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|_| Definitive Proxy Statement
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PATIENT INFOSYSTEMS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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(1) Amount Previously Paid: $856 (2) Form, Schedule or Registration
Statement No.: Schedule 14A
(3) Filing Party: Patient Infosystems, Inc. (4) Date Filed: May 15, 2003
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This supplement ("Supplement") updates and supplements certain information
provided in the Proxy Statement ("Proxy Statement") for the Special Meeting of
Stockholders which was originally scheduled for December 9, 2003 and has been
adjourned until December 31, 2003. At the Special Meeting, our stockholders will
be asked to consider, among other things, a proposal to approve an amendment to
our Certificate of Incorporation to increase our authorized capital stock so
that we may complete our acquisition ("Acquisition") of substantially all of the
assets of American CareSource Corporation ("ACS"). Stockholders should carefully
review this Supplement and the Proxy Statement. The information in this
Supplement replaces any inconsistent information in the Proxy Statement.
You can vote your shares by completing and returning the proxy card
included with your Proxy Statement. You can revoke a proxy at any time prior to
its exercise at the adjourned Special Meeting by following the instructions in
the Proxy Statement.
Recent Developments
ACS has received written notification of the termination of contractual
relations from Pinnacol Assurance, which is the largest volume provider to ACS.
The termination of this contract will result in a significant reduction in ACS'
revenues. ACS' revenues from Pinnacol Assurance was as follows during the years
ended December 31, 2001 and 2002, respectively, and during the six months ended
June 30, 2003:
Year Ended Year Ended Six Months Ended
December 31, 2001 December 31, 2002 June 30, 2003
---------------- ------------- ------------- ------------- ------------- -------------
Percentage of Percentage of Percentage of
Amount Total Revenue Amount Total Revenue Amount Total Revenue
---------------- ------------- ------------- ------------- ------------- -------------
$1,163,041 45.7% $2,786,409 28.9% $1,936,799 40.5%
ACS has a limited number of customers, a few of which account for a substantial
portion of its business. During the last six months, ACS has received notice of
the termination of contracts from customers representing in excess of 56% of
ACS' revenues during the six months ended June 30, 2003.
During the last six months, ACS has received written notification of the
termination of contractual relations from Pinnacol Assurance and two of its
other customers which in the aggregate accounted for over 51% of ACS' revenues
during the fiscal year ended December 31, 2002 and accounted for over 56% of
ACS' revenues during the six months ended June 30, 2003. The termination of
these contracts will result in a significant reduction of ACS' revenues.
Although a variety of reasons may be provided for the termination of each of the
customer agreements, the termination of such an extensive amount of customer
business may reflect a substantial level of customer dissatisfaction with the
services provided by ACS. Although Patient Infosystems believes that it can
provide assistance to ACS and that as a combined company, ACS will be able to
provide better services, no assurance can be given that more customers will not
terminate their relationships with ACS following the closing of the Acquisition.
In addition, ACS generally does not have long-term contracts with its other
customers. Significant declines in the level of use of ACS services by one or
more of its remaining customers could have a material adverse effect on ACS'
business and results of operations. Additionally, an adverse change in the
financial condition of any of these customers, including an adverse change as a
result of a change in governmental or private reimbursement programs, could have
a material adverse effect on its business.
Decrease in Number of Shares to be Issued to ACS
As consideration for substantially all of ACS' assets, we had agreed to
issue 18,000,000 shares of our common stock to ACS (1,500,000 shares after
giving effect to the 1 for 12 reverse stock split which is also discussed in the
Proxy Statement). As a result of, among other things, the recent developments
disclosed above, we have agreed with ACS that we will issue only 13,200,000
shares of our common stock (1,100,000 shares after giving effect to the 1 for 12
reverse stock split) to ACS upon closing of the Acquisition. To the extent that
fewer shares of our common stock will be issued, there will be a corresponding
decrease in total stockholders' equity. In reviewing the information provided in
the Proxy Statement, stockholders should consider the decrease in consideration
provided to ACS and the corresponding reduction in pro forma total stockholders'
equity from $1,919,014 to $1,247,014 as a result of the reduction in the
purchase consideration.