As
filed
with the Securities and Exchange Commission on December 9, 2005
Registration
No. 333-129265
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
NETSMART
TECHNOLOGIES, INC.
(Exact
Name of Registrant as Specified in its Charter)
|
|
Delaware
(State
or Other Jurisdiction of Incorporation or Organization)
|
13-3680154
(I.R.S.
Employer Identification No.)
|
3500
Sunrise Highway, Great River, NY 11739 (631)
968-2000
(Address,
Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s
Principal Executive Offices)
James
L. Conway, CEO
Netsmart
Technologies, Inc.
3500
Sunrise Highway
Great
River, New York 11739
(631)
968-2000
(Name,
Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent
for Service)
Copy
to:
Nancy
D. Lieberman, Esq.
Kramer,
Coleman, Wactlar & Lieberman, P.C.
100
Jericho Quadrangle
Jericho,
New York 11753
(516)
822-4820
Approximate
date of commencement of proposed sale to the public:
As soon
as practicable after this registration statement becomes effective.
If
the
only securities being registered on this form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. o
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If
this
form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. o
CALCULATION
OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
Title
of Each Class of
Securities
To Be Registered
|
|
Amount
to be Registered
|
|
Proposed
Maximum Aggregate Price per Unit
|
|
Proposed
Maximum Aggregate Offering Price
|
|
Amount
of Registration Fee
|
|
Common
Stock, Par
value $.01 per share
|
|
|
945,735
|
|
$
|
14.76(1
|
)
|
$
|
13,959,049
|
|
$
|
1494
|
|
Common
Stock, Par
value $.01 per share (2)
|
|
|
147,003
|
|
$
|
11.00(3
|
)
|
$
|
1,617,033
|
|
$
|
173
|
|
Total
Registration Fee
|
|
|
|
|
|
|
|
|
|
|
$
|
1667
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Estimated
solely for purposes of calculating the registration fee pursuant
to Rule
457(c) promulgated under the Securities Act of 1933, based upon the
average of the high and low sale prices of our common stock on October
24,
2005.
|
(2) |
Issuable
upon exercise of warrants to purchase shares of our common stock
issued in
connection with our private placement of units consisting of common
stock
and warrants which closed on October 14, 2005, as described in the
selling
securityholders section of this registration
statement.
|
(3) |
The
registration fee for such securities has been calculated based
on the
exercise price of such warrants in accordance with Rule 457(g)
promulgated
under the Securities Act of 1933.
|
Pursuant
to Rule 416 of the Securities Act of 1933, this registration statement also
relates to such additional indeterminate number of shares of common stock as
may
become issuable by reason of stock splits, dividends and similar adjustments,
in
accordance with the antidilution provisions of the warrants.
The
registrant hereby amends this registration statement on such date or dates
as
may be necessary to delay its effective date until the registrant shall file
a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information contained in this preliminary prospectus is not complete and may
be
changed. These securities may not be sold until the registration statement
filed
with the Securities and Exchange Commission is declared effective. This
preliminary prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or
sale
is not permitted.
SUBJECT
TO COMPLETION, DATED DECEMBER 9, 2005
PRELIMINARY
PROSPECTUS
NETSMART
TECHNOLOGIES, INC.
1,092,738
Shares of Common Stock
This
prospectus relates to the disposition, from time to time, of up to 1,092,738
shares of our common stock by the holders of these shares named in this
prospectus, whom we refer to as the “selling securityholders,” and their
transferees.
The
shares may be offered directly, through agents on behalf of the selling
securityholders and their transferees, or through underwriters or
dealers.
The
shares being offered by the selling securityholders were issued by us in three
transactions:
o |
In
a private placement of units consisting of shares of our common stock
and
warrants to purchase shares of our common stock on October 14, 2005,
we
issued 490,000 shares of our common stock and warrants to purchase
up to
an aggregate of 147,003 shares of our common stock to the investors
and
the placement agent in that private offering.
|
o |
In
connection with our acquisition by merger of CMHC Systems, Inc. on
September 28, 2005, we issued an aggregate 435,735 shares of our
common
stock to former securityholders of CMHC.
|
o |
In
connection with our acquisition of the business of ContinuedLearning
on
April 28, 2005, we issued 20,000 shares of our common
stock.
|
We
are
registering the shares to provide the selling securityholders with freely
tradable securities.
We
will
not receive any of the proceeds from the sale of the shares. We will receive
the
exercise price upon exercise of the warrants. We have agreed to bear the
expenses in connection with the registration and sale of the shares, except
for
selling commissions. We estimate these expenses to be $40,000.
Our
common stock is currently traded on the NASDAQ SmallCap Market under the symbol
“NTST.” On December 2, 2005, the closing price for our common stock, as reported
by NASDAQ, was $13.20 per share.
The
securities offered in this prospectus involve a high degree of
risk.
You
should carefully read and consider the “Risk Factors,” commencing
on
Page
3, for information that should be considered in
determining
whether
to purchase any of the securities.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
ILLINOIS
RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS, NOR HAS THE SECRETARY
OF STATE OF ILLINOIS OR THE STATE OF LLINOIS PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date
of this prospectus is ____________, 2005
Risk
Factors
|
3
|
Forward-looking
Statements
|
6
|
Use
of Proceeds
|
6
|
Price
Range of Our Common Stock
|
7
|
Dividend
Policy
|
7
|
Selling
Securityholders
|
7
|
Plan
of Distribution
|
10
|
Experts
|
10
|
Legal
Matters
|
10
|
Where
You Can Find More Information
|
10
|
As
used
in this prospectus, the terms “we,” “us,” “our,” and “Netsmart” mean
Netsmart Technologies, Inc. and its subsidiaries, unless otherwise
specified.
We
are
incorporated under the laws of the state of Delaware. Our executive offices
are
located at 3500 Sunrise Highway, Great River, New York 11739 and our telephone
number is (631) 968-2000.
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN
THIS PROSPECTUS AND IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. NO ONE HAS BEEN
AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THESE
SECURITIES ARE NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT
PERMITTED.
YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF SUCH
DOCUMENTS.
The
securities offered in this prospectus are speculative and involve a high degree
of risk. Only those persons able to lose their entire investment should purchase
any of the securities. Prior to making an investment decision, you should
carefully read this prospectus and consider, along with other matters referred
to herein, the following risk factors.
Because
we are particularly dependent upon government contracts, any decrease in funding
for entitlement programs could result in decreased
revenue.
We
market
our health information systems principally to behavioral health facilities,
many
of which are operated by state and local government entities and include
entitlement programs. During 2004, 2003 and 2002 we generated 49%, 57% and
52%,
respectively, of our revenue from contracts that are directly or indirectly
with
government agencies. Government agencies generally have the right to cancel
certain contracts at their convenience. Our ability to generate business from
government agencies is affected by funding for entitlement programs, and our
revenue would decline if state agencies reduce this funding.
Changes
in government regulation of the health care industry may adversely affect our
revenue, operating expenses and profitability.
Our
business is based on providing systems for behavioral and public health
organizations in both the public and private sectors. The federal and state
governments have adopted numerous regulations relating to the health care
industry, including regulations relating to the payments to health care
providers for various services, and our systems are designed to provide
information based on these requirements. The adoption of new regulations can
have a significant effect upon the operations of health care providers,
particularly those operated by state agencies. Furthermore, changes in
regulations in the health care field may force us to modify our health
information systems to meet any new record-keeping or other requirements and
may
impose added costs on our business. If that happens, we may not be able to
generate revenues sufficient to cover the costs of developing the modifications.
In addition, any failure of our systems to comply with new or amended
regulations could result in reductions in our revenue and profitability.
If
we are not able to take advantage of technological advances, we may not be
able
to remain competitive and our revenue may decline.
Our
customers require software which enables them to store, retrieve and process
very large quantities of data and to provide them with instantaneous
communications among the various data bases. Our business requires us to take
advantage of recent advances in software, computer and communications
technology. This technology has been developing at rapid rates in recent years,
and our future may be dependent upon our ability to use and develop or obtain
rights to products utilizing such technology. New technology may develop in
a
manner which may make our software obsolete. Our inability to use or develop
new
technology would have a significant adverse effect upon our
business.
We
may have difficulty competing with larger companies that offer similar services,
which may result in decreased revenue.
Our
customers in the human services market include entitlement programs, managed
care organizations and specialty care facilities which have a need for access
to
information over a distributed data network. Each of the software industry,
in
general, and the health information software business in particular, is highly
competitive. Other companies have the staff and resources to develop competitive
systems. We may not be able to compete successfully with such competitors.
The
health information systems
business is served by a number of major companies and a larger number of smaller
companies. We believe that price competition is a significant factor in our
ability to market our health information systems and services, and our inability
to offer competitive pricing may impair our ability to market our systems and
services.
If
we are unable to protect our intellectual property, our competitors may gain
access to our technology, which could harm our ability to successfully compete
in our market.
We
have
no patent protection for our proprietary software. We rely on copyright
protection for our software and non-disclosure and secrecy agreements with
employees and third parties to whom we disclose information. This protection
does not prevent our competitors from independently developing products similar
or superior to our products and technologies. To further develop our services
or
products, we may need to acquire licenses for intellectual property. These
licenses may not be available on commercially reasonable terms, if at all.
Our
failure to protect our proprietary technology or to obtain appropriate licenses
could have a material adverse effect on our business, operating results or
financial condition. Since our business is dependent upon our proprietary
products, the unauthorized use or disclosure of this information could harm
our
business.
We
cannot
guarantee that in the future, third parties will not claim that we infringed
their intellectual property. Asserting our rights or defending against third
party claims could involve substantial costs and diversion of resources, which
could materially and adversely affect our financial condition.
Government
programs may suggest or mandate initiatives that could impact our ability to
sell our products.
A
major
initiative being pushed by President Bush and the Department of Health and
Human
Services is the National Electronic Health Record. The federal government is
promoting this platform and technology which is based on supplying “freeware” to
any agency who desires; however, support is not supplied. This initiative
competes with the private for profit Health Information Systems vendor community
and could adversely affect our ability to sell our products and our financial
results.
The
covenants in our loan agreement restrict our financial and operational
flexibility, including our ability to complete additional acquisitions, invest
in new business opportunities, pay down certain indebtedness or declare
dividends.
Our
term
loan agreement contains covenants that restrict, among other things, our ability
to borrow money, make particular types of investments, including investments
in
our subsidiaries, make other restricted payments, swap or sell assets, merge
or
consolidate, or make acquisitions. An event of default under our loan agreement
could allow our lender to declare all amounts outstanding to be immediately
due
and payable. We have pledged substantially all of our consolidated assets to
secure the debt under our loan agreement. If the amounts outstanding under
the
loan agreement were accelerated, the lender could proceed against those
consolidated assets. Any event of default, therefore, could have a material
adverse effect on our business. The loan agreement also requires us to maintain
specified financial ratios. Our ability to meet these financial ratios can
be
affected by events beyond our control, and we cannot assure you that we will
continue to meet those ratios. We also may incur future debt obligations that
might subject us to restrictive covenants that could affect our financial and
operational flexibility or subject us to other events of default.
We
have
only paid one cash dividend after getting our lender’s consent and we do not
anticipate paying any further cash dividends on our common stock in the
foreseeable future. We presently intend to retain future earnings, if any,
in
order to provide funds for use in the operation and expansion of our business.
Consequently, investors cannot rely on the payment of dividends to increase
the
value of their investment in us. In addition, our loan agreement prohibits
us
from paying cash dividends without the prior consent of the lender.
Our
growth may be limited if we cannot make acquisitions.
A
part of
our business strategy is to acquire other businesses that are related to our
current business. These acquisitions may be made with cash or securities or
a
combination of cash and securities. To the extent that we require cash, we
may
have to borrow the funds or issue equity, which could dilute our earnings or
the
book value per share of our common stock. Our stock price may adversely affect
our ability to make acquisitions for equity or to raise funds for acquisitions
through the issuance of equity securities. If we fail to make any acquisitions,
our future growth may be limited. As of the date hereof, we do not have any
agreement or understanding, either formal or informal, as to any
acquisition.
We
may be unable to effectively integrate CMHC Systems, Inc. or any other
acquisitions, which may disrupt or have a negative impact on our
business.
In
September 2005, we consummated a merger with CMHC Systems, Inc., pursuant to
which CMHC has become our wholly-owned subsidiary. We may have difficulty
integrating CMHC’s personnel and operations with our own and we may have the
same difficulty with any other acquisitions we may make. In addition, the key
personnel of any acquired business may not be willing to work for us, and its
officers may exercise their rights to terminate their employment with us. We
cannot predict the effect expansion may have on our core business. Regardless
of
whether we are successful in making an acquisition, the negotiations could
disrupt our ongoing business, distract our management and employees and increase
our expenses.
Because
we are dependent on our management, the loss of key executive officers could
disrupt our business and our financial performance could
suffer.
Our
business is largely dependent upon our senior executive officers, Messrs. James
L. Conway, our chief executive officer, Gerald O. Koop, our president, and
Anthony F. Grisanti, our chief financial officer. Although we have employment
agreements with these officers, the employment agreements do not guarantee
that
the officers will continue as our employees, and each of these officers has
the
right to terminate his employment on 90 days notice. Our agreements with Messrs.
Conway and Grisanti are scheduled to expire on December 31, 2006. In addition,
Mr. Koop’s employment agreement is scheduled to expire on December 31, 2005,
following which he is expected to continue to work with us for a six-year period
pursuant to our Executive Retirement, Non-Competition & Consulting Plan
dated April 1, 2004. Our business may be adversely affected if any key
management personnel or other key employees left our employ.
The
employment contracts with our executive officers and provisions of Delaware
law
may deter or prevent a takeover attempt and may reduce the price investors
might
be willing to pay for our common stock.
The
employment contracts between us and each of James Conway, Gerald Koop and
Anthony Grisanti provide that in the event there is a change in control of
our
company, the employee has the option to terminate his employment agreement.
Upon
such termination, each of Messrs. Conway, Koop and Grisanti has the right to
receive a lump sum payment equal to his compensation for a 36 month
period.
In
addition, Delaware law restricts business combinations with stockholders who
acquire 15% or more of a company’s common stock without the consent of the
company’s board of directors.
These
provisions could deter or prevent a takeover attempt and may also reduce the
price that investors might be willing to pay in the future for shares of our
common stock.
Any
issuance of preferred stock may adversely effect the voting power and equity
interest of our common stock.
Our
certificate of incorporation gives our board of directors the right to create
new series of preferred stock. As a result, the board of directors may, without
stockholder approval, issue preferred stock with voting, dividend, conversion,
liquidation or other rights which could adversely affect the voting power and
equity interest of the holders of our common stock. The preferred stock, which
could be issued with the right to more than one vote per share, could be
utilized as a method of discouraging, delaying or preventing a change of
control. The possible impact on takeover attempts could adversely affect the
price of our common stock. Although we have no present intention to issue any
shares of preferred stock or to create any series of preferred stock, we may
issue such shares in the future. If we issue preferred stock in a manner which
dilutes the voting rights of the holders of our common stock, our listing on
The
Nasdaq SmallCap Market may be impaired.
Shares
may be issued pursuant to options and warrants which may adversely affect
the
market price of our common stock.
We
may
issue stock upon the exercise of options to purchase shares of our common
stock
pursuant to our long term incentive plans, under which options to purchase
961,967 shares were outstanding at December 1, 2005 and upon the exercise
of the
warrants registered by the registration statement of which this prospectus
forms
a part. The exercise of these options and the sale of the underlying shares
of
common stock may have an adverse effect upon the price of our common
stock.
Statements
in this prospectus contain "forward-looking statements" within the meaning
of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements that express our intentions,
beliefs, expectations, strategies, predictions or any other statements relating
to our future activities or other future events or conditions. These statements
are based on current expectations, estimates and projections about our business
based, in part, on assumptions made by management. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may, and probably will, differ materially from what is expressed or
forecasted in the forward-looking statements due to numerous factors, including
those described above and those risks discussed from time to time in this
prospectus, including the risks described in this prospectus under "Risk
Factors," and those described under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in other documents which we
file
with the Securities and Exchange Commission. In addition, such statements could
be affected by risks and uncertainties related to product demand, market and
customer acceptance, competition, government regulations and requirements,
pricing and development difficulties, as well as general industry and market
conditions and growth rates, and general economic conditions. Any
forward-looking statements speak only as of the date on which they are made,
and
we do not undertake any obligation to update any forward-looking statement
to
reflect unanticipated events or circumstances after the date of this
prospectus.
The
proceeds from the sale of the shares by the selling securityholders will belong
to the individual selling securityholder. We will not receive any of the
proceeds from the sale of the shares. We will, however, receive the exercise
price of the warrants upon their exercise. If all of the warrants are exercised
in full, we will receive gross proceeds of $1,617,033. We cannot assure you
that
any warrants will be exercised. We expect to utilize any amounts that we receive
upon the exercise of the warrants for new product development, sales and
marketing expenditures, potential acquisitions and general corporate purposes.
Our management will have broad discretion to determine the use of any
proceeds.
Our
common stock is traded on The Nasdaq SmallCap Market under the symbol NTST.
Set
forth below is the reported high and low sales prices of our common stock for
each quarterly period set forth below:
Quarter
Ended
|
|
High
|
|
Low
|
|
|
|
|
|
|
|
December
31, 2005 (through December 2nd)
|
|
$
|
15.00
|
|
$
|
11.99
|
|
September
30, 2005
|
|
|
12.50
|
|
|
8.94
|
|
June
30, 2005
|
|
|
9.74
|
|
|
8.50
|
|
March
31, 2005
|
|
|
10.27
|
|
|
8.28
|
|
|
|
|
|
|
|
|
|
December
31, 2004
|
|
|
9.25
|
|
|
7.30
|
|
September
30, 2004
|
|
|
10.00
|
|
|
6.07
|
|
June
30, 2004
|
|
|
13.85
|
|
|
7.11
|
|
March
31, 2004
|
|
|
18.70
|
|
|
11.49
|
|
|
|
|
|
|
|
|
|
December
31, 2003
|
|
|
19.85
|
|
|
8.45
|
|
September
30, 2003
|
|
|
10.90
|
|
|
5.15
|
|
June
30, 2003
|
|
|
5.53
|
|
|
4.00
|
|
March
31, 2003
|
|
|
6.00
|
|
|
3.53
|
|
As
of
December 1, 2005, there were approximately 2,900 beneficial owners of our
common
stock. The closing price of our common stock was $13.20 per share on December
2,
2005. These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not represent actual
transactions.
In
July
2003, with our lender’s consent, we paid a one-time cash dividend of $.10 per
share. We do not anticipate paying additional cash dividends on our common
stock
in the foreseeable future. We intend to retain any future earnings for the
development and expansion of our business and for acquisitions. In addition,
we
are a party to a loan agreement which prohibits us from paying cash dividends
without the prior consent of our lender.
We
have
agreed to register 490,000 shares of common stock and 147,003 shares of common
stock underlying warrants issued to certain investors and the underwriter
in our
private placement offering consummated on October 14, 2005. The warrants
have an
exercise price of $11.00 per share.
Griffin
Securities, Inc. acted as placement agent in connection with our private
placement. As compensation, Griffin received cash placement agent fees and
warrants to purchase 24,500 shares of our common stock, which is equal to
5% of
the common stock issued to the investors that they introduced to us. Griffin’s
warrant has the same terms as the investors’ warrants. Griffin is selling the
shares of common stock issuable upon the exercise of its warrant.
We
have
also agreed to register 435,735 shares of common stock issued to former
securityholders of CMHC Systems, Inc. and 20,000 shares of common stock issued
to the owner of ContinuedLearning. The registration of these shares is required
by the terms of those acquisitions.
None
of
the selling stockholders, nor any of their respective officers or directors,
has
had any position, office or other material relationship with us or our
predecessors or affiliates within the past three years, except as described
in
the preceding paragraphs. None of the selling securityholders, other than
Griffin Securities, is a registered broker-dealer or an affiliate of a
broker-dealer.
We
have
agreed to pay all of the expenses in connection with the registration and
sale
of common stock (other than underwriting discounts and selling commissions)
and
the fees and expenses of counsel and other advisors to the selling
securityholders. We will not receive any proceeds from the sale of any of
the
securities by the selling securityholders, except for the exercise price
paid in
connection with any exercise of warrants.
The
information included below is based upon information provided by the selling
securityholders. Because the selling securityholders may offer all, some,
or
none of their shares, the “after sale” column of the table assumes the sale of
all of their shares offered by this prospectus; however, we do not know that
this will actually occur. Information concerning the selling securityholders
may
change from time to time. Any such changed information will be set forth
in
amendments or supplements to this prospectus, if and when required.
|
|
|
|
|
|
|
|
Selling
Securityholder
|
|
Shares
owned
prior
to sale
|
|
Number
of Shares
offered
hereby
|
|
Amount
and nature of beneficial
ownership
of common stock
after
sale of the securities
|
|
|
|
|
|
|
|
Number
|
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
Lance
Malvin and Partners, Inc.(1)
|
|
|
2,553
|
|
|
2,553
|
|
|
0
|
|
|
0
|
|
Mark
Ahn(1)
|
|
|
2,553
|
|
|
2,553
|
|
|
0
|
|
|
0
|
|
Mosaix
Ventures LP (2)
|
|
|
371,875
|
|
|
371,875
|
|
|
0
|
|
|
0
|
|
Ranjan
Lal(3)
|
|
|
61,980
|
|
|
61,980
|
|
|
0
|
|
|
0
|
|
Solomon
Strategic Holdings, Inc. (4)
|
|
|
5,104
|
|
|
5,104
|
|
|
0
|
|
|
0
|
|
Sterling
Securities Int’l Ltd.(5)
|
|
|
10,205
|
|
|
10,205
|
|
|
0
|
|
|
0
|
|
The
Tail Wind Fund Ltd. (6)
|
|
|
61,252
|
|
|
61,252
|
|
|
0
|
|
|
0
|
|
Investment
Strategies Fund LP (7)
|
|
|
20,418
|
|
|
20,418
|
|
|
0
|
|
|
0
|
|
Cordillera
Fund, LP (8)
|
|
|
76,563
|
|
|
76,563
|
|
|
0
|
|
|
0
|
|
Griffin
Securities, Inc. (9)
|
|
|
24,500
|
|
|
24,500
|
|
|
0
|
|
|
0
|
|
Sheree
Graves
|
|
|
20,000
|
|
|
20,000
|
|
|
0
|
|
|
0
|
|
John
Paton
|
|
|
347,192
|
|
|
347,192
|
|
|
0
|
|
|
0
|
|
R.
Douglas Paton
|
|
|
4,969
|
|
|
4,969
|
|
|
0
|
|
|
0
|
|
George
Foster
|
|
|
4,969
|
|
|
4,969
|
|
|
0
|
|
|
0
|
|
William
Morse
|
|
|
452
|
|
|
452
|
|
|
0
|
|
|
0
|
|
Selling
Securityholder
|
|
Shares
owned
prior
to sale
|
|
Number
of Shares
offered
hereby
|
|
Amount
and nature of beneficial
ownership
of common stock
after
sale of the securities
|
|
|
|
|
|
|
|
Number
|
|
Percent |
|
|
|
|
|
|
|
|
|
|
|
Finova
Mezzanine Capital Inc. (10)
|
|
|
18,580
|
|
|
18,580
|
|
|
0
|
|
|
0
|
|
Commerce
Capital, L.P. (11)
|
|
|
7,960
|
|
|
7,960
|
|
|
0
|
|
|
0
|
|
Alistair
John Deacon
|
|
|
11,328
|
|
|
11,328
|
|
|
0
|
|
|
0
|
|
668534
Alberta, Ltd. (12)
|
|
|
14,478
|
|
|
14,478
|
|
|
0
|
|
|
0
|
|
Paul
H. Earley
|
|
|
21,092
|
|
|
21,092
|
|
|
0
|
|
|
0
|
|
Mary
Sweeney
|
|
|
2,397
|
|
|
2,397
|
|
|
0
|
|
|
0
|
|
Stephen
E. Richard
|
|
|
959
|
|
|
959
|
|
|
0
|
|
|
0
|
|
Michael
J. Glaser
|
|
|
1,119
|
|
|
1,119
|
|
|
0
|
|
|
0
|
|
Debra
Butler
|
|
|
240
|
|
|
240
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Camille
Froidevaux has dispositive and voting power with respect to
the shares
owned by the selling securityholder, the warrants owned by
the selling
securityholder and the shares underlying the warrants owned
by the selling
securityholder. The shares offered by the selling securityholder
include
511 shares of common stock underlying warrants issued to the
selling
securityholder in our private placement consummated on October
14, 2005.
|
(2)
|
Ranjan
Lal has dispositive and voting power with respect to the shares
owned by
the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
74,375 shares of common stock underlying warrants issued to the
selling
securityholder in our private placement consummated on October
14, 2005.
|
(3)
|
The
shares offered by the selling securityholder include 12,396 shares
of
common stock underlying warrants issued to the selling securityholder
in
our private placement consummated on October 14, 2005.
|
(4)
|
Andrew
P. Mackellar has dispositive and voting power with respect to
the shares
owned by the selling securityholder, the warrants owned by the
selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
1,021 shares of common stock underlying warrants issued to the
selling
securityholder in our private placement consummated on October
14, 2005.
|
(5)
|
Chris
Bonvini has dispositive and voting power with respect to the
shares owned
by the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
2,041 shares of common stock underlying warrants issued to the
selling
securityholder in our private placement consummated on October
14, 2005.
|
(6)
|
David
Crook has dispositive and voting power with respect to the shares
owned by
the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
12,251 shares of common stock underlying warrants issued to the
selling
securityholder in our private placement consummated on October
14, 2005.
|
(7)
|
Matthew
Shefler has dispositive and voting power with respect to the
shares owned
by the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
4,084 shares of common stock underlying warrants issued to the
selling
securityholder in connection with our private placement consummated
on
October 14, 2005.
|
(8)
|
Jim
Andrew has dispositive and voting power with respect to the shares
owned
by the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
include
15,313 shares of common stock underlying warrants issued to the
selling
securityholder in connection with our private placement consummated
on
October 14, 2005.
|
(9)
|
Adrian
Stecyk has dispositive and voting power with respect to the shares
owned
by the selling securityholder, the warrants owned by the selling
securityholder and the shares underlying the warrants owned by
the selling
securityholder. The shares offered by the selling securityholder
consist
of 24,500 shares of common stock underlying warrants issued to
the selling
securityholder in connection with our private placement consummated
on
October 14, 2005.
|
(10)
|
Patrick
M. Cornell and Jeffrey D. Weiss share dispositive and voting
power with
respect to the shares owned by the selling securityholder.
|
(11)
|
Andy
Higgins and Rudy Ruark share dispositive and voting power with
respect to
the shares owned by the selling securityholder.
|
(12)
|
John
Truwhitt has dispositive and voting power with respect to the
shares owned
by the selling securityholder.
|
Our
shares are traded on the Nasdaq SmallCap Market under the symbol “NTST.” On
behalf of the selling securityholders, we are registering the shares of common
stock issued or issuable to the selling securityholders. The distribution of
the
shares by the selling securityholders is not subject to any underwriting
agreement. The shares of common stock may be sold in one or more transactions
at
fixed prices, at prevailing market prices at the time of sale, at prices related
to the prevailing market prices, at varying prices determined at the time of
sale, or at negotiated prices. These sales may be effected at various times
in
one or more of the following transactions, or in other kinds of transactions:
o |
transactions
on The Nasdaq Stock Market or on any national securities exchange
or U.S.
inter-dealer system of a registered national securities association
on
which the warrants and our preferred stock and common stock may be
listed
or quoted at the time of sale;
|
o |
in
the over-the-counter market;
|
o |
in
private transactions and transactions otherwise than on these exchanges
or
systems or in the over-the-counter
market;
|
o |
in
connection with short sales of the
shares;
|
o |
by
pledge to secure or in payment of debt and other obligations;
|
o |
through
the writing of options, whether the options are listed on an options
exchange or otherwise;
|
o |
in
connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions
in
standardized or over-the-counter options; or
|
o |
through
a combination of any of the above transactions.
|
The
selling securityholders and their respective successors, including their
transferees, pledgees or donees or their successors, may sell common stock
directly to purchasers or through underwriters, broker-dealers or agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling securityholders or the purchasers. These discounts, concessions
or commissions as to any particular underwriter, broker-dealer or agent may
be
in excess of those customary in the types of transactions involved.
The
selling securityholders and any broker-dealers, agents or underwriters that
participate with the selling securityholders in the distribution of the issued
and outstanding shares of common stock or the shares of stock issuable upon
exercise of warrants may be deemed to be "underwriters" within the meaning
of
the Securities Act, in which event any commissions received by these
broker-dealers, agents or underwriters and any profits realized by the selling
securityholders on the resales of the securities may be deemed to be
underwriting commissions or discounts under the Securities Act. If the selling
securityholders are deemed to be underwriters, the selling securityholders
may
be subject to certain statutory and regulatory liabilities, including
liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act
and
Rule 10b-5 under the Securities Exchange Act of 1934.
In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.
The
shares are not being offered in any jurisdiction where the offer is not
permitted.
The
consolidated financial statements of Netsmart Technologies, Inc., and subsidiary
appearing in our company’s Annual Report on Form 10-K for the year ended
December 31, 2004, have been audited by Marcum & Kliegman LLP, our
independent registered public accounting firm, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon
reports given upon the authority of such firm as experts in accounting and
auditing.
The
consolidated financial statements of CMHC Systems, Inc. and subsidiary as
of
March 31, 2005 and 2004, and for the years then ended, have been incorporated
by
reference herein in reliance upon the report of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing. The audit report contains
an
explanatory paragraph that states that the Company’s consolidated balance sheet
as of March 31, 2004 and the related consolidated statements of operations,
stockholders’ deficit and cash flows for the year then ended have been restated.
The
reviewed financial statements and schedules of CMHC Systems, Inc. and subsidiary
as of June 30, 2005 and 2004, and for the three month periods then ended,
have
been incorporated by reference herein in reliance upon the report of Saltz,
Shamis & Goldfarb, Inc., independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as
experts
in accounting and review services
The
validity of the securities offered hereby will be passed upon for us by Kramer,
Coleman, Wactlar & Lieberman, P.C., Jericho, New York.
Government
Filings.
We are
subject to the information reporting requirements of the Securities Exchange
Act
of 1934, as amended. As such, we file annual, quarterly and special reports,
proxy statements and other documents with the Securities and Exchange
Commission. These reports, proxy statements and other documents may be inspected
and copied at the public reference facilities maintained by the SEC at 100
F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information on their public reference facilities. In addition,
the
SEC maintains an Internet site that contains reports, proxy and information
statements and other information regarding companies, including our company,
that file electronically with the SEC at the address
“http://www.sec.gov.”
Stock
Market.
Our
common stock is listed on The Nasdaq SmallCap Market. Material filed by us
can
also be inspected and copied at the offices of NASDAQ at 1735 K Street, N.W.,
Washington, D.C. 20006.
Netsmart.
We will
provide you without charge, upon your request, a copy of any or all reports,
proxy statements and other documents filed by us with the SEC, as well as any
or
all of the documents incorporated by reference in this prospectus or the
registration statement (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to us at our executive
offices:
Netsmart
Technologies, Inc.
3500
Sunrise Highway
Great
River, NY 11739
Attn:
James L. Conway
Telephone
number: (631) 968-2000
www.csmcorp.com
We
are
incorporated under the laws of the state of Delaware.
Information
Incorporated by Reference.
The SEC
allows us to “incorporate by reference” the information we file with the SEC,
which means that:
· |
incorporated
documents are considered part of this
prospectus,
|
· |
we
can disclose important information to you by referring you to those
documents, and
|
· |
information
that we file after the date of this prospectus with the SEC will
automatically update and supersede information contained in this
prospectus and the registration
statement.
|
We
incorporate by reference the documents listed below and any future filings
we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act until this offering has been completed:
· |
Our
annual report on Form 10-K for the fiscal year ended December 31,
2004
filed with the SEC on March 18,
2005;
|
· |
Our
quarterly report on Form 10-Q for the quarter ended March 31, 2005
filed
with the SEC on May 11, 2005;
|
· |
Our
quarterly report on Form 10-Q for the quarter ended June 30, 2005
filed
with the SEC on August 10, 2005;
|
· |
Our
quarterly report on Form 10-Q for the quarter ended September 30,
2005
filed with the SEC on November 11,
2005;
|
· |
Our
proxy statement on Schedule 14A filed with the SEC on May 26, 2005;
|
· |
Our
current report on Form 8-K filed with the SEC on May 3,
2005;
|
· |
Each
of the two current reports on Form 8-K filed with the SEC on June
21,
2005;
|
· |
Our
current report on Form 8-K filed with the SEC on July 14,
2005;
|
· |
Our
current report on Form 8-K filed with the SEC on September 22,
2005;
|
· |
Our
current report on Form 8-K filed with the SEC on September 30,
2005;
|
· |
Our
current report on Form 8-K filed with the SEC on October 14,
2005;
|
· |
Our
current report on Form 8-K filed with the SEC on October 17,
2005;
|
· |
Our
current report on Form 8-K/A filed with the SEC on December 8,
2005;
and
|
· |
The
description of our common stock contained in our registration statement
on
Form 8-A, declared effective on August 13,
1996.
|
You
should rely only on the information contained or incorporated by reference
in
this prospectus and in any accompanying prospectus supplement. No one has been
authorized to provide you with different information.
You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of such
documents.
No
person has been authorized in connection with the offering made hereby
to
give any information or to make any representation not contained
in this
prospectus and, if given or made, such information or representation
must
not be relied upon as having been authorized by us, any selling
securityholder or any other person. This prospectus does not constitute
an
offer to sell or a solicitation of an offer to buy any of the securities
offered hereby to any person or by anyone in any jurisdiction in
which it
is unlawful to make such offer or solicitation. Neither the delivery
of
this prospectus nor any sale made hereunder shall, except as otherwise
contemplated by the rules and regulations of the Securities and Exchange
Commission, create any implication that the information contained
herein
is correct as of any date subsequent to the date
hereof.
|
|
1,092,738
Shares
of
COMMON
STOCK
NETSMART
TECHNOLOGIES, INC.
PROSPECTUS
______________,
2005
|
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. |
Other
Expenses of Issuance and
Distribution.
|
The
estimated expenses of the distribution, all of which are to be borne by us,
are
as follows:
|
|
|
|
|
SEC
Registration Fee
|
|
$
|
1,667
|
|
Accounting
Fees and Expenses
|
|
$
|
10,000
|
|
Legal
Fees and Expenses
|
|
$
|
25,000
|
|
Miscellaneous
|
|
$
|
3,333
|
|
Total
|
|
$
|
40,000
|
|
Item
15. |
Indemnification
of Directors and Officers.
|
Under
the
Delaware General Corporation Law, a corporation may indemnify any director,
officer, employee or agent against expense (including attorneys’ fees),
judgments, fines and amounts paid in settlement in connection with any specified
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests
of
the corporation, and, with respect to any criminal proceeding, had no reasonable
cause to believe that his or her conduct was unlawful.
Article
EIGHTH of our Restated Certificate of Incorporation provides for indemnification
of our directors and officers to the fullest extent permitted by the Delaware
General Corporation Law.
We
also
maintain directors and officers’ liability insurance. This insurance covers any
person who has been or is an officer or director of us or any of our
subsidiaries for all expense, liability and loss (including attorneys’ fees,
investigation costs, judgments, fines, penalties and amounts paid or to be
paid
in settlement) actually and reasonably incurred by such person in connection
with such action, suit or proceeding, net of the deductible.
Number
|
|
Description
|
|
|
|
4.1
|
|
Specimen
Common Stock Certificate - incorporated by reference to Exhibit
4.1 to
Registration Statement on Form S-3 (333-104565), filed on April
16,
2003
|
4.2
|
|
Form
of Warrant*
|
4.3
|
|
Form
of Subscription
Agreement between Netsmart Technologies, Inc. and Private Placement
purchasers, including amendment. |
5
|
|
Opinion
of Kramer, Coleman, Wactlar & Lieberman, P.C. (included in consent
filed as Exhibit 23.2)
|
10.1
|
|
Letter
Agreement between Griffin Securities, Inc. and Netsmart Technologies,
Inc.
dated as of August 9, 2005*
|
10.2
|
|
Letter
Agreement between Griffin Securities, Inc. and Netsmart Technologies,
Inc.
dated as of October 11, 2005*
|
23.1
|
|
Consent
of Marcum & Kliegman LLP
|
23.2
|
|
Consent
and opinion of Kramer, Coleman, Wactlar & Lieberman,
P.C.
|
23.3
|
|
Consent
of KPMG LLP |
23.4
|
|
Consent
of Saltz,
Shamis & Goldfarb |
24
|
|
Powers
of Attorney (set forth on the signature page of this registration
statement on Form S-3)*
|
___________
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers or controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of
such issue.
The
undersigned registrant hereby undertakes:
(1) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement;
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
provided,
however,
that
paragraphs (1)(i) and (1)(ii) above shall not apply if the information required
to be included in a post-effective amendment by such clauses is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are
incorporated by reference in the registration statement.
(2) That,
for
the purpose of determining any liability under the Securities Act of 1933,
each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide
offering
thereof; and
(3) To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act
of 1934 (and, where applicable, each filing of an employee benefit plan’s annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is
incorporated by reference in the registration statement shall be deemed to
be a
new registration statement relating to the securities offered therein, and
the
offering of such securities at that time shall be deemed to be the initial
bona
fide
offering
thereof.
The
undersigned registrant hereby undertakes to deliver or cause to be delivered
with the prospectus, to each person to whom the prospectus is sent or given,
the
latest annual report to securityholders that is incorporated by reference in
the
prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not
set
forth in the prospectus, to deliver or cause to be delivered to each person
to
whom the prospectus is sent or given, the latest quarterly report to
securityholders that is specifically incorporated by reference in the prospectus
to provide such interim financial information.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this amendment to registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized
in the
city of Islip, State of New York, this 8th day of December, 2005.
|
|
|
|
NETSMART
TECHNOLOGIES, INC. |
|
|
|
|
By: |
/s/ James
L. Conway |
|
|
|
James
L. Conway
Chief Executive
Officer
|
POWER
OF ATTORNEY
Pursuant
to the requirements of the Securities Act of 1933, this amendment to
registration statement has been signed on December 8, 2005 by the following
persons in the capacities indicated.
/s/
James L. Conway
|
|
Chief
Executive Officer and Director
|
James
L. Conway
|
|
(Principal
Executive Officer)
|
|
|
|
/s/
Gerald Koop
|
|
President
and Director
|
Gerald
O. Koop
|
|
|
|
|
|
/s/
Anthony F. Grisanti
|
|
Chief
Financial Officer, Treasurer
|
Anthony
F. Grisanti
|
|
and
Secretary (Principal Accounting Officer)
|
|
|
and Principal
Financial
Officer) |
|
|
|
/s/
John F. Philips
|
|
Vice
President and Director
|
John
F. Phillips
|
|
|
|
|
|
|
|
Director
|
Yacov
Shamash
|
|
|
|
|
|
/s/
Joseph C. Sicinski
|
|
Director
|
Joseph
C. Sicinski
|
|
|
|
|
|
/s/
Francis J. Calcagno
|
|
Director
|
Francis
J. Calcagno
|
|
|
|
|
|
/s/
John S.T. Gallagher
|
|
Director
|
John
S.T. Gallagher
|
|
|
*
By
James C. Conway, Attorney-in-Fact
Exhibit
Index
Number
|
|
Description
|
|
|
|
4.1
|
|
Specimen
Common Stock Certificate - incorporated by reference to Exhibit
4.1 to
Registration Statement on Form S-3 (333-104565), filed on April
16,
2003
|
|
|
|
4.2
|
|
Form
of Warrant*
|
|
|
|
4.3
|
|
Form
of Subscription Agreement between Netsmart Technologies, Inc. and
Private
Placement purchasers, including amendment
|
|
|
|
5
|
|
Opinion
of Kramer, Coleman, Wactlar & Lieberman, P.C. (included in consent
filed as Exhibit 23.2)
|
|
|
|
10.1
|
|
Letter
Agreement between Griffin Securities, Inc. and Netsmart Technologies,
Inc.
dated as of August 9, 2005*
|
|
|
|
10.2
|
|
Letter
Agreement between Griffin Securities, Inc. and Netsmart Technologies,
Inc.
dated as of October 11, 2005*
|
|
|
|
23.1
|
|
Consent
of Marcum & Kliegman LLP
|
|
|
|
23.2
|
|
Consent
and opinion of Kramer, Coleman, Wactlar & Lieberman,
P.C.
|
|
|
|
23.3
|
|
Consent
of KPMG LLP
|
|
|
|
23.4
|
|
Consent
of Saltz, Shamis & Goldfarb
|
|
|
|
24
|
|
Powers
of Attorney (set forth on the signature page of this registration
statement on Form S-3)*
|