Back to GetFilings.com
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission File No. 0-20260
Commission File No. 1-11440
INTEGRAMED AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1150326
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Manhattanville Road
Purchase, New York 10577
(Address of principal executive offices) (Zip Code)
(914) 253-8000
(Registrant's telephone number, including area code)
----------------------------
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filer pursuant to Item
405 of Regulation S-K (17 CRF ss. 229.405) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form 10-K
or any amendment to this Form 10-K [X]
Aggregate market value of voting stock (Common Stock, $.01 par value) held
by non-affiliates of the Registrant was approximately $9.0 million on March 26,
2001 based on the closing sales price of the Common Stock on such date.
The aggregate number of shares of the Registrant's Common Stock, $.01 par
value, outstanding was approximately 2,993,486 on March 26, 2001.
================================================================================
DOCUMENTS INCORPORATED BY REFERENCE
See Part III hereof with respect to incorporation by reference from the
Registrant's definitive proxy statement for the fiscal year ended December
31, 2000 to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 and the Exhibit Index hereto.
PART I
ITEM 1. Business
Company Overview
IntegraMed America, Inc. (the "Company") offers products and services to
patients, providers, payors and pharmaceutical manufacturers in the fertility
industry. The IntegraMed Network is comprised of twenty-two fertility centers in
major markets across the United States, a pharmaceutical subsidiary, a financing
subsidiary, the Council of Physicians and Scientists, and a leading fertility
portal (www.integramed.com). Seventeen fertility centers have access to the
Company's FertilityDirect(TM) Program (as discussed under Selling Additional
FertilityDirect Contracts on page 4). Five of the fertility centers are
designated as "Reproductive Science Centers(R)" and as such, have access to the
Company's FertilityDirect Program in addition to being provided with a full
range of services including: (i) administrative services, including accounting
and finance, human resource functions, and purchasing of supplies and equipment;
(ii) access to capital; (iii) marketing and sales; (iv) integrated information
systems; (v) assistance in identifying best clinical practices; and (vi)
laboratory services (collectively, "Business Services").
Industry -- Reproductive Medicine
Reproductive medicine encompasses several medical disciplines that focus on
male and female reproductive systems and processes. Within the field of
reproductive medicine, there are several subspecialties, such as obstetrics and
gynecology, fertility, and reproductive endocrinology. There are many reasons
why couples have difficulty conceiving, and accurate identification of a
specific cause of infertility can be time consuming, expensive and requires
access to specialized diagnostic and treatment services. Most gynecologists do
not have access to these resources and therefore often bypass detailed
diagnostic testing. Instead, they often provide initial medical treatment of
infertility, without extensive diagnosis, by prescribing a drug called
clomiphene citrate, which helps to correct ovulatory problems. This treatment is
fairly inexpensive and frequently resolves the problem. It is generally
recommended that women receive this drug for three to six ovulatory cycles. If
pregnancy has not occurred, referral should be made to a fertility specialist
who can offer more advanced treatments. Fertility specialists are gynecologists
who perform more sophisticated medical and surgical fertility diagnosis and
treatments. Reproductive endocrinology refers to the diagnosis and treatment of
all hormonal problems that lead to abnormal reproductive function or have an
effect on the reproductive organs. Reproductive endocrinologists are physicians
who have completed four years of residency training in obstetrics and gynecology
and have at least two years of additional training in an approved subspecialty
fellowship program.
Conventional fertility services include diagnostic tests performed on the
female, such as endometrial biopsy, laparoscopy/hysteroscopy examinations and
hormone screens, and diagnostic tests performed on the male, such as semen
analysis and tests for sperm antibodies. Depending on the results of the
diagnostic tests performed, conventional treatment options may include, among
others, fertility drug therapy, artificial insemination and fertility surgeries.
These conventional fertility services are not classified as assisted
reproductive technology ("ART") services. Current types of ART services include
in vitro fertilization, gamete intrafallopian transfer, zygote intrafallopian
transfer, tubal embryo transfer, frozen embryo transfer and donor egg programs.
Current ART techniques used in connection with ART services include
intracytoplasmic sperm injection, assisted hatching, cryopreservation of embryos
and blastocyst culture and transfer.
There are approximately 38,000 obstetricians/gynecologists in the United
States; approximately 1,500 of which concentrate on providing fertility services
with no additional advanced training and 600 of which are reproductive
endocrinologists. In addition, there are approximately 350 centers across the
country that provide ART services. These centers are predominantly staffed by
reproductive endocrinologists. Approximately one-third of the ART centers are
hospital-based and two-thirds are physician office-based. As ART has become more
sophisticated, more predictable and less experimental, there has been a clear
shift of services out of hospitals and into physician offices. The fertility
services industry is, therefore, highly fragmented with a large number of
providers operating in small practice settings.
2
According to The American Society for Reproductive Medicine, it is
estimated that in 1996 approximately 10% of women between the ages of 15 and 44,
or 6.1 million women, had impaired fertility. According to the 1999-2000 Dorland
Biomedical Healthcare Marketplace Guide, the annual expenditures relating to
fertility services are approximately $2 billion. The Company believes that
multiple factors over the past several decades have affected fertility levels. A
demographic shift in the United States toward the deferral of marriage and first
birth has increased the age at which women are first having children. This, in
turn, makes conception more difficult and increases the risks associated with
pregnancy, thereby increasing the demand for ART services. In addition,
technological advances in the diagnosis and treatment of infertility have
enhanced treatment outcomes and the prognoses for many couples.
According to William M. Mercer/Foster-Higgins' National Survey of
Employer-sponsored Health Plans/1995, approximately one quarter of all health
plan sponsors with at least 10 employees provide some coverage for treatment of
infertility. Because patients seeking fertility treatment often have other
gynecological symptoms, health plans may cover diagnostic and therapeutic
expenses even when infertility is not a covered benefit. Currently, there are
several states that mandate offering benefits of varying degrees for fertility
services, including ART services. In some states, the mandate is limited to an
obligation on the part of the payor to offer the benefit to employers. In
Massachusetts, Rhode Island, Maryland, Arkansas, Illinois and Hawaii, the
mandate requires coverage of conventional fertility services as well as ART
services. In addition to payor driven initiatives to broaden coverage, several
legislative initiatives are emerging as a driving force behind making fertility
services more readily available. Legislation requiring all health plans to
provide coverage for diagnosis and treatment of infertility has been introduced
in several states. Finally, the 1998 Supreme Court Ruling that reproduction is a
major life activity covered under the Americans with Disability Act (the "ADA")
led to an Equal Employment Opportunity Commission administrative ruling that a
New York company discriminated against one of its employees by not providing
insurance coverage for fertility services.
ART services are the most rapidly growing segment of the fertility market.
According to the Society of Assisted Reproductive Technology ("SART"),
approximately 10,000 ART procedures were performed in 1987. In 1998, the most
recent year for which data are available, approximately 67,000 ART procedures
were performed. There is reason to believe that the market will continue to grow
in the future: (i) the quality of ART treatments is improving, making outcomes
much more acceptable; (ii) improvements in embryo culture media and implantation
rates are leading to the capability of reducing high order multiple pregnancies
- - one of the greatest risk factors of ART services; (iii) with improving
pregnancy rates, the cost of treatment is decreasing thereby making high
technology services more affordable; (iv) new ART services that improve embryo
quality and the likelihood of pregnancy, such as blastocyst culture and
transfer, continue to emerge fueling an expansion of the industry; (v) the
improving relationship between cost and quality is causing physicians to
substitute more effective ART treatments for less effective conventional
fertility services; (vi) public policy initiatives including legislative
mandates for insurance coverage and the definition of reproduction as a major
life activity covered by the ADA are producing a more favorable reimbursement
climate; and (vii) demand for ART services is increasing through greater public
awareness and acceptance of ART services.
The market conditions producing business opportunities for the Company
include: (i) the high level of specialized skills and technology required for
comprehensive patient treatment; (ii) the capital-intensive nature of acquiring
and maintaining state-of-the-art medical equipment, laboratory and clinical
facilities; (iii) the need to develop and maintain specialized management
information systems to meet the increasing demands of technological advances,
patient monitoring and third-party payors; (iv) the need for seven-days-a-week
service to respond to patient needs and to optimize the outcomes of patient
treatments; (v) the high cost of treatment with inadequate insurance benefits in
most markets, (vi) the high cost of pharmaceutical products requiring patient
education and support and (vii) the rapid nature of new pharmaceutical and
treatment developments requiring clinical trials to document efficacy.
Company Strategy
The Company's strategy is to align information, technology and finance for
the benefit of fertility patients, providers, payors and pharmaceutical
manufacturers. The primary elements of the Company's strategy include: (i)
selling additional FertilityDirect contracts to leading fertility centers in new
major markets; (ii) selling Shared Risk Refund treatment packages (as defined on
the next page) to patients of contracted fertility centers and managing the risk
associated with the program; (iii) selling additional Business Services
contracts; (iv) increasing revenues at Reproductive Science Centers; (v)
increasing sales of pharmaceutical products and services; (vi) expanding
clinical research opportunities; and (vii) establishing Internet-based access to
patient-specific information on treatment processes and outcomes.
3
Selling Additional FertilityDirect Contracts
The FertilityDirect program provides contracted fertility centers with
exclusive market access to the Company's products and services that support
patient recruitment. Included are (i) Shared Risk Refund; (ii) treatment
financing; (iii) employer contracting; and (iv) Internet marketing. The Company
licenses these programs to a leading fertility center in each major market
targeted.
The Company intends to expand the IntegraMed Network to cover additional
major market areas across the country. The Company will primarily focus the
IntegraMed Network development activities on major markets with populations in
excess of one million people. The demographics of consumers who access fertility
services are consistent with the demographics of most major metropolitan
markets. In addition, the incidence of infertility requires a large population
base to support a sophisticated fertility center. High quality fertility centers
are capable of drawing consumers from approximately a one hundred mile radius or
more if alternatives are unavailable. These market dynamics will allow the
Company to cover a large percentage of the national population by expanding the
IntegraMed Network to the fifty largest metroplitan markets across the country.
Selling Shared Risk Refund Treatment Packages and Managing the Associated Risk
The Company intends to increase the number of contracted fertility centers
that offer the Shared Risk Refund Program to its patients. The Shared Risk
Refund Program was established at Shady Grove Fertility Reproductive Science
Center ("Shady Grove") - the leading fertility center in the metropolitan
Washington, DC area and a member of the IntegraMed Network. Based on the
experience at Shady Grove, the Company developed an actuarial model that allows
pricing a treatment package to consumers. The Shared Risk Refund Program
consists of a package that includes up to three cycles of in vitro fertilization
for one fixed price with a significant refund if the patient does not deliver a
baby. Under this innovative financial program, the Company receives payment
directly from consumers who qualify for the program and pays contracted
fertility centers a defined reimbursement for each treatment cycle performed.
To manage the Company's risk associated with the Shared Risk Refund
Program, the Company has developed a case management program in association with
the Women's Integrated Network, an infertility case management company based in
Harrison, New York. This case management program will authorize patient care and
provide information to be used in recognizing revenue and developing the related
reserves for refunds. Consumers have responded favorably to the Shared Risk
Refund Program. Currently this program represents approximately fifteen percent
of the revenue at Shady Grove. Based on favorable consumer response, the Company
believes it can expand the number of contracted fertility centers offering the
program and sell an increasing number of Shared Risk Refund treatment packages.
Selling Additional Business Services Contracts
The Company intends to increase the number of Business Services Contracts.
The Company will primarily focus its activities on fertility centers contracted
under the Company's FertilityDirect program. The Company believes that a number
of factors will contribute to the successful conversion of FertilityDirect
contracts to Business Services contracts. These factors include: (i) the high
quality reputation of the Company in providing Business Services in the areas of
fertility and ART services; (ii) the Company's expertise in assisting its
Business Services customers in increasing revenues and maintaining cost
efficient operations; (iii) the Company's success in improving patient outcomes
by providing laboratory support services to its Business Services customers; and
(iv) the capital intensive nature of operating modern, sophisticated fertility
centers and the difficulty most physician groups have in accessing sufficient
capital.
Increasing Revenues at Reproductive Science Centers
The Company expects to increase revenues derived under its Business
Services contracts by: (i) Reproductive Science Centers merging with smaller
fertility physician group practices; (ii) making available expanded laboratory
and ART services at the Reproductive Science Centers, thereby increasing
revenues per patient; (iii) making available increased marketing and sales
support to Reproductive Science Centers; and (iv) increasing the opportunity for
participation by the Reproductive Science Centers in clinical trials of new
drugs, medical devices and diagnostic technologies under development.
4
Increasing Sales of Pharmaceutical Products and Services
The Company will continue to expand the IntegraMed Pharmaceutical Services,
Inc. subsidiary by: (i) providing Education Matters(TM) - a comprehensive
patient educational support program to participating Reproductive Science Center
patients; (ii) packaging products in the Cycle Kit(TM)- a unique packaging
system that provides patients with all supplies and instructions for proper
utilization of medication; (iii) minimizing cost to patients and payors by
implementing Cycle Track(TM) - a fertility pharmaceutical case management system
that dispenses only the required amount of medication for patients to complete
their treatment; (iv) implementing an aggressive marketing and sales program in
cooperation with ivpcare, inc. (the supplier of pharmaceuticals to IntegraMed
Pharmaceutical Services, Inc.); and (v) expanding the offering beyond the five
Reproductive Science Centers to the entire IntegraMed Network.
Expanding Clinical Research Opportunities
In 2000, the Company obtained commitments for initial funding from
pharmaceutical manufacturers to establish the IntegraMed Research Institute (the
"Research Institute"). The purpose of the Research Institute is to organize
multi-center clinical research among the Reproductive Science Center network.
The Company believes it will expand its direct participation in clinical
research trials by: (i) offering a more efficient clinical trial network that
delivers results to pharmaceutical companies more quickly; (ii) offering access
to a geographically diverse network of providers and patients; (iii)
participating in the design of clinical trials with manufacturers and increasing
value-added services to these sponsors; and (iv) marketing the availability of
the Research Institute and affiliated Reproductive Science Centers to other
manufacturers of pharmaceutical products and devices.
Developing Internet-Based Access to Personalized Health Information
The Company will continue to develop www.integramed.com as a leading
fertility portal. The web site has provided a very efficient direct marketing
infrastructure that allows the Company to offer efficient transaction processing
capability for consumers and affiliated fertility centers. Currently consumers
can directly order an educational video, apply for treatment financing and apply
for the Shared Risk Refund Program. All transactions are logged to an Oracle
database housed in the Company's data center. In addition, contracted fertility
centers receive patient inquiries and referrals as appropriate.
The Company intends to improve the functionality of its web portal by
allowing consumers to directly schedule an appointment with contracted fertility
centers and conduct other physician/patient communication in a personal, secure
web page.
Business Services
The Company provides comprehensive Business Services to support the
Reproductive Science Centers. In particular, the Company provides: (i)
administrative services, including accounting and finance, human resource
functions, and purchasing of supplies and equipment; (ii) access to capital;
(iii) marketing and sales; (iv) integrated information systems; (v) assistance
in identifying best clinical practices; and (vi) laboratory services.
By providing the Reproductive Science Centers with access to centralized,
rationalized resources, the Company enables physicians at the Reproductive
Science Centers to achieve improved efficiencies and business outcomes.
Administrative Services
The Company provides administrative services to the Reproductive Science
Centers, including: (i) accounting and finance services, such as billing and
collections, accounts payable, payroll, and financial reporting and planning;
(ii) recruiting, hiring, training and supervising all non-medical personnel; and
(iii) purchasing of supplies, pharmaceuticals, equipment, services and
insurance.
Access to Capital
The Company provides the Reproductive Science Centers with a significant
competitive advantage through immediate access to capital for expansion and
growth. The Company also offers physician and hospital providers in its network
rapid access to the latest technologies and facilities in order for them to
provide a full spectrum of services and compete effectively for patients in the
marketplace. For example, the Company has built a new facility inclusive of an
embryology laboratory for certain Reproductive Science Centers, thereby enabling
them to expand their service offerings to include a number of services
(including laboratory and ART services) which had previously been outsourced.
The Company believes that access to these facilities and new technologies have
improved the ability of the Reproductive Science Centers to offer comprehensive
high quality services, expand the revenue base per patient, and compete
effectively.
5
Marketing and Sales
The Company's marketing and sales department specializes in the development
of sophisticated marketing and sales programs giving Reproductive Science
Centers access to business-building techniques to facilitate growth and
development. In today's highly competitive health care environment, marketing
and sales are essential for the growth and success of physician practices.
However, these marketing and sales efforts are often too expensive for many
physician practice groups. Affiliation with the IntegraMed Network provides
physicians access to significantly greater marketing and sales capabilities than
would otherwise be available. The Company's marketing services focus on revenue
and referral enhancement, relationships with local physicians, media and public
relations and managed care contracting.
The Company believes that participation in its network will assist
Reproductive Science Centers in establishing contracts with managed care
organizations. The Company believes that by integrating fertility physicians
with ART facilities, and thereby developing full service Reproductive Science
Centers, practices within the IntegraMed Network will be permitted to compete
more effectively for managed care contracts.
Integrated Information System
The Company is in the process of utilizing its established base of
Reproductive Science Centers to develop a nationwide, integrated information
system called ARTWorks(TM) to collect and analyze clinical, patient, financial
and marketing data. The Company believes it will be able to use this data to
control expenses, measure patient outcomes, improve patient care, develop and
manage utilization rates and maximize reimbursements. The Company also believes
this integrated information system will allow the Reproductive Science Centers
to more effectively compete for and price managed care contracts, in large part
because an information network can provide these managed care organizations with
access to patient outcomes and cost data.
Assistance in Identifying Best Clinical Practices
The Company assists Reproductive Science Centers in identifying best
clinical practices and implementing quality assurance and risk management
programs in order to improve patient care and clinical outcomes. For example,
the Company has instituted a Clinical Quality Improvement Program that focuses
the physicians and laboratory technicians on the principal elements necessary to
achieve successful outcomes and incorporates periodic quality review programs.
The Company's structured Clinical Quality Improvement Program produces a
distinctive competitive advantage in the marketplace for the Company's network
of Reproductive Science Centers.
Laboratory Services
All of the Reproductive Science Centers either have, or subcontract with,
state-of-the-art laboratories that enable the physicians to perform diagnostic
endocrine and andrology laboratory tests on patients receiving fertility and ART
services. Endocrine tests assess female hormone levels in blood samples, while
andrology tests analyze semen samples. The results from these tests are often
used by the physician to determine an appropriate treatment plan. In addition,
all Reproductive Science Centers either have, or subcontract on a priority-use
basis with a state-of-the-art clinical embryology laboratory.
6
The Reproductive Science Centers
The Company has a Business Services contract with each Reproductive Science
Center which in turn employs and/or contracts with the physicians.
Current Reproductive Science Centers
The Company currently has contracts with five Reproductive Science Centers
consisting of twenty locations in six states and the District of Columbia and
forty-two physicians and Ph.D. scientists, including physicians and Ph.D.
scientists employed and/or contracted by the Medical Practices, as well as
physicians who have arrangements to utilize the Company's facilities. The
following table describes in detail each Reproductive Science Center:
Number of Initial
Number of Physicians and Business Services
Reproductive Science Centers State Locations Ph.D. Scientists Contract Date
---------------------------- ----- --------- ---------------- -------------
Reproductive Science Center of Boston........ MA 3 7 July 1988
Reproductive Science Associates.............. NY 2 6 June 1990
Reproductive Science Center of the Bay Area
Fertility and Gynecology Medical Group.... CA 3 7 January 1997
Fertility Centers of Illinois................ IL 7 12 August 1997
Shady Grove Fertility Reproductive
Science Centers........................... MD, VA & DC 5 10 March 1998
Prior to December 29, 2000, one of the Company's Reproductive Science
Centers was affiliated with a medical center. The agreement with the medical
center was scheduled to terminate on December 31, 2001. The medical center chose
to terminate the agreement early and paid the Company liquidated damages.
Establishing Reproductive Science Centers
In establishing a Reproductive Science Center, the Company typically: (i)
acquires certain assets of a Medical Practice; (ii) enters into a long-term
services agreement with the Medical Practice under which the Company provides
comprehensive Business Services to the Medical Practice; and (iii) assumes the
principal administrative and financial functions of the Medical Practice. In
addition, the Company typically requires (a) that the Medical Practice enter
into long-term employment agreements containing non-compete provisions with the
affiliated physicians and (b) that each of the physician shareholders of the
Medical Practice enter into a personal responsibility agreement with the
Company. Typically, the Medical Practice contracting with the Company is a
professional corporation in which certain of, or all of, the physicians are the
shareholders.
Business Services Contracts
Typically, the Business Services Contracts obligate the Company to pay a
fixed sum for the exclusive right to service the Medical Practice, a portion or
all of which is paid at the contract signing with any balance to be paid in
future annual installments. The agreements are typically for terms of ten to 25
years and are generally subject to termination due to insolvency, bankruptcy or
material breach of contract. Generally, no shareholder of the Medical Practice
may assign his interest in the Medical Practice without the Company's prior
written consent.
The Business Services contracts provide that all patient medical care at a
Reproductive Science Center is to be provided by the physicians of the Medical
Practice and that the Company generally is responsible for providing defined
Business Services to the Reproductive Science Center. The Company provides the
equipment, facilities and support necessary to operate the Medical Practice and
employs substantially all such other non-physician personnel as are necessary to
provide technical, consultative and administrative support for the patient
services at the Reproductive Science Center. Under certain agreements, the
Company is committed to provide a clinical laboratory. Under the agreements, the
Company may also advance funds to the Medical Practice to provide new services,
utilize new technologies, fund projects, purchase the net accounts receivable,
provide working capital or fund mergers with other physicians or physician
groups.
7
Under four agreements, the Company receives as compensation for its
services a three-part fee comprised of: (i) a fixed or variable percentage of
net revenues generally up to 6%; (ii) reimbursed costs of services (costs
incurred in providing services to a Medical Practice and any costs paid on
behalf of the Medical Practice); and (iii) a fixed percentage of earnings after
the initial service fees which is currently generally equal to up to 20%.
As compensation for providing Business Services under the fifth agreement,
the Company receives a fixed fee, plus reimbursed costs of services.
Prior to December 29, 2000, one of the Company's Reproductive Science
Centers was affiliated with a medical center. Under this agreement, the Company
primarily provided endocrine testing, administrative and finance services for a
fixed percentage of receipts, equal to 15% of net receipts, and reimbursed costs
of services. The agreement was scheduled to expire December 31, 2001, but
pursuant to an early termination agreement, the medical center has paid the
Company liquidated damages totaling $1.44 million. Since the Company has certain
future obligations under the agreement, the payment will be recognized as
revenue in 2001.
The Company reports all fees as "Revenues, net." Direct costs incurred by
the Company in performing its services and costs incurred on behalf of the
Reproductive Science Centers are recorded in "cost of services incurred". The
physicians receive as compensation all remaining earnings after payment of the
Company's compensation.
Physician Employment Agreements
Employment agreements between the Reproductive Science Centers and
physicians generally provide for an initial term ranging from three to five
years. The term may be automatically renewed at successive intervals unless the
physician or the Medical Practice elects not to renew or such agreement is
otherwise terminated for cause or the death or disability of a physician. The
physicians are paid based upon either the number of procedures performed or
other negotiated formulas agreed upon between the physicians and the
Reproductive Science Centers, and the Reproductive Science Centers provide the
physicians with health, death and disability insurance and other benefits. The
Reproductive Science Centers are obligated to obtain and maintain professional
liability insurance coverage, procured on behalf of the physicians. Pursuant to
the employment agreements, the physicians agree not to compete with the
Reproductive Science Centers with which they have contracted during the term of
the agreement and for a certain period following the termination of such
employment agreement. In addition, the agreements contain customary
confidentiality provisions.
Personal Responsibility Agreements
Commencing with Business Services agreements dated 1997 to the present day,
the Company entered into a Personal Responsibility Agreement with each of the
physician shareholders of the Medical Practice. The Agreement protects the
Company's investments in the event the physician ceases to practice medicine at
the Reproductive Science Center during the first five years of the related
contract (except as a result of death or permanent disability). The Agreement
obligates the physician to repay a ratable portion of the fee paid by the
Company to the physician for the exclusive rights to service the practice. The
Agreement also contains covenants for the physician not to compete with the
Company during the term of his or her employment agreement with the Medical
Practice and for a specified period thereafter.
Affiliate Care/Satellite Service Agreements
Reproductive Science Centers may also have affiliate care agreements and
satellite service agreements with physicians who are not employed by the
Reproductive Science Centers. Under an affiliate care agreement, the Medical
Practice contracts with a physician to provide certain services for the Medical
Practice's patients, such as endocrine/ultrasound monitoring, or ART services.
Pharmaceutical Subsidiary
IntegraMed Pharmaceutical Services, Inc. ("IPSI") is a licensed pharmacy
based in Carrollton, Texas, whose primary business is the retail distribution of
fertility-related pharmaceutical products to the Reproductive Science Centers.
IPSI was formed in conjunction with ivpcare, inc., a licensed pharmacy
specializing in dispensing pharmaceutical products, which provides certain
management services to IPSI.
8
Financing Subsidiary
IntegraMed Financial Services ("IFS") provides financing to qualified
patients of the IntegraMed Network at rates significantly lower than credit
cards and other finance companies. IFS is administered by PFS Patient Financing,
which provides administrative management services to IFS.
Council of Physicians and Scientists
The Company's Council of Physicians and Scientists (the "Council"),
comprised mostly of representatives from the IntegraMed Network, was established
in 1996 to bring together Reproductive Science Center thought leaders in
reproductive medicine and embryology to promote a high quality clinical
environment in all Reproductive Science Centers. The Council meets twice each
year and conducts monthly teleconferences on topics related to improving
infertility treatment and diagnosis. The Council publishes its recommendations
and Company staff follow up on implementing Council recommendations. The Council
reviews and recommends to accept or deny additional physicians who want to join
the IntegraMed Provider Network based on objective clinical credentialing
criteria. The Council also conducts an additional level of clinical review of
any fertility center applying to participate in the Company's Shared Risk Refund
Program.
The Council also provides oversight to the Company's Research Institute.
IntegraMed Research Institute is funded by pharmaceutical manufacturers and was
organized to administer multi-center clinical research within the IntegraMed
Network. As part of this oversight function, the Council peer reviews
applications from Reproductive Science Centers for research support by the
Research Institute, ensures compliance with Institutional Review Board
guidelines for clinical research involving human subjects and hosts an annual
meeting of Reproductive Science Center and affiliate physicians and scientists
to review research progress and related subjects.
Reliance on Third-Party Vendors
The Reproductive Science Centers, IntegraMed Pharmaceutical Services, as
well as all other medical providers who deliver services requiring fertility
medication, are dependent on three third-party vendors that produce such
medications (including but not limited to: Lupron, Follistim, Repronex, GonalF
and Pregnyl) that are vital to treating infertility and ART services. Should any
of these vendors experience a supply shortage, it may have an adverse impact on
the operations of the Reproductive Science Centers. To date, the Reproductive
Science Centers have not experienced any such adverse impacts.
Competition
The business of providing health care services is intensely competitive and
strives to find the most cost-effective method of providing quality health care.
Although the Company focuses on Reproductive Science Centers that provide
fertility and ART services, it competes for contracts with other health care
services and management companies, as well as hospitals and hospital-sponsored
management services organizations. If federal or state governments enact laws
that attract other health care providers to the managed care market, the Company
may encounter increased competition from other institutions seeking to increase
their presence in the managed care market and which have substantially greater
resources than the Company. There is no assurance that the Company will be able
to compete effectively with its current competitors. Nor is there assurance that
additional competitors will not enter the market, or that such competition will
not make it more difficult to acquire the assets and Business Services rights of
Reproductive Science Centers on terms beneficial to the Company.
The fertility industry is highly competitive and characterized by
technological improvements. New ART services and techniques may be developed
that may render obsolete the ART services and techniques currently employed at
the Reproductive Science Centers. Competition in the areas of fertility and ART
services is largely based on pregnancy and other patient outcomes. Accordingly,
the ability of a Medical Practice to compete is largely dependent on its ability
to achieve adequate pregnancy rates and patient satisfaction levels.
Effects of Third-Party Payor Contracts
Traditionally, ART services have been paid for directly by patients and
conventional fertility services have been largely covered by indemnity insurance
or managed care payors. Currently, there are several states that mandate
offering certain benefits of varying degrees for fertility and ART services. In
some cases, the mandate is limited to an obligation on the part of the payor to
offer the benefit to employers. In Massachusetts, Rhode Island, Maryland,
Arkansas, Illinois and Hawaii, the mandate requires coverage of conventional
fertility services as well as certain ART services.
9
Government Regulation
As a participant in the health care industry, the Company's operations and
its relationships with the Reproductive Science Centers and the IntegraMed
Network are subject to extensive and increasing regulation by various
governmental entities at the federal, state and local levels. These include, but
are not limited to, Federal and State Anti-Kickback Laws, Federal and State
Self-Referral Laws, False Claim Laws, Federal and State Controlled Substances
laws and regulations and Anti-Trust Laws. The Company believes its operations
and those of the Reproductive Science Centers are in material compliance with
applicable health care laws. Nevertheless, the laws and regulations in this area
are extremely complex and subject to changing interpretation and many aspects of
the Company's business and business opportunities have not been the subject of
federal or state regulatory review or interpretation. Accordingly, there is no
assurance that the Company's operations have been in compliance at all times
with all such laws and regulations. In addition, there is no assurance that a
court or regulatory authority will not determine that the Company's past,
current or future operations violate applicable laws or regulations. If the
Company's interpretation of the relevant laws and regulations is inaccurate,
there could be a material adverse effect on the Company's business, financial
condition and operating results. There can be no assurance that such laws will
be interpreted in a manner consistent with the Company's practices. There can be
no assurance that a review of the Company or the Reproductive Science Centers by
courts or regulatory authorities will not result in a determination that would
require the Company or the Reproductive Science Centers to change their
practices. There also can be no assurance that the health care regulatory
environment will not change so as to restrict the Company's or the Reproductive
Science Centers? existing operations or their expansions. Any significant
restructuring or restriction could have a material adverse effect on the
Company's business, financial condition and operating results.
Corporate Medical Practice Laws. The Company's operations may be subject to
state laws relating to corporations practicing medicine. State laws may prohibit
corporations other than medical professional corporations or associations from
practicing medicine or exercising control over physicians, and may prohibit
physicians from practicing medicine in partnership with, or as employees of, any
person not licensed to practice medicine. Furthermore, operations in New York,
California, Maryland and Illinois may be subject to fee-splitting prohibitions.
State law may also prohibit a corporation other than professional corporations
or associations (or, in some states, limited liability companies) from acquiring
the goodwill of a medical practice. The Company believes its operations are in
material compliance with applicable state laws relating to the corporate
practice of medicine. The Company performs only non-medical administrative
services, and in certain circumstances, clinical laboratory services. The
Company does not represent to the public that it offers medical services. In
each state, the Medical Practice is the sole employer of the physicians, and the
Medical Practice retains the full authority to direct the medical, professional
and ethical aspects of its medical practice. However, although the Company
believes its operations are in material compliance with applicable state
corporate practice of medicine laws, the laws and their interpretations vary
from state to state, and are enforced by regulatory authorities who have broad
discretionary authority. There can be no assurance that these laws will be
interpreted in a manner consistent with the Company's practices or that other
laws or regulations will not be enacted in the future that could have a material
adverse effect on the Company's business, financial condition and operating
results.
Health Insurance Portability and Accountability Act. Recently, the healthcare
industry began to focus on the impact that the Health Insurance Portability and
Accountability Act ("HIPAA") regulations and implementation might have on their
operations and information systems. HIPAA was designed to reduce the amount of
administrative waste in healthcare today and to further protect the privacy of
any patient's medical information. HIPAA regulations (those proposed and those
already final) identify certain standards for both manual processes and
automated processes and systems handling patient medical information. HIPAA
regulations related to standard data formats and data sets for electronic
transaction processing became final in 2000, with required implementation
deadlines by October 2002. Additional HIPAA regulations for security have been
proposed, but are not yet final. The HIPAA regulations related to privacy of
medical information are final and scheduled to be implemented by February 2003.
The HIPPA regulations may impose the need for additional required enhancements
of the Company's internal systems. While the Company will incur costs to become
compliant with the HIPAA regulations for electronic transaction processing,
management believes they will not have a significant overall impact on the
Company's results of operations. Management is currently assessing the overall
impact of the privacy standards and will evaluate the overall impact of the
security standards once finalized.
10
Liability and Insurance
Providing health care services entails a substantial risk of potential
medical malpractice and similar claims. The Company does not itself engage in
the practice of medicine or assume responsibility for compliance with regulatory
requirements directly applicable to physicians, and therefore requires
associated Reproductive Science Centers to maintain medical malpractice
insurance. In general, the Company has established a program that provides the
Reproductive Science Centers with such required insurance. However, in the event
that services provided at the Reproductive Science Centers or any affiliated
Medical Practice are alleged to have resulted in injury or other adverse
effects, the Company is likely to be named as a party in a legal proceeding.
Although the Company currently maintains liability insurance that it
believes is adequate in risk and amount, successful malpractice claims could
exceed the limits of the Company's insurance and could have a material adverse
effect on the Company's business. Moreover, there is no assurance that the
Company will be able to obtain such insurance on commercially reasonable terms
in the future or that any such insurance will provide adequate coverage against
potential claims. In addition, a malpractice claim asserted against the Company
could be costly to defend, could consume management resources and could
adversely affect the Company's reputation and business, regardless of the merit
or eventual outcome of such claim. In addition, in connection with the asset
acquisition of certain Reproductive Science Centers, the Company may assume some
of the Medical Practice's stated liabilities. Therefore, an entity may assert
claims against the Company for events related to the Medical Practice prior to
its acquisition. The Company maintains insurance coverage related to those risks
that it believes is adequate as to the risks and amounts, although there is no
assurance that any successful claims will not exceed applicable policy limits.
There are inherent risks specific to the provision of ART services. For
example, the long-term effects of the administration of fertility medication,
integral to most fertility and ART services, on women and their children are of
concern to certain physicians and others who fear the medication may prove to be
carcinogenic or cause other medical problems. Currently, fertility medication is
critical to most ART services and a ban by the United States Food and Drug
Administration or any limitation on its use would have a material adverse effect
on the Company. Furthermore, ART services increase the likelihood of multiple
births, which are often premature and may result in increased costs and
complications.
Employees
As of March 1, 2001, the Company had 552 employees. Of these 525 are
employed at the Reproductive Science Centers and 27 are employed at the
Company's headquarters, including 5 who are executive management. Of the
Company's employees, 251 persons at the Reproductive Science Centers and 2 at
the Company's headquarters are employed on a part-time basis. The Company is not
party to any collective bargaining agreement and believes its employee
relationships are good.
11
ITEM 2. Properties
The Company's headquarters and executive offices are in Purchase, New York,
where it occupies approximately 8,000 square feet under a lease expiring April
14, 2005 at a monthly rental ranging from $15,714 to $20,000.
The Company leases, subleases, and/or occupies, pursuant to its Business
Services agreements, each Reproductive Science Center location from third-party
landlords. Costs associated with these agreements are included in "Cost of
services rendered" and are reimbursed to the Company as part of its fee;
reimbursed costs are included in "Revenues, net".
The Company believes its executive offices and the space occupied by the
Reproductive Science Centers are adequate.
ITEM 3. Legal Proceedings
On October 1998, W.F. Howard, M.D., P.A., filed a lawsuit against the
Company in the District Court of Denton County, Texas, seeking to rescind the
agreement related to the Dallas Reproductive Science Center, or obtain damages,
on the basis that its practice had not realized the degree of growth or
increases as allegedly projected by the Company. The complaint asserted alleged
breaches of contract, fiduciary duties and warranties, as well as a claim under
the Texas Deceptive Trade Practices Act, and claimed lost profit damages as well
as an exemplary award under statute. Plaintiff's claim was compromised in
December 2000 with a recovery by the Company and a discontinuance of the
lawsuit.
In July 1999, an action was filed in Middlesex Superior Court in
Massachusetts, against the Company, the Reproductive Science Center of Boston
(the "Center"), an independent genetic testing laboratory, and certain of their
respective employees. The complaint in this matter was served on the Company in
March 2000. The action, filed by two former patients of the Center, arises out
of plaintiffs' participation during 1996 in an experimental program of
pre-implantation genetic testing. The plaintiffs allege professional negligence
and breach of contract/warranties resulting in the birth of their child who
suffers from cystic fibrosis. Plaintiffs seek damages of an undisclosed amount.
The Company's insurance carrier has appointed Massachusetts counsel to represent
the Company in the matter who is investigating the allegations in cooperation
with its co-defendants. The Company has been advised by counsel that although
such counsel can not predict the likely course of the litigation, such counsel
currently believes that by virtue of insurance coverage available to all the
defendants, the suit is not likely to have a material adverse effect on the
Company.
In April 1999, Integra, Inc. filed with the United States Patent and
Trademark Office ("USP&T") before the Trademark Trial and Appeal Board an
opposition to the granting of the Company's trademark "INTEGRAMED AMERICA",
claiming that the USP&T should deny registration of the Company's trademark.
Integra, Inc. allegedly distributes outcome based managed care products,
manuals, brochures, patient information and data forms for use in connection
with managed behavioral healthcare consulting and research services under the
mark "INTEGRA". Since the time of filing the opposition, counsel for the Company
has engaged in discussions with Integra's counsel in an effort to resolve
Integra's opposition, but no resolution has been reached with respect to the two
trademarks. Discovery is currently underway in the matter. Counsel for the
Company has advised the Company that in such counsel's opinion, the marks are
not confusingly similar. While such counsel can offer no assurances with respect
to the outcome of the opposition proceeding, such counsel believes that it is
unlikely that the Company's trademark application will not be approved.
There are other minor legal proceedings to which the Company is a party. In
the Company's opinion, the claims asserted and the outcome of such proceedings
will not have a material adverse effect on the financial position, results of
operations or the cash flows of the Company.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
12
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's Common Stock has been traded on The NASDAQ National Market
under the symbol "INMD" since the Company's formal name change in June 1996 and
prior to the name change under the symbol "IVFA" since May 21, 1993. Prior
thereto, the Company's Common Stock had been trading on the NASDAQ Small Cap
Market since October 8, 1992. The following table sets forth the high and low
closing sales price for the Common Stock, as reported on The NASDAQ National
Market.
Common Stock
------------
High Low
---- ---
1999
First Quarter......................... $6.38 $2.94
Second Quarter........................ 4.88 2.88
Third Quarter......................... 5.50 3.63
Fourth Quarter........................ 4.25 2.31
2000
First Quarter......................... 3.88 2.75
Second Quarter........................ 3.75 2.88
Third Quarter......................... 3.81 2.13
Fourth Quarter........................ 2.34 1.75
On March 15, 2001, there were approximately 240 holders of record of the
Common Stock and approximately 1,162 beneficial owners of shares registered in
nominee or street name.
The Company has not paid dividends on its Common Stock during the last two
fiscal years. The Company currently anticipates that it will retain all
available funds for use in the operation and expansion of its business, and
therefore, does not anticipate paying any cash dividends on its Common Stock for
the foreseeable future.
Dividends on the Series A Cumulative Convertible Preferred Stock are
payable at the rate of $0.20 per share quarterly on the fifteenth day of
February, May, August and November. In May 1995, as a result of the Company's
Board of Directors suspending four quarterly dividend payments, holders of the
Convertible Preferred Stock became entitled to one vote per share of Convertible
Preferred Stock on all matters submitted to a vote of stockholders, including
election of directors; once in effect, such voting rights are not terminated by
the payment of all accrued dividends. Currently, there are no Convertible
Preferred Stock dividends in arrears.
Unregistered shares of Common Stock and warrants were issued during 1999
and 2000 as described in the following paragraphs.
On January 5, 1999 the Company issued an aggregate of 6,467 shares of
unregistered Common Stock to Shady Grove Fertility Centers, Inc. in connection
with a Business Services agreement entered into on March 12, 1998. Said shares
had a market value of $175,900 at the time of issuance.
In January 1999, the Company issued unregistered warrants to acquire 5,000
shares of Common Stock at $5.125 per share to Robert Stillman, M.D. in
connection with the Second Closing Date of the Shady Grove acquisition. On July
15, 1999 the Company issued unregistered warrants to VSII Shareholders Trust II
to acquire an aggregate of 19,907 shares of Common Stock at an exercise price of
$7.24 per share in connection with certain investment banking services rendered
to the Company.
In July 2000, the Company issued an aggregate of 44,610 shares of
restricted stock grants to several members of the Company's Board of Directors
and several officers of the Company. Said shares had a market value of $142,306
at the time of issuance.
13
ITEM 6. Selected Financial Data
The following selected financial data are derived from the Company's
consolidated financial statements and should be read in conjunction with the
financial statements, related notes, and other financial information included
elsewhere in this Annual Report on Form 10-K.
Statement of Operations Data (1):
Years ended December 31,
-------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- ------- -------
(in thousands, except per share amounts)
Revenues, net................................ $57,864 $45,955 $38,590 $20,559 $14,906
Costs of services incurred................... 48,805 36,556 29,778 14,940 11,610
------- ------- ------- ------- -------
Contribution................................. 9,059 9,399 8,812 5,619 3,296
General and administrative expenses.......... 5,880 6,084 5,316 4,192 4,662
Total other expenses
(including income taxes), net............. 1,262 2,997 1,643 632 8
Restructuring and other charges (2).......... -- -- 2,084 -- --
------- ------- ------- ------- -------
Income (loss) from continuing operations..... 1,917 318 (231) 795 (1,374)
Loss from operation and disposal of
AWM Division (3).......................... -- -- 4,501 421 116
------- ------- ------- ------- -------
Net income (loss)............................ 1,917 318 (4,732) 374 (1,490)
Less: Dividends paid and/or accrued on
Preferred Stock........................... 133 133 133 133 133
------- ------- ------- ------- -------
Net income (loss) applicable to Common
Stock (4)................................. $ 1,784 $ 185 $(4,865) $ 241 $(1,623)
======= ======= ======= ======= =======
Basic and diluted earnings (loss) per share
of Common Stock (4):
Continuing operations..................... $ 0.43 $ 0.04 $ (0.07) $ 0.21 $ (0.79)
Discontinued operations................... -- -- (0.87) (0.13) (0.06)
------- ------- ------- ------- -------
Net earnings (loss)....................... $ 0.43 $ 0.04 $ (0.94) $ 0.08 $ (0.85)
======= ======= ======= ======= =======
Weighted average shares-- basic.............. 4,110 4,874 5,202 3,101 1,900
======= ======= ======= ======= =======
Weighted average shares-- diluted............ 4,172 4,951 5,202 3,154 1,900
======= ======= ======= ======= =======
Balance Sheet Data:
As of December 31,
------------------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ -------
(in thousands)
Working capital (5).......................... $ 4,943 $ 5,705 $ 7,661 $ 4,082 $ 7,092
Total assets (5)............................. 41,295 40,815 43,693 36,101 20,850
Total indebtedness........................... 3,569 5,410 7,381 2,928 2,553
Accumulated deficit.......................... (23,313) (25,230) (25,548) (20,816) (21,190)
Shareholders' equity......................... 25,987 26,639 27,383 25,993 14,478
(1) Earnings (loss) per share and weighted average share amounts for each year
reflect the Company's 1-for-4 reverse stock split effective November 17,
1998.
(2) Refer to Note 7 - Restructuring and Other Charges to the Company's
Consolidated Financial Statements.
(3) The AWM Division operations were sold effective September 1, 1998. Refer to
Note 6 - Discontinued Operations to the Company's Consolidated Financial
Statements.
(4) Net loss per share in 1996 of $(0.85) excludes the effect of the Company's
Second Conversion Offer related to Convertible Preferred Stock whereby the
fair value of $4,265,000 of additional Common shares would have been
deducted from earnings available to Common shareholders.
(5) Includes controlled assets of certain Medical Providers of $650,000 at
December 31, 1996.
14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is a discussion of the financial condition and results of
operations of the Company for the three years ended December 31, 2000. It should
be read in conjunction with the Company's Consolidated Financial Statements, the
related notes thereto and other financial and operating information included in
this Form 10-K.
Overview
IntegraMed America, Inc. (the "Company") offers products and services to
patients, providers, payors and pharmaceutical manufacturers in the fertility
industry. The IntegraMed Network is comprised of twenty-two fertility centers in
major markets across the United States, a pharmaceutical subsidiary, a financing
subsidiary, the Council of Physicians and Scientists, and a leading fertility
portal (www.integramed.com). Seventeen fertility centers have access to the
Company's FertilityDirect Program. Five of the fertility centers are designated
as "Reproductive Science Centers(R)" and as such, have access to the Company's
FertilityDirect Program in addition to being provided with a full range of
services including: (i) administrative services, including accounting and
finance, human resource functions, and purchasing of supplies and equipment;
(ii) access to capital; (iii) marketing and sales; (iv) integrated information
systems; (v) assistance in identifying best clinical practices; and (vi)
laboratory services (collectively, "Business Services").
The Company's strategy is to align information, technology and finance for
the benefit of fertility patients, providers, payors and pharmaceutical
manufacturers. The primary elements of the Company's strategy include: (i)
selling additional FertilityDirect contracts to leading fertility centers in
major markets; (ii) selling Shared Risk Refund Treatment Packages to patients of
contracted fertility centers and managing the risk associated with the programs;
(iii) selling additional Reproductive Science Center Business Service contracts;
(iv) increasing revenues at Reproductive Science Centers; (v) increasing sales
of pharmaceutical products and services; (vi) expanding clinical research
opportunities; and (vii) establishing Internet-based access to patient-specific
information on treatment process and outcomes.
During the first quarter of 1998, the Company completed an equity private
placement of $5.5 million with Morgan Stanley Venture Partners' affiliates.
Subsequent to 2000, the Company reacquired Morgan Stanley Venture Partners'
shares (see Note 20 to the Consolidated Financial Statements).
In September 1998, the Company obtained from Fleet Bank, N.A. a $13.0
million credit facility to fund acquisitions to provide working capital and to
refinance its existing bank debt.
During 1998, the Company recorded restructuring and other charges of
approximately $2.1 million associated with its termination of its agreement with
the Reproductive Science Center of Greater Philadelphia, a single-physician
Reproductive Science Center, effective July 1, 1998, and exclusive right
impairment losses related to two other single-physician Reproductive Science
Centers. In addition, due to continued operating losses and the Company's
decision to focus exclusively on fertility services, the Company sold the Adult
Women's Medical Division ("AWM Division") operations effective September 1,
1998. In 1998, the Company recorded an aggregate charge of approximately $4.5
million related to the operating losses and the disposal of the AWM Division.
During 1999, the Company accelerated amortization of the Right to Manage
fees for the Kansas City and Dallas Reproductive Science Centers.
In December 1999, the Company's agreement with the medical center based
Reproductive Science Center was terminated early. The Company received $1.44
million in liquidated damages pursuant to an early termination agreement.
The Medical Practices served by the Company are parties to managed care
contracts. Approximately 65% and 71% of the Company's revenues, net for the
years ended December 31, 2000 and 1999, respectively, were derived from revenues
received by the Medical Practices from third party payors. To date, the Company
has not been negatively impacted by existing trends related to managed care
contracts. As the Company's fees for servicing such Medical Practices are based
on revenues and/or earnings of the respective Medical Practices, changes in
managed care practices, including changes in covered procedures or reimbursement
rates could adversely affect the Company's fees in the future.
The Company is under pressure to reduce fees to the Medical Practices and
may be forced to reduce its fees. Cost containment measures may not be enough to
offset these fee reductions. In addition, as the Company implements its change
in strategy to become more of a marketing-oriented rather than a service-based
company, costs of implementation may be incurred prior to achieving the related
revenues. As a result of these two issues, future income levels may be reduced
and the Company may not achieve the earnings level experienced in 2000.
15
Results of Operations
The following table shows the percentage of net revenue represented by
various expenses and other income items reflected in the Company's Consolidated
Statement of Operations for the years ended December 31, 2000, 1999 and 1998:
2000 1999 1998
---- ---- ----
Revenues, net................................................. 100% 100% 100%
Costs of services incurred:
Employee compensation and related expenses............... 38.2% 38.7% 38.3%
Direct materials......................................... 20.7% 13.7% 12.6%
Occupancy costs.......................................... 5.8% 6.3% 7.3%
Depreciation............................................. 2.2% 3.1% 3.5%
Other expenses........................................... 17.5% 17.8% 15.5%
----- ----- ------
Total costs of services incurred....................... 84.4% 79.6% 77.2%
Contribution.................................................. 15.6% 20.4% 22.8%
General and administrative expenses........................... 10.2% 13.2% 13.8%
Amortization of intangible assets............................. 1.5% 5.2% 2.5%
Interest income............................................... (0.4)% (0.1)% (0.2)%
Interest expense.............................................. 0.7% 0.9% 1.1%
----- ----- ------
Total other expenses................................... 12.0% 19.2% 17.2%
Restructuring and other charges............................... -- -- 5.4%
Income from continuing operations before income taxes......... 3.6% 1.2% 0.3%
Provision for income taxes.................................... 0.3% 0.5% 0.9%
Income (loss) from continuing operations (a).................. 3.3% 0.7% (0.6)%
Discontinued operations loss.................................. -- -- (11.7)%
Net income (loss)............................................. 3.3% 0.7% (12.3)%
(a) Excluding the effect of the restructuring and other charges in 1998, income
from continuing operations, as a percentage of net revenues would have been 4.8%
for the year ended December 31, 1998.
Calendar Year 2000 Compared to Calendar Year 1999
Revenues, net for 2000 were approximately $57.9 million as compared to
approximately $46.0 million for 1999, an increase of $11.9 million or 25.9%. The
increase in revenues was approximately 61% attributable to new pharmaceutical
sales started during the second quarter of 1999 and 39% attributable to same
market growth offset by losses of revenue due to terminated or modified Business
Services contracts. Same market growth was principally achieved via new service
offerings, the expansion of ancillary services, and increases in patient volume.
The aggregate increase in revenue was comprised of the following: (i) an
approximate $6.5 million increase in reimbursed costs of services; (ii) an
approximate $663,000 decrease in the Company's Business Services fees derived
from the managed Medical Practices' net revenue and/or earnings, (iii) an
approximate $1.1 million decrease from terminated business service agreements
and (iv) an increase of $7.2 million from pharmaceutical sales.
Total costs of services as a percentage of revenue increased by 4.8% to
84.4% in 2000 as compared to 79.6% in 1999. The primary contributor to this
increase was the $7.0 million increase in the costs of pharmaceutical materials
as the cost of these materials represents a higher proportion of the revenue
dollar than the Business Services costs.
Contribution decreased to $9.1 million in 2000 as compared to $9.4 million
in 1999 due to the factors attributed to increasing costs of services. The
contribution margin decreased to 15.6% of revenues in 2000 from 20.4% in 1999
primarily due to pharmaceutical sales accounting for a higher percent of
revenues and providing lower margins.
General and administrative expenses for 2000 were approximately $5.9
million as compared to approximately $6.1 million in 1999, a decrease of 3.3%.
This decrease was primarily due to decreases in staffing, legal expenses, and
expenses related to the implementation of information systems.
16
Amortization of intangible assets was $865,000 in 2000 as compared to $2.4
million in 1999. The majority of this decrease is attributed to a one-time
charge incurred in 1999 of $1.35 million associated with accelerated
amortization of the Right to Manage fees of the Kansas City and Dallas
Reproductive Science Centers.
Interest income for 2000 increased to $211,000 from $65,000 for 1999, due
to a higher invested cash balance. Interest expense for 2000 increased to
$421,000 from $412,000 in 1999, primarily due to capitalized leases and the
rising level of market interest rates.
The provision for income taxes is primarily related to state taxes as the
Company has utilized available net operating loss carryforwards to eliminate any
Federal tax provision. The provision for income taxes decreased 22.1% for the
year ending December 31, 2000 as compared to 1999, due to a change in effective
tax rates as a result of tax planning initiatives.
Income from continuing operations was approximately $1.9 million in 2000 as
compared to $300,000 for 1999. The increase was primarily due to (i) an
approximate $200,000 decrease in general and administrative expenses, offset by
a decrease of $300,000 in contribution , (ii) an approximate $1.6 million
decrease in amortization of intangible assets, and (iii) and a $100,000
reduction in net interest expense.
Calendar Year 1999 Compared to Calendar Year 1998
Revenues, net for 1999 were approximately $46.0 million as compared to
approximately $38.6 million for 1998, an increase of $7.4 million or 19.1%. The
increase in revenues was approximately 33% attributable to new Business Services
agreements entered into during the second quarter of 1999 and 67% attributable
to same market growth offset by losses of revenue due to terminated Business
Services contracts. Same market growth was principally achieved via new service
offerings, the expansion of ancillary services, and increases in patient volume.
The aggregate increase in revenue was comprised of the following: (i) an
approximate $4.3 million increase in reimbursed costs of services; and (ii) an
approximate $600,000 increase in the Company's Business Services fees derived
from the managed Medical Practices' net revenue and/or earnings, and (iii) $2.5
million from pharmaceutical sales.
Total costs of services as a percentage of revenue increased by 2.4% to
79.6% in 1999 as compared to 77.2% in 1998. Employee compensation and related
expenses, direct materials, depreciation and other expenses increased primarily
due to factors attributed to increasing revenues. These factors include
infrastructure expansion for various Reproductive Science Centers, including
Shady Grove, Bay Area, and Boston.
Contribution increased to $9.4 million in 1999 as compared to $8.8 million
in 1998 due to the factors attributed to increasing revenues. The contribution
margin decreased to 20.4% of revenues in 1999 from 22.8% in 1998 primarily due
to reimbursed services, which do not provide a margin, accounting for a higher
percent of revenues and new service offerings with a lower contribution margin.
General and administrative expenses for 1999 were approximately $6.1
million as compared to approximately $5.3 million in 1998, an increase of 14.5%,
primarily due to increases in staffing, legal expenses, and expenses related to
the implementation of the ARTWorks system.
Amortization of intangible assets was $2.4 million in 1999 as compared to
$1.0 million in 1998. The majority of this increase is attributed to a one-time
charge of $1.35 million associated with accelerated amortization of Right to
Manage fees of the Kansas City and Dallas Reproductive Science Centers.
Interest income for 1999 decreased to $65,000 from $91,000 for 1998, due to
a lower invested cash balance. Interest expense for 1999 decreased to $412,000
from $432,000 in 1998, primarily due to payoffs of notes payable to the
physician practice at Shady Grove.
The provision for income taxes is primarily related to state taxes as the
Company has utilized available net operating loss carryforwards to eliminate any
Federal tax provision. The provision for income taxes decreased 29.4% for the
year ending December 31, 1999 as compared to 1998, due to a change in effective
tax rates as a result of tax planning initiatives.
Income from continuing operations, excluding restructuring and other
charges, was approximately $300,000 in 1999 as compared to $1.9 million for
1998. The decrease was primarily due to the approximate $600,000 increase in
contribution and a $100,000 reduction in income tax expense, which was offset by
an $800,000 increase in general and administrative expenses and a $1.4 million
increase in amortization of intangible assets.
17
Liquidity and Capital Resources
Historically, the Company has financed its operations primarily through
cashflow, sales of equity securities and bank financings. As of December 31,
2000, the Company had working capital of approximately $4.9 million, compared to
$5.7 million in 1999. The net decrease in working capital was primarily due to
debt repayments of $1.7 million and the repurchase of approximately 850,000
shares of common stock for an aggregate purchase price of $2.6 million.
In September 1998, the Company obtained from Fleet Bank, N.A. ("Fleet") a
$13.0 million credit facility (the "New Credit Facility"). The New Credit
Facility is comprised of a $4.0 million three-year working capital revolver, a
$5.0 million three-year acquisition revolver and a $4.0 million 5.5 year term
loan. Upon closing of the New Credit Facility, the Company drew the entire $4.0
million available under the term loan to repay in full its balance outstanding
with First Union National Bank of $2,250,000 and for working capital purposes as
well as Common Stock repurchases. Availability of borrowings under the working
capital revolver are based on eligible accounts receivable as defined.
Availability of borrowings under the acquisition revolver will be based on
financial covenants and eligibility criteria with respect to each proposed
acquisition. As of December 31, 2000, under the working capital and acquisition
revolvers, there were no amounts outstanding and an aggregate amount of
approximately $9.0 million was available.
The Company does not have any significant commitments for the acquisition
of fixed assets.
New Accounting Standards
Pursuant to the Securities and Exchange Commission's Staff Accounting
Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements," the Company
has reviewed its accounting policy for the recognition of revenue. SAB No. 101
was required to be implemented in fourth quarter 2000. SAB No. 101 provides
guidance on applying generally accepted accounting principles to revenue
recognition in financial statements. The Company's policy for revenue
recognition is consistent with the views expressed within SAB No. 101.
Forward Looking Statements
This Form 10-K and discussions and/or announcements made by or on behalf of
the Company, contain certain forward-looking statements regarding events and/or
anticipated results within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the attainment of which
involve various risks and uncertainties. Forward-looking statements may be
identified by the use of forward-looking terminology such as, "may", "will",
"expect", "believe", "estimate", "anticipate", "continue", or similar terms,
variations of those terms or the negative of those terms. The Company's actual
results may differ materially from those described in these forward-looking
statements due to the following factors: the Company's ability to acquire
additional Business Services agreements, including the Company's ability to
raise additional debt and/or equity capital to finance future growth, the loss
of significant Business Services agreement(s), the profitability or lack thereof
at Reproductive Science Centers serviced by the Company, increases in overhead
due to expansion, the exclusion of fertility and ART services from insurance
coverage, government laws and regulation regarding health care, changes in
managed care contracting, the timely development of and acceptance of new
fertility, and ART and/or genetic technologies and techniques.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
ITEM 8. Financial Statements and Supplementary Data
See Index to Financial Statements and Financial Statement Schedule
on page F-1.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
Information with respect to the executive officers and directors of the
Company is incorporated by reference from the Company's Proxy Statement relating
to the Annual Meeting of Shareholders to be held on May 22, 2001.
ITEM 11. Executive Compensation
This information is incorporated by reference from the Company's Proxy
Statement relating to the Annual Meeting of Shareholders to be held on May 22,
2001.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
This information is incorporated by reference to the Company's Proxy
Statement relating to the Annual Meeting of Shareholders to be held on May 22,
2001.
ITEM 13. Certain Relationships and Related Transactions
This information is incorporated by reference to the Company's Proxy
Statement relating to the Annual Meeting of Shareholders to be held on May 22,
2001.
PART IV
ITEM 14. Exhibits, Financial Statements, Schedule, and Reports on Form 8-K
(a) (1) and (2) Financial Statements and Financial Statement Schedule.
See Index to Financial Statements and Financial Statement
Schedule on page F-1.
(3) The exhibits that are listed on the Index to Exhibits
herein which are filed herewith as a management agreement
or compensatory plan or arrangement are: 10.113 (c) and
10.113 (d).
(b) Reports on Form 8-K.
None.
(c) Exhibits. The list of exhibits required to be filed with this
Annual Report on Form 10-K is set forth in the Index to Exhibits
herein.
18
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Item 8 and 14 (a)(1) and (2)
Contents
Page
INTEGRAMED AMERICA, INC.
Report of Independent Accountants.......................................F-2
Consolidated Balance Sheets as of December 31, 2000 and 1999............F-3
Consolidated Statements of Operations for the years ended
December 31, 2000, 1999 and 1998.....................................F-4
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 2000, 1999 and 1998........................F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998....................................F-6
Notes to Consolidated Financial Statements..............................F-7
FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants on Financial Statement Schedule...S-1
Valuation and Qualifying Accounts...................................S-2
F-1
Report of Independent Accountants
To the Board of Directors and Shareholders of
IntegraMed America, Inc.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of IntegraMed
America, Inc. and its subsidiaries at December 31, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 6, 2001
F-2
INTEGRAMED AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(all amounts in thousands, except share amounts)
December 31,
--------------
2000 1999
------ ------
ASSETS
Current assets:
Cash and cash equivalents.................................................................. $ 5,306 $ 3,650
Patient accounts receivable, less allowance for doubtful accounts
of $1,457 and $851 in 2000 and 1999, respectively (see Note 2)........................... 10,991 10,460
Business Service fees receivable........................................................... 237 890
Prepaids and other current assets.......................................................... 1,283 1,162
------- -------
Total current assets................................................................... 17,817 16,162
Fixed assets, net (see Note 8)................................................................ 5,337 5,965
Intangible assets, net (see Note 9)........................................................... 17,774 18,163
Other assets.................................................................................. 367 525
------- -------
Total assets........................................................................... $41,295 $40,815
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................................................... $ 1,700 $ 1,080
Accrued liabilities (see Note 10).......................................................... 5,059 2,948
Due to Medical Practices................................................................... 2,450 1,768
Current portion of long-term notes payable and other obligations (see Note 11)............. 1,135 1,691
Patient deposits........................................................................... 2,530 2,970
------- -------
Total current liabilities.............................................................. 12,874 10,457
------- -------
Long-term notes payable and other obligations (see Note 11)................................... 2,434 3,719
------- -------
Shareholders' equity:
Preferred Stock, $1.00 par value 3,165,644 shares authorized in 2000 and 1999
-- 2,500,000 undesignated; 665,644 shares designated as Series A Cumulative
Convertible of which 165,644 were issued and outstanding in 2000 and 1999,
respectively............................................................................. 166 166
Common Stock, $.01 par value--50,000,000 shares authorized
in 2000 and 1999; 5,413,571 and 5,368,960 shares issued in 2000 and 1999, respectively... 54 54
Capital in excess of par................................................................... 54,149 54,140
Accumulated deficit........................................................................ (23,313) (25,230)
Treasury Stock, at cost-- 1,600,013 and 746,863 shares in 2000 and 1999, respectively...... (5,069) (2,491)
------- -------
Total shareholders' equity............................................................. 25,987 26,639
------- -------
Total liabilities and shareholders' equity............................................. $41,295 $40,815
======= =======
See accompanying notes to the consolidated financial statements.
F-3
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(all amounts in thousands, except per share amounts)
For the years ended December 31,
--------------------------------
2000 1999 1998
--------- ------- --------
Revenues, net (see Note 2)...................................................... $57,864 $45,955 $38,590
Costs of services incurred:
Employee compensation and related expenses................................... 22,103 17,765 14,763
Direct materials............................................................. 11,954 6,307 4,864
Occupancy costs.............................................................. 3,356 2,890 2,814
Depreciation................................................................. 1,249 1,424 1,343
Other expenses............................................................... 10,143 8,170 5,994
------- ------- -------
Total costs of services incurred........................................... 48,805 36,556 29,778
------- ------- -------
Contribution.................................................................... 9,059 9,399 8,812
------- ------- -------
General and administrative expenses............................................. 5,880 6,084 5,316
Amortization of intangible assets............................................... 865 2,410 962
Interest income................................................................. (211) (65) (91)
Interest expense................................................................ 421 412 432
------- ------- -------
Total other expenses......................................................... 6,955 8,841 6,619
------- ------- -------
Restructuring and other charges (see Note 7).................................... -- -- 2,084
Income from continuing operations before income taxes........................... 2,104 558 109
Provision for income taxes...................................................... 187 240 340
------- ------- -------
Income (loss) from continuing operations........................................ 1,917 318 (231)
Discontinued operations (see Note 6):
Loss from operations of discontinued AWM Division (less
applicable income taxes of $0)............................................. -- -- 923
Loss from disposal of AWM Division........................................... -- -- 3,578
------- ------- -------
Net income (loss)............................................................... 1,917 318 (4,732)
Less: Dividends paid and/or accrued on Preferred Stock.......................... 133 133 133
------- ------- -------
Net income (loss) applicable to Common Stock.................................... $ 1,784 $ 185 $(4,865)
======= ======= =======
Basic and diluted net earnings (loss) per share of Common Stock (see Note 13):
Continuing operations...................................................... $ 0.43 $ 0.04 $ (0.07)
Discontinued operations.................................................... -- -- (0.87)
------- ------- -------
Net earnings (loss)........................................................ $ 0.43 $ 0.04 $ (0.94)
======= ======= =======
Basic and diluted net earnings (loss) per share of Common Stock................. $ 0.43 $ 0.04 $ (0.94)
======= ======= =======
Weighted average shares - basic................................................. 4,110 4,874 5,202
======= ======= =======
Weighted average shares - diluted............................................... 4,172 4,951 5,202
======= ======= =======
See accompanying notes to the consolidated financial statements.
F-4
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(all amounts in thousands, except share amounts)
Cumulative
Convertible Common
Preferred Stock Stock Capital in Accumulated Treasury Stock
Amount Amount Excess of Par Deficit Shares Amount
--------------- ------ ------------- ----------- ------ ------
BALANCE AT DECEMBER 31, 1997..... $166 $43 $46,600 $(20,816) -- --
Issuance of Common Stock, net of
issuance costs.............. -- 8 5,418 -- -- --
Issuance of Common Stock
for acquisition............. -- 2 1,512 -- -- --
Issuance of warrants to purchase
Common Stock................. -- -- 216 -- -- --
Dividends paid to preferred
shareholders ............... -- -- (133) -- -- --
Exercise of Common Stock options. -- -- 99 -- -- --
Purchase of Treasury Stock....... -- -- -- -- 340,500 $(1,000)
Net loss......................... -- -- -- (4,732) -- --
---- --- ------- ------- ------- -------
BALANCE AT DECEMBER 31, 1998..... 166 53 53,712 (25,548) 340,500 (1,000)
Issuance of Common Stock, net of
issuance costs............... -- 1 176 -- -- --
Issuance of warrants to purchase
Common Stock................. -- -- 385 -- -- --
Dividends paid to preferred
shareholders ................ -- -- (133) -- -- --
Purchase of Treasury Stock....... -- -- -- -- 406,363 (1,491)
Net income....................... -- -- -- 318 -- --
---- --- ------- ------- ------- -------
BALANCE AT DECEMBER 31, 1999..... 166 54 54,140 (25,230) 746,863 (2,491)
Issuance of Restricted Stock Grants. -- -- 142 -- -- --
Dividends paid to preferred
shareholders ................ -- -- (133) -- -- --
Purchase of Treasury Stock....... -- -- -- -- 853,150 (2,578)
Net income....................... -- -- -- 1,917 -- --
---- --- ------- ------- ------- -------
BALANCE AT DECEMBER 31, 2000..... $166 $ 54 $54,149 $(23,313)1,600,013 $(5,069)
==== ==== ======= ======== ========= =======
See accompanying notes to the consolidated financial statements.
F-5
INTEGRAMED AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all amounts in thousands)
For the years ended December 31,
----------------------------------
2000 1999 1998
-------- -------- --------
Cash flows from operating activities:
Net income (loss)............................................ $ 1,917 $ 318 $(4,732)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization.............................. 2,562 4,183 2,582
Writeoff of fixed and intangible assets.................... -- -- 5,541
Changes in assets and liabilities net of effects from
acquired businesses--
Decrease (increase) in assets:
Patient accounts receivable................................ (531) 289 (2,608)
Business Service fees receivable........................... 653 454 (1,253)
Prepaids and other current assets.......................... (121) 299 (87)
Other assets............................................... 158 (81) (53)
Increase (decrease) in liabilities:
Accounts payable........................................... 620 396 (1,091)
Accrued liabilities........................................ 2,384 (450) (263)
Due to Medical Practices................................... 682 (109) 132
Patient deposits........................................... (440) 127 1,440
------- ------- -------
Net cash provided by (used in) operating activities.............. 7,884 5,426 (392)
------- ------- -------
Cash flows used in investing activities:
Payment for exclusive Business Services rights and acquired
physician practices........................................ (476) (448) (3,164)
Purchase of net liabilities (assets) of acquired businesses.. -- -- 487
Purchase of fixed assets and leasehold improvements.......... (1,352) (2,251) (1,668)
Proceeds from sale of fixed assets and leasehold
improvements............................................... 10 64 135
------- ------- -------
Net cash (used in) investing activities.......................... (1,818) (2,635) (4,210)
------- ------- -------
Cash flows (used in) provided by financing activities:
Proceeds from issuance of Common Stock....................... -- -- 5,500
Proceeds from issuance of Restricted Stock Grants............ 142 -- --
Proceeds from issuance of notes.............................. -- 150 --
Used for stock issue costs................................... -- -- (74)
Proceeds from bank under Credit Facility..................... -- -- 6,000
Principal repayments on debt................................. (1,712) (1,815) (2,900)
Principal repayments under capital lease obligations......... (129) (93) (115)
Repurchase of Common Stock................................... (2,578) (1,491) (1,000)
Dividends paid on Convertible Preferred Stock................ (133) (133) (597)
Proceeds from exercise of Common Stock options............... -- -- 99
------- ------- -------
Net cash (used in) provided by financing activities.............. (4,410) (3,382) 6,913
------- ------- -------
Net increase (decrease) in cash.................................. 1,656 (591) 2,311
Cash at beginning of period...................................... 3,650 4,241 1,930
------- ------- -------
Cash at end of period............................................ $ 5,306 $ 3,650 $ 4,241
======= ======= =======
See accompanying notes to the consolidated financial statements.
F-6
INTEGRAMED AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- THE COMPANY:
IntegraMed America, Inc. (the "Company") offers products and services to
patients, providers, payors and pharmaceutical manufacturers in the fertility
industry. The IntegraMed Network is comprised of twenty-two fertility centers in
major markets across the United States, a pharmaceutical subsidiary, a financing
subsidiary, the Council of Physicians and Scientists, and a leading fertility
portal (www.integramed.com). Seventeen fertility centers have access to the
Company's FertilityDirect Program that provides contracted fertility centers
with exclusive access to the Company's products and services that support
patient recruitment. Five of the fertility centers are designated as
"Reproductive Science Centers(R)" and as such, have access to the Company's
FertilityDirect Program in addition to being provided with a full range of
services including: (i) administrative services, including accounting and
finance, human resource functions, and purchasing of supplies and equipment;
(ii) access to capital; (iii) marketing and sales; (iv) integrated information
systems; (v) assistance in identifying best clinical practices; and (vi)
laboratory services (collectively, "Business Services").
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of consolidation--
The consolidated financial statements comprise the accounts of IntegraMed
America, Inc. and its wholly owned subsidiaries. All significant intercompany
transactions have been eliminated. The Company derives its revenues from
Business Services contracts, patient service revenues and the sale of
pharmaceutical products. The Company does not consolidate the results of the
Reproductive Science Centers. Effective September 1, 1998, the Company disposed
of the Adult Women's Medical ("AWM") Division through a sale of its operations.
These consolidated financial statements are prepared in accordance with
generally accepted accounting principles which requires the use of management's
estimates. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue and cost recognition -
Reproductive Science Centers(R)
As of December 31, 2000, the Company provided comprehensive Business
Services under five Business Services contracts. During the year ended December
31, 2000, the Company had also provided services under two agreements that were
terminated effective February 1 and December 31, 2000, respectively.
Under four of the current agreements, the Company receives as compensation
for its Business Services a three-part fee comprised of: (i) a percentage of net
revenues, (ii) reimbursed costs of services (costs incurred in servicing a
Medical Practice and any costs paid on behalf of the Medical Practice) and (iii)
a fixed or variable percentage of earnings after Business Services fees or an
additional variable percentage of net revenues.
Under the fifth current agreement, as compensation for its services, the
Company receives a fixed fee plus reimbursed costs of services.
F-7
INTEGRAMED AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
All fees are reported as "Revenues, net" by the Company. Direct costs
incurred by the Company in performing its services and costs incurred on behalf
of the Medical Practices are recorded in "Costs of services incurred". The
physicians receive as compensation all remaining earnings after payment of the
Company's fee.
The Company also distributes fertility related pharmaceutical products
through IntegraMed Pharmaceutical Services, Inc. ("IPSI"), a wholly owned
subsidiary. Through a management agreement with ivpcare, inc., IPSI ships
prescription-based pharmaceuticals directly to patients of the Reproductive
Science Centers. Revenue is derived from the sales price of these
pharmaceuticals and is recorded when shipments are made. All revenues and their
related costs are consolidated with those of the Reproductive Science Center
Business Services agreements.
AWM (Adult Women's Medical) Division --
In June 1998, the Company committed itself to a formal plan to dispose of
the AWM Division. On September 1, 1998, the Company disposed of the AWM Division
operations through a sale of certain of its fixed assets to a third party and
the third party's assumption of the employees, building lease, research
contracts, and medical records. The operating results of the AWM Division for
the eight-month period ended August 31, 1998 and the charges recorded by the
Company related to its disposal are reflected under "Discontinued Operations" in
the accompanying Consolidated Statement of Operations (See Note 6).
Cash and cash equivalents--
Cash and cash equivalents primarily include all highly liquid debt
instruments with original maturities of three months or less, recorded at cost,
which approximates market.
Patient accounts receivable--
Patient accounts receivable represent receivables for medical services
provided by the Medical Practices and for other products and services provided
by the Company's subsidiaries. Such amounts are recorded net of contractual
allowances and estimated bad debts. As of December 31, 2000 and 1999, of total
net patient accounts receivable of $10,991,000 and $10,460,000, respectively,
approximately $9,896,000 and $9,867,000, respectively, of patient accounts
receivable were a function of Reproductive Science Center revenue (i.e., the
Company purchased the accounts receivable, net of contractual allowances, from
the Medical Practice (the "Purchased Receivables") and the remaining balances of
$1,095,000 and $593,000, respectively, were a function of net revenues of the
Company (see -- "Revenue and cost recognition" above). Risk of loss in
connection with uncollectiblity of Purchased Receivables is partially borne by
the Company in an amount equal to the Company's proportionate share of revenues
and/or earnings, which are paid to the Company from the Medical Practice as its
Business Services fee. Risk of loss in connection with uncollectibility of
patient accounts receivable which are a function of net revenues of the Company
is borne by the Company.
Business Services fees receivable --
Business Services fees receivable in 2000 represent fees owed to the
Company by one medical center pursuant to the respective Business Services
agreement. Business Services fees receivable in 1999 represent fees owed to the
Company primarily for repayment of advances to the Medical Practices pursuant to
the respective agreements with these Medical Practices (See "Revenue and cost
recognition" above).
Fixed assets--
Fixed assets are valued at cost less accumulated depreciation and
amortization. Depreciation is computed on a straight-line basis over the
estimated useful lives of the related assets, generally three to five years.
Leasehold improvements are amortized over the shorter of the asset life or the
remaining term of the lease. Assets under capital leases are amortized over the
term of the lease agreements. The Company periodically reviews the fair value of
fixed assets, the results of which have had no material effect on the Company's
financial position or results of operations.
F-8
When assets are retired or otherwise disposed of, the costs and related
accumulated depreciation are removed from the accounts. The difference between
the net book value of the assets and proceeds from disposition is recognized as
gain or loss. Routine maintenance and repairs are charged to expenses as
incurred, while costs of betterments and renewals are capitalized.
Due to Medical Practices--
Due to Medical Practices primarily represents amounts owed by the Company
to the Medical Practices for the medical providers' share of the respective
Medical Practice earnings net of the Company's advances to the Medical Practice,
if any. Due to Medical Practices excludes amounts owed by the Company to Medical
Practices for exclusive Business Services rights (see Note 11).
Stock based employee compensation--
The Company adopted Financial Accounting Standards No. 123, "Accounting for
Stock Based Compensation" ("FAS 123"), on January 1, 1996. Under FAS 123,
companies can, but are not required to, elect to recognize compensation expense
for all stock based awards, using a fair value method. The Company has adopted
the disclosure only provisions, as permitted by FAS 123.
Concentrations of credit--
Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
The Company's patient accounts receivables are primarily from third party
payors, principally insurance companies and health maintenance organizations.
Income taxes--
The Company accounts for income taxes utilizing the asset and liability
approach in accordance with Financial Accounting Standards No. 109 "Accounting
For Income Taxes" (FAS 109).
Earnings per share--
The Company determines earnings (loss) per share in accordance with
Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS 128"), which
the Company adopted in December 1997. All historical earnings (loss) per share
have been presented in accordance with FAS 128.
Fair value of financial instruments--
At December 31, 2000 and 1999, the carrying values of all financial
instruments, both short- and long-term, approximated their fair value.
NOTE 3 -- SEGMENT INFORMATION:
The Company is principally engaged in providing products and services to
the fertility market. For disclosure purposes, the Company recognizes Business
Services offered to it's network of Reproductive Science Centers and its
pharmaceutical distribution operations as separate reporting segments as follows
(000's omitted):
F-9
Business Pharmaceutical
Corporate Services Distribution Consolidated
--------- -------- ------------ ------------
For the Year ended December 31, 2000
Revenues............................... $ -- $48,175 $9,689 $57,864
Cost of Services....................... -- 39,447 9,358 48,805
------- ------- ------ -------
Contribution........................... -- $ 8,728 $ 331 $ 9,059
Other costs............................ 5,880 -- -- 5,880
Amortization of intangibles............ 14 844 7 865
Interest, net.......................... 214 5 (9) 210
------- ------- ------ -------
Income before income taxes............. $(6,108) $ 7,879 $ 333 $ 2,104
======= ======= ====== =======
Depreciation expense included above.... $ 448 $ 1,249 $ -- $ 1,697
Capital expenditures................... $ 199 $ 1,153 $ -- $ 1,352
Total assets........................... $ 3,335 $36,688 $1,272 $41,295
For the Year ended December 31, 1999
Revenues............................... $ -- $43,502 $2,453 $45,955
Cost of Services....................... -- 34,207 2,349 36,556
------- ------- ------ -------
Contribution........................... -- $ 9,295 $ 104 $ 9,399
Other costs............................ 6,084 -- -- $ 6,084
Amortization of intangibles............ 43 2,365 2 2,410
Interest, net.......................... 261 85 1 347
------- ------- ------ -------
Income before income taxes............. $(6,388) $ 6,845 $ 101 $ 558
======= ======= ====== =======
Depreciation expense included above.... $ 350 $ 1,423 $ -- $ 1,773
Capital expenditures................... $ 814 $ 1,969 $ -- $ 2,783
Total assets........................... $ 4,390 $35,318 $1,107 $40,815
For the Year ended December 31, 1998
Revenues............................... $ -- $38,590 $ -- $38,590
Cost of Services....................... -- 29,778 -- 29,778
------- ------- ------ -------
Contribution........................... -- 8,812 -- 8,812
Other costs............................ 5,316 -- -- 5,316
Restructuring costs.................... -- 2,084 -- 2,084
Amortization of intangibles............ 43 919 -- 962
Interest, net.......................... 159 182 -- 341
------- ------- ------ -------
Income before income taxes............. $(5,518) $ 5,627 $ -- $ 109
======= ======= ====== =======
Depreciation expense included above.... $ 170 $ 1,450 $ -- $ 1,620
Capital expenditures................... $ 544 $ 1,659 $ -- $ 2,203
Total assets........................... $ 5,377 $38,316 $ -- $43,693
F-10
NOTE 4 -- SIGNIFICANT BUSINESS SERVICE CONTRACTS:
For the years ended December 31, 2000, 1999, and 1998 the following
Reproductive Science Centers each individually provided greater than 10% of the
Company's Revenues, net and/or contribution as follows:
Percent of Company Percent of
Revenues, net Contribution
----------------------------- -------------------------
2000 1999 1998 2000 1999 1998
-------- ---------- --------- --------------------------
Boston......................... 13.7 16.0 15.8 17.1 23.4 21.7
Long Island.................... 10.4 9.4 9.1 6.7 5.7 5.3
New Jersey..................... 5.1 10.2 12.2 18.6 24.3 28.3
Illinois....................... 27.2 26.2 27.1 29.1 24.2 25.7
Shady Grove.................... 17.8 18.7 15.0 18.8 15.1 9.6
NOTE 5 -- ACQUISITIONS AND BUSINESS SERVICE AGREEMENTS:
The transactions detailed below were accounted for by the purchase method
and the purchase price has been allocated to the tangible and identifiable
intangible assets acquired based upon the estimated fair value at the date of
acquisition. The consolidated financial statements include the results of
operations of these transactions from their respective dates of acquisition.
In January 1998, the Company completed its second in-market merger with the
addition of two physicians to the FCI practice. The Company acquired certain
assets of Advocate Medical Group, S.C. ("AMG") and Advocate MSO, Inc. and
acquired the right to manage AMG's fertility practice conducted under the name
Center for Reproductive Medicine ("CFRM"). Simultaneous with the consummation of
this transaction, the Company amended its agreement with FCI to include two of
the three physicians practicing under the name CFRM. The aggregate purchase
price was approximately $1.5 million, consisting of approximately $1.2 million
in cash and 46,079 shares of Common Stock. The majority of the purchase price
was allocated to exclusive Business Services rights.
On March 12, 1998, the Company acquired the majority of the capital stock
of Shady Grove Fertility Centers, Inc., a Maryland business corporation
providing management services, and formerly a Maryland professional corporation
engaged in providing fertility services. Prior to the consummation of the
transaction, Shady Grove had entered into a twenty-five year management
agreement with Levy, Sagoskin and Stillman, M.D., P.C., an fertility physician
group practice comprised of six physicians and four locations surrounding the
greater Washington, D.C. area. The Company acquired the balance of the Shady
Grove capital stock on January 5, 1999. The aggregate purchase price for all of
the Shady Grove capital stock was $5.7 million, consisting of approximately $2.8
million in cash, approximately $1.4 million in Common Stock, and approximately
$1.5 million in promissory notes. The purchase price was allocated to the
various assets and liabilities assumed and the balance was allocated to
exclusive Business Services rights. On March 12, 1998, the Closing Date, the
following consideration was paid: (i) approximately $1.8 million in cash, (ii)
approximately $1.2 million in stock, or 159,888 shares of Common Stock, and
F-11
(iii) approximately $1.1 million in promissory notes. These notes bore interest
at 8.5% per annum, payable in two annual installments. The first installment was
paid on April 1, 1999, and the second installment was paid on April 1, 2000. On
January 5, 1999, the Second Closing Date, the balance of the purchase price was
paid as follows: (i) approximately $1.0 million in cash, (ii) approximately
$175,900 in stock, or 6,467 shares of Common Stock, and (iii) a $402,750
promissory note. This note bore interest at 10.17% per annum, payable in two
installments. The first note installment was paid on July 1, 1999, and the
second installment was paid on April 1, 2000. In addition, in January 1999, the
Company issued warrants to acquire 5,000 shares of Common Stock at $5.125 per
share to Robert J. Stillman, M.D. in connection with the Second Closing Date.
NOTE 6 -- DISCONTINUED OPERATIONS:
In June 1998, the Company committed itself to a formal plan to dispose of
the AWM Division operations. On September 1, 1998 the Company disposed of the
AWM Division operations through a sale of certain of its fixed assets to a third
party and the third party's assumption of the employees, building lease,
research contracts, and medical records. As of December 31, 2000 and 1999,
respectively, the Company's Consolidated Balance Sheet included $0 and $75,000
in notes payable related to the AWM Division. During the year ended December 31,
1998, the Company reported a loss from the disposal of the AWM Division of
approximately $3.6 million, which principally represented approximately $3.3
million related to the write-off of goodwill and $243,000 for estimated
operating losses during the phase-out period. During the eight-month period
ended August 31, 1998, the AWM Division recorded revenues of approximately $1.0
million.
NOTE 7 -- RESTRUCTURING AND OTHER CHARGES:
The Company recorded approximately $2.1 million in restructuring and other
charges in the year ended December 31, 1998. Such charges included approximately
$1.4 million associated with its termination of its agreement with the
Reproductive Science Center of Greater Philadelphia, a single physician
Reproductive Science Center, effective July 1, 1998, which primarily consisted
of exclusive Business Services right impairment and other asset write-offs. Such
charges also included approximately $700,000 for exclusive Business Services
right impairment losses related to two other single physician Reproductive
Science Centers. The latter impairment losses were recorded based upon the
Company's determination that the intangible asset balance was larger than the
respective Medical Practice's estimated future cash flow.
NOTE 8 -- FIXED ASSETS, NET:
Fixed assets, net at December 31, 2000 and 1999 consisted of the following
(000's omitted):
2000 1999
------ ------
Furniture, office and computer equipment.......... $4,457 $4,335
Medical equipment................................. 2,348 2,276
Leasehold improvements............................ 4,878 4,547
Assets under capital leases....................... 1,260 1,260
------ ------
Total........................................... 12,943 12,418
Less--Accumulated depreciation and amortization... (7,606) (6,453)
------ ------
$5,337 $5,965
====== ======
F-12
Depreciation expense on fixed assets for the years ended December 31, 2000,
1999 and 1998 was $1,697,000, $1,773,000 and $1,620,000, respectively. Assets
under capital leases primarily consist of computer equipment. Accumulated
amortization related specifically to capital leases at December 31, 2000, 1999
and 1998 was $870,000, $762,000 and $947,000, respectively.
NOTE 9 -- INTANGIBLE ASSETS:
Intangible assets at December 31, 2000 and 1999 consisted of the following
(000's omitted):
2000 1999
------- -------
Exclusive Business Services rights........... $20,471 $19,995
Trademarks................................... 186 186
------- -------
Total.................................... 20,657 20,181
Less accumulated amortization................ (2,883) (2,018)
------- -------
Total.................................... $17,774 $18,163
======= =======
Exclusive Business Services Rights and Other Intangible Assets--
Exclusive Business Services rights and other intangible assets represent
costs incurred by the Company for the right to service and/or acquire certain
Reproductive Science Centers and are valued at cost less accumulated
amortization. During the year ended December 31, 2000, the Company capitalized
additional Exclusive Business Services rights of $476,000 related to the Shady
Grove Fertility Center Management agreement. During the year ended December 31,
1999, the Company recorded a charge to earnings of $1.35 million to accelerate
the unamortized portion of Business Services Rights associated with its
remaining single physician Business Services agreements.
Trademarks --
Trademarks represent trademarks, service marks, trade names and logos
purchased by the Company and are valued at cost less accumulated amortization.
Amortization and recoverability--
The Company periodically reviews its intangible assets to assess
recoverability; any impairments would be recognized in the consolidated
statement of operations if a permanent impairment were determined to have
occurred. Recoverability of intangibles is determined based on undiscounted
expected earnings from the related business unit or activity over the remaining
amortization period. Exclusive Business Services rights are amortized over the
term of the respective agreement, usually ten to twenty-five years. Trademarks
are amortized over five to seven years. As of December 31, 2000, accumulated
amortization of exclusive Business Services rights and trademarks was $2,701,000
and $182,000, respectively. As of December 31, 1999, accumulated amortization of
exclusive Business Services rights and trademarks was $1,850,000 and $168,000,
respectively.
F-13
NOTE 10 -- ACCRUED LIABILITIES:
Accrued liabilities at December 31, 2000 and 1999 consisted of the
following (000's omitted):
2000 1999
------ ------
Deferred revenue related to terminated contract.... $1,440 $ --
Reserves for estimated refunds..................... 414 --
Deferred compensation.............................. -- 387
Accrued hospital contract.......................... 265 --
Accrued incentives................................. 381 --
Accrued state taxes................................ 636 575
Deferred rent...................................... -- 296
Accrued facility disposal costs.................... -- 322
Other.............................................. 1,923 1,368
------ ------
Total accrued liabilities.......................... $5,059 $2,948
====== ======
NOTE 11 -- NOTES PAYABLE AND OTHER OBLIGATIONS:
Debt at December 31, 2000 and 1999 consisted of the following (000's
omitted):
2000 1999
------ ------
Note payable to bank................................ $3,250 $4,000
Acquisition notes payable........................... -- 75
Acquisition obligation.............................. -- 737
Obligations under capital lease..................... 319 448
Other notes payable................................. -- 150
------ ------
Total notes payable and other obligations........... 3,569 5,410
Less--Current portion............................... (1,135) (1,691)
------ ------
Long-term notes payable and other obligations....... $2,434 $3,719
====== ======
Note payable to Bank--
In September 1998, the Company obtained from Fleet Bank, N.A. a $13.0
million credit facility. This credit facility was subsequently amended in
September 1998 to allow for the Company's repurchase of Common Stock noted
below, and for the repayment of dividends in arrears on the Company's
Convertible Preferred Stock. The facility is comprised of a $4.0 million
three-year working capital revolver, a $5.0 million three-year acquisition
revolver and a $4.0 million 5.5 year term loan. Each component bears interest by
reference to Fleet's prime rate or LIBOR, at the Company's option, plus a margin
ranging from 0.00% to 0.25% in the case of prime-based loans or 2.75% to 3.00%
in the case of LIBOR-based loans, which margins vary based on a leverage test.
Interest on the prime-based loans is payable monthly and interest on LIBOR-based
loans is payable on the last day of each applicable interest period. Borrowings
under the term loan will require only interest payments for the first twenty
months. Upon closing of the credit facility, the Company drew the entire $4.0
million available under the term loan to repay in full its $2,250,000 balance
F-14
outstanding with First Union National and for working capital purposes. The
Company will continue to utilize a portion of the term loan proceeds to finance
the consideration of Common Stock repurchases. As of December 31, 2000, the
Company had repurchased 1,600,013 shares of its Common Stock for an aggregate
cost of approximately $5.1 million. As of December 31, 2000, interest on the
term loan was payable at a rate of 9.44%. Unused amounts under the working
capital and acquisition revolvers bear a commitment fee of 0.25% and 0.20%,
respectively. Availability of borrowings under the working capital revolver are
based on eligible accounts receivable as defined. Availability of borrowings
under the acquisition revolver will be based on financial covenants and
eligibility criteria with respect to each proposed acquisition. As of December
31, 2000, under the working capital and acquisition revolvers, there were no
amounts outstanding and an aggregate amount of approximately $9.0 million was
available, exclusive of additional amounts, which may become available as a
result of completing additional acquisitions. The Fleet credit facility is
collateralized by all of the Company's assets.
Acquisition notes payable--
In March 1998, the Company issued $1,127,000 in promissory notes as partial
consideration for the acquisition of the capital stock of Shady Grove Fertility
Centers, Inc. These notes were paid in full during the year ended December 31,
2000.
In June 1996, the Company purchased a 51% interest in National Menopause
Foundation for a total purchase price of $650,000, of which $50,000 was paid at
closing with the balance to be paid in sixteen quarterly installments of $37,500
beginning September 1, 1996. Interest is payable quarterly at the rate of 4.16%.
The final balance of the note was paid in the second quarter of 2000. As of
December 31, 2000 and 1999, the note payable balance was $0 and $75,000,
respectively.
Exclusive Business Services rights obligations --
Exclusive Business Services rights obligations represent the liability owed
by the Company to certain Medical Providers for the cost of acquiring the
exclusive right to manage the non-medical aspects of their fertility practices.
In connection with the Company's termination of its agreement with the
Reproductive Science Center of Dallas effective March 31, 1999, and pending
ongoing arbitration, the Company's exclusive right obligation of $257,500 was
netted against receivables owed from the physician-owner in Dallas.
The exclusive right obligation of $263,333 due to the Reproductive Science
Center of Kansas City was netted against the receivable of $1.1 million due from
the physician-owner in connection with a new contract effective May 1, 1999.
Acquisition obligation--
The acquisition obligation at December 31, 1999 represented the amount owed
by the Company to acquire the balance of the capital stock of Shady Grove
Fertility Centers, Inc. The balance of this obligation, bearing interest at
10.17%, was paid on April 1, 2000.
At December 31, 2000, aggregate note payments, excluding capital lease
obligation payments, in future years were as follows (000's omitted):
2001........................................... $1,000
2002........................................... 1,000
2003........................................... 1,000
2004........................................... 250
Thereafter..................................... --
------
Total payments................................. $3,250
======
F-15
Obligations under capital lease--
Capital lease obligations relate primarily to computer and data processing
equipment for the Reproductive Science Centers. The current portion of capital
lease obligations, excluding interest, was approximately $135,000 at December
31, 2000.
The Company has operating leases for its corporate headquarters and for
medical office space relating to its managed Reproductive Science Centers. The
Company also has operating leases for certain medical equipment. Aggregate
rental expense under operating leases was $2,635,000, $2,174,000, and $1,750,000
for the years ended December 31, 2000, 1999 and 1998, respectively.
At December 31, 2000, the minimum lease payments for assets under capital
and noncancelable operating leases in future years were as follows (000's
omitted):
Capital Operating
------- ---------
2001.................................... $155 $ 2,169
2002.................................... 155 1,890
2003.................................... 39 1,681
2004.................................... -- 1,682
2005.................................... -- 1,515
Thereafter.............................. -- 3,359
---- -------
Total minimum lease payments............ $349 $12,296
=======
Less-- Amount representing interest..... 30
----
Present value of minimum lease payments $319
====
NOTE 12 -- INCOME TAXES
The deferred tax provision was determined under the asset and liability
approach. Deferred tax assets and liabilities were recognized on differences
between the book and tax basis of assets and liabilities using presently enacted
tax rates. The provision for income taxes was the sum of the amount of income
tax paid or payable for the year as determined by applying the provisions of
enacted tax laws to the taxable income for that year and the net change during
the year in the Company's deferred tax assets and liabilities. The provision for
the years ended December 31, 2000, 1999 and 1998 of $187,000, $240,000, and
$340,000 respectively, was comprised of current state taxes payable.
The Company's deferred tax asset primarily represented the tax benefit of
operating loss carryforwards. However, such deferred tax asset was fully reduced
by a valuation allowance due to the uncertainty of its realization.
At December 31, 2000, the Company had net operating loss carryforwards of
approximately $16.9 million, which expire in 2002 through 2014. For tax
purposes, there is an annual limitation of approximately $2.0 million on the
utilization of net operating losses resulting from changes in ownership
attributable to the Company's May 1993 Preferred Stock Offering and the August
1997 Common Stock Offering and FCI acquisition.
F-16
Significant components of the deferred tax assets (liabilities) at December
31, 2000 and 1999 were as follows (000's omitted):
December 31,
-------------------
2000 1999
------ -------
Net operating loss carryforwards............ $5,746 $6,392
Other....................................... -- 102
Valuation allowance......................... (5,746) (6,494)
------ ------
Deferred tax assets......................... -- --
Deferred tax liabilities.................... -- --
------ ------
Net deferred taxes.......................... $ -- $ --
====== ======
The financial statement income tax provision differed from income taxes
determined by applying the statutory Federal income tax rate to the financial
statement income or loss before income taxes for the years ended December 31,
2000, 1999 and 1998 as a result of the following (000's omitted):
For the years ended December 31,
---------------------------------
2000 1999 1998
----- ---- -------
Tax expense (benefit) at Federal statutory rate...... $652 $190 $(1,537)
State income taxes................................... 187 240 340
Net operating loss (utilization) or addition......... (652) (190) 1,537
---- ---- -------
Provision for income taxes........................... $187 $240 $ 340
==== ==== =======
NOTE 13 -- EARNINGS PER SHARE:
The reconciliation of the numerators and denominators of the basic and
diluted EPS computations for the years ended December 31, 2000, 1999 and 1998 is
a follows (000's omitted, except for per share amounts):
For the years ended December 31,
--------------------------------
2000 1999 1998
--------- ------- ---------
Numerator
Income (loss) from continuing operations................. $1,917 $ 318 $ (231)
Less: Preferred stock dividends paid and/or accrued...... 133 133 133
------ ----- ------
Income (loss) from continuing operations
available to Common Stock.............................. $1,784 $ 185 $ (364)
====== ===== ======
Denominator
Weighted average shares outstanding...................... 4,110 4,874 5,202
Effect of dilutive options and warrants.................. 62 77 --
------ ----- ------
Weighted average shares and dilutive potential
Common shares.......................................... 4,172 4,951 5,202
====== ===== ======
Basic and diluted EPS from continuing operations......... $ 0.43 $0.04 $(0.07)
====== ===== ======
For the years ended December 31, 2000, 1999 and 1998, options to purchase
approximately 494,000, 361,000, and 400,000 shares, respectively, of Common
Stock at exercise prices ranging from $2.97 to $5.00, $4.12 to $5.00, and $2.50
to $15.00 per share, respectively, were excluded in computing the diluted per
share amounts as they were antidilutive.
For the years ended December 31, 2000, 1999 and 1998, warrants to purchase
approximately 103,000, 103,000, and 176,000 shares, respectively, of Common
Stock at exercise prices ranging from $4.12 to $8.54, $4.12 to $8.54, and $0.04
to $8.54 per share, respectively, were excluded in computing the diluted per
share amounts as they were antidilutive.
F-17
For the years ended December 31, 2000, 1999 and 1998, approximately
133,000, 133,000, and 131,000 shares, respectively, of Common Stock from the
assumed conversion of Preferred Stock were excluded in computing the diluted per
share amounts as they were antidilutive.
NOTE 14 -- SHAREHOLDERS' EQUITY:
In July 2000, the Company issued 44,610 restricted stock grants to several
officers of the Company for an aggregate amount of $142,306.
The Board of Directors authorized a 1-for-4 reverse stock split of its
outstanding shares of Common Stock through an amendment to the Company's Amended
and Restated Certificate of Incorporation which was approved by the Company's
stockholders at a Special Meeting of Stockholders held on November 17, 1998.
Effective November 17, 1998, every four shares of Common Stock were converted
into one share of Common Stock
The Board of Directors has authorized the repurchase of up to $6 million of
the Company's outstanding shares of Common Stock from time to time on the open
market at prevailing market prices or through privately negotiated transactions.
The Company has and will continue to utilize a portion of the proceeds of the
term loan component of the New Credit Facility to finance a portion of the price
of the stock repurchases. As of December 31, 2000, the Company had repurchased
1,600,013 shares of its Common Stock for an aggregate cost of approximately $5.1
million.
During the first quarter of 1998, the Company completed an equity private
placement of $5.5 million with Morgan Stanley Venture Partners' affiliates
providing for the purchase of 808,824 shares of the Company's Common Stock at a
price of $6.80 per share and 60,000 warrants to purchase shares of the Company's
Common Stock, at a nominal exercise price. The Company used a portion of these
funds to acquire the capital stock of Shady Grove Fertility Centers, Inc. (see
Note 5). Subsequent to December 31, 2000, these shares were reacquired by the
Company (see Note 20).
In March and April 1998, pursuant to amendments to the Bay Area, FCI and
Shady Grove Business Services agreements, the Company issued immediately vested
warrants to purchase an aggregate of 37,500 shares of Common Stock, at a
weighted average exercise price of $7.08 per share to the shareholder physicians
of the respective medical practices in exchange for an extension of the term of
the Company's respective agreements from twenty to twenty-five years. In
December 1998, the exercise price of each of these warrants was amended to $4.12
per share. In November 1998, pursuant to an amendment to the Boston Business
Services agreement, the Company issued warrants to purchase an aggregate of
40,625 shares of Common Stock (the "Boston Warrants") to the shareholder
physicians of the respective medical practice in exchange for an extension of
the term of the Company's respective agreements from ten to twenty-five years.
Twenty percent of the Boston Warrants vested immediately and have an exercise
price of $4.12. The balance of the Boston Warrants vest in annual 20% increments
at an exercise price which increases annually by 20% commencing November 18,
1999. The aggregate fair value of warrants issued in 1998 of approximately
$216,000 was capitalized and will be amortized over the remaining life of the
agreements.
The anti-dilution rights of the Series A Cumulative Convertible Preferred
Stock (the "Convertible Preferred Stock") provide that the conversion rate of
the Convertible Preferred Stock is subject to increase as a result of the
issuance of the Common Stock. As of December 31, 2000, each share of Convertible
Preferred Stock was convertible into Common Stock at a conversion rate equal to
approximately 0.80 shares of Common Stock for each share of Convertible
Preferred Stock.
F-18
As of December 31, 2000, an aggregate of 163,032 warrants were outstanding
at a weighted average exercise price of $3.53.
NOTE 15 -- STOCK OPTIONS:
Under the 1988 Stock Option Plan (as amended) (the "1988 Plan"), the 1992
Stock Option Plan (as amended) (the "1992 Plan") and the 2000 Stock Option Plan
(the "2000 Plan"), 40,407, 500,000 and 600,000 shares, respectively, are
reserved for issuance of incentive and non-incentive stock options. Under the
1988, 1992 and 2000 Plans, incentive stock options, as defined in Section 422 of
the Internal Revenue Code, may be granted only to employees and non-incentive
stock options may be granted to employees, directors and such other persons as
the Board of Directors (or a committee (the "Committee") appointed by the Board)
determines will contribute to the Company's success at exercise prices equal to
at least 100%, or 110% for a ten percent shareholder, of the fair market value
of the Common Stock on the date of grant with respect to incentive stock options
and at exercise prices determined by the Board of Directors or the Committee
with respect to non-incentive stock options. The 1988 Plan provides for the
payment of a cash bonus to eligible employees in an amount equal to that
required to exercise incentive stock options granted. Stock options issued under
both the 1988 and 2000 Plans are exercisable, subject to such conditions and
restrictions as determined by the Board of Directors or the Committee, during a
ten-year period, or a five-year period for incentive stock options granted to a
ten percent shareholder, following the date of grant; however, the maturity of
any incentive stock option may be accelerated at the discretion of the Board of
Directors or the Committee. Under the 1992 Plan, the Board of Directors or the
Committee determines the exercise dates of options granted; however, in no event
may incentive stock options be exercised prior to one year from date of grant.
Under the 1988, 1992 and 2000 Plans, the Board of Directors or the Committee
selects the optionees, determines the number of shares of Common Stock subject
to each option and otherwise administers the Plans. Under the 1988 Plan, options
expire one month from the date of the holder's termination of employment with
the Company or six months in the event of disability or death. Under the 1992
and 2000 Plans, options expire three months from the date of the holder's
termination of employment with the Company or twelve months in the event of
disability or death.
Under the 1994 Outside Director Stock Purchase Plan ("Outside Director
Plan"), 31,250 shares of Common Stock are reserved for issuance. Under the
Outside Director Plan, directors who are not full-time employees of the Company
may elect to receive all or a part of their annual retainer fees, the fees
payable for attending meetings of the Board of Directors and the fees payable
for serving on Committees of the Board, in the form of shares of Common Stock
rather than cash, provided that any such election be made at least six months
prior to the date that the fees are to be paid. As of December 31, 2000, 1999
and 1998, there were no options outstanding, respectively, under the Outside
Director Plan.
F-19
Stock option activity, under the 1988, 1992 and 2000 Plans combined, is
summarized as follows:
Number of
shares of
Common Stock
underlying Weighted Average
options exercise price
----------- ----------------
Options outstanding at December 31, 1997......................... 298,854 $7.60
Granted
Option Price = Fair Market Value............................ 143,813 6.22
Option Price > Fair Market Value............................ 307,596 4.12
Exercised........................................................ (28,649) 3.43
Canceled......................................................... (359,967) 7.90
-------- -----
Options outstanding at December 31, 1998......................... 361,647 $4.16
Granted
Option Price = Fair Market Value............................ 113,625 3.62
Option Price > Fair Market Value............................ -- --
Exercised........................................................ -- --
Canceled......................................................... (38,091) 3.86
--------- -----
Options outstanding at December 31, 1999......................... 437,181 $4.05
Granted
Option Price = Fair Market Value............................ 254,000 $2.99
Option Price > Fair Market Value............................ -- --
Exercised........................................................ -- --
Canceled......................................................... (77,332) $3.87
-------- -----
Options outstanding at December 31, 2000......................... 613,849 $3.63
Options exercisable at:
December 31, 1998........................................... 141,032 $4.30
December 31, 1999........................................... 206,742 $4.24
December 31, 2000........................................... 282,222 $4.12
Effective August 31, 1998, the Board of Directors approved a resolution to
reprice certain stock option agreements held by each officer, director and
employee of the Company, under the 1992 Incentive and Non-Incentive Stock Option
Plan and/or the 1998 Stock Option Plan. Per the resolution, stock option
agreements where the exercise price per share was greater than $4.12 were
amended to provide for an exercise price per share of $4.12 ("New Options").
Except for the exercise price of the New Options, all other terms and conditions
of the agreements remained in full force and effect. Per the resolution, options
to purchase approximately 81,500 shares of Common Stock were repriced. The
options which were repriced are included in options that were canceled during
1998 and the New Options are included in options granted at an option price
greater than fair market value.
Included in options that were canceled during 1999 and 1998 were
forfeitures of 6,301 and 252,480 with weighted average exercise prices of $4.12
and $7.71 respectively.
F-20
As of December 31, 2000, options outstanding and exercisable by price range
were as follows:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------------------------------------- --------------------------------
Outstanding Weighted-Average Exercisable
Range of as of Remaining Weighted-Average as of Weighted-Average
Exercise Prices 12/31/2000 Contractual Life Exercise Price 12/31/2000 Exercise Price
--------------- ------------ ---------------- ---------------- ----------- ----------------
$0.00 - $2.50 45,001 9.1 $2.06 5,001 $2.50
$2.51 - $4.00 263,813 9.0 $3.14 30,839 $3.07
$4.01 - $6.00 305,035 5.9 $4.28 246,382 $4.28
------- --- ----- ------- -----
613,849 7.5 $3.63 282,222 $4.12
======= =======
Pro forma information:
FAS 123 requires pro forma disclosures of net income and earnings per share
amounts as if compensation expense, using the fair value method, was recognized
for options granted after 1994. Using this approach, pro forma net income and
earnings per share for the year ended December 31, 2000 would be $70,000 and
$0.02 lower, respectively, versus reported amounts. Pro forma net income and
diluted income per share would be $129,000 and $0.03 lower, respectively, for
the year ended December 31, 1999. Pro forma net loss and loss per share for the
year ended December 31, 1998 would be $1,325,000 and $0.25 higher, respectively,
versus reported amounts. The weighted average fair value of options granted at
prices equal to fair market value during the years ended December 31, 2000, 1999
and 1998 was $1.78, $2.49 and $3.31, respectively. The weighted average fair
value for options granted at prices greater than fair market value during the
year ended December 31, 1999 was $2.64 . These values, which were used as a
basis for the pro forma disclosures, were estimated using the Black-Scholes
Options-Pricing Model with the following assumptions used for grants in the
years ended December 31, 2000, 1999, and 1998, respectively; dividend yield of
0% in each year; volatility of 40.0%, 73.7% and 109.9% in 2000, 1999 and 1998,
respectively; risk-free interest rate of 5.00%, 6.45% and 5.14% in 2000, 1999
and 1998, respectively; and an expected term of 10 years in 2000, 7.2 years in
1999, and 5 years in 1998.
These pro forma disclosures may not be representative of the effects for
future years since options vest over several years and options granted prior to
1995 are not considered in these disclosures. Also, additional awards generally
are made each year.
The Company recognizes compensation cost for stock-based employee
compensation plans over the vesting period based on the difference, if any,
between the quoted market price of the stock and the amount an employee must pay
to acquire the stock. Total compensation cost recognized in income for the years
ended December 31, 2000, 1999 and 1998 was $0, $0 and $6,000, respectively.
F-21
NOTE 16 -- QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for continuing operations for 2000 and
1999 (in thousands, except per share data) appear below:
Diluted
income (loss)
Income (loss) from per share from
Revenues, net Contribution continuing operations continuing operations
--------------- --------------- --------------------- ---------------------
2000 1999 2000 1999 2000 1999 2000 1999
---- ---- ---- ---- --------- --------- --------- --------
First quarter........ $13,608 $10,532 $1,970 $2,334 $290 $ 518 $0.06 $0.10
Second quarter ...... 13,527 10,860 2,079 2,498 368 526 0.08 0.10
Third quarter........ 14,810 11,862 2,432 2,390 440 385 0.10 0.07
Fourth quarter....... 15,919 12,700 2,578 2,176 819 (1,111) 0.20 (0.24)
Total year .......... $57,864 $45,955 $9,059 $9,399 $1,917 $ 318 $0.43 $0.04
The sum of the quarters for 2000 and 1999 may not equal the annual amount
due to rounding.
NOTE 17 -- COMMITMENTS AND CONTINGENCIES:
Operating Leases --
Refer to Note 11 for a summary of lease commitments.
Reliance on Third Party Vendors--
The Reproductive Science Centers, as well as all other medical providers
who deliver services requiring fertility medication, are dependent on three
third-party vendors that produce such medications (including but not limited to:
Lupron, Follistim, Repronex, GonalF and Pregnyl) that are vital to the provision
of fertility and ART services. Should any of these vendors experience a supply
shortage, it may have an adverse impact on the operations of the Reproductive
Science Centers. To date, the Reproductive Science Centers have not experienced
any such adverse impacts.
Employment Agreements --
The Company has entered into employment and change in control severance
agreements with certain of its management employees, which include, among other
terms, noncompetitive provisions and salary and benefits continuation. The
Company's minimum aggregate commitment under these agreements at December 31,
2000 was approximately $1.5 million.
Commitments to Medical Practices --
Pursuant to the majority of the Company's Business Services agreements, the
Company is obligated to perform the following: (i) advance funds to the
Reproductive Science Center to provide new services, utilize new technologies,
fund projects, etc.; and (ii) on or before the fifteenth business day of each
month purchase the net accounts receivable of the Reproductive Science Center
arising during the previous month and to transfer or pay to the Reproductive
Science Center such amount of funds equal to the net accounts receivable less
any amounts owed to the Company for Business Services fees and/or advances. Any
advances are to be repaid monthly and interest expense, computed at the prime
rate used by the Company's primary bank in effect at the time of the advance,
will be charged by the Company for funds advanced.
F-22
Litigation --
On October 1998, W.F. Howard, M.D., P.A., filed a lawsuit against the
Company in the District Court of Denton County, Texas, seeking to rescind the
agreement related to the Dallas Reproductive Science Center, or obtain damages,
on the basis that its practice has not realized the degree of growth or
increases as allegedly projected by the Company. The Complaint asserted alleged
breaches of contract, fiduciary duties and warranties, as well as a claim under
the Texas Deceptive Trade Practices Act, and claimed lost profit damages as well
as an exemplary award under statute. Plaintiff's claim was compromised in
December 2000 with a recovery by the Company and a discontinuance of the
lawsuit.
In July 1999, an action was filed in Middlesex Superior Court in
Massachusetts, against the Company, the Reproductive Science Center of Boston
(the "Center"), an independent genetic testing laboratory, and certain of their
respective employees. The Complaint in this matter was served on the Company in
March 2000. The action, filed by two former patients of the Center, arises out
of plaintiffs' participation during 1996 in an experimental program of
pre-implanation genetic testing. The plaintiffs allege professional negligence
and breach of contract/warranties resulting in the birth of their child who
suffers from cystic fibrosis. Plaintiffs seek damages of an undisclosed amount.
The Company's insurance carrier has appointed Massachusetts counsel to represent
the Company in the matter who is investigating the allegations in cooperation
with its co-defendant. The Company has been advised by counsel that although
such counsel can not predict the likely course of the litigation, such counsel
currently believes that by virtue of insurance coverage available to all the
defendants, the suit is not likely to have a material adverse effect on the
Company.
In April 1999, Integra, Inc. filed with the United States Patent and
Trademark Office ("USP&T") before the Trademark Trial and Appeal Board an
opposition to the granting of the Company's trademark "INTEGRAMED AMERICA",
claiming that the USP&T should deny registration of the Company's trademark.
Integra, Inc. allegedly distributes outcome based managed care products,
manuals, brochures, patient information and data forms for use in connection
with managed behavioral healthcare consulting and research services under the
mark "INTEGRA". Since the time of filing the opposition, counsel for the Company
has engaged in discussions with Integra's counsel in an effort to resolve
Integra's opposition, but no resolution has been reached with respect to the two
trademarks. Discovery is currently underway in the matter. Counsel for the
Company has advised the Company that in such Counsel opinion, the marks are not
confusingly similar. While such counsel can offer no assurances with respect to
the outcome of the opposition proceeding, such counsel believes that it is
unlikely that the Company's trademark application will not be approved.
There are other minor legal proceedings to which the Company is a party. In
the Company's opinion, the claims asserted and the outcome of such proceedings
will not have a material adverse effect on the financial position, results of
operations or the cash flows of the Company.
Insurance --
The Company and its affiliated Medical Practices are insured with respect
to medical malpractice risks on a claims made basis. Management believes it will
be able to obtain renewal coverage in the future. Management is not aware of any
claims against it or its affiliated Medical Practices which would expose the
Company or its affiliated Medical Practices to liabilities in excess of insured
amounts. Therefore, none of these claims is expected to have a material impact
on the Company's financial position, results of operations or cash flows.
NOTE 18 -- RELATED PARTY TRANSACTIONS:
SDL Consultants, a company owned by Sarason D. Liebler, who became a
director of the Company in August, 1994, rendered consulting services to the
Company during 2000, 1999 and 1998 for aggregate fees of approximately $131,000,
$78,000 and $43,000, respectively.
F-23
Pursuant to the Company's Business Services agreement with Shady Grove,
Michael J. Levy, M.D., an employed shareholder physician of the P.C., became a
member of the Company's Board of Directors effective March 12, 1998.
In connection with the Company's January 1998 equity private placement with
Morgan Stanley Venture Partners, M. Fazle Husain, General Partner, became a
member of the Company's Board of Directors.
Pursuant to the Company's Business Services agreement with FCI, Aaron
Lifchez, M.D., an employed shareholder physician of FCI, became a member of the
Company's Board of Directors in August 1997.
NOTE 19 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION AND NON-CASH
TRANSACTIONS:
In 2000, in connection with the Company's termination of it's Kansas City,
MO Reproductive Science Center, the Company charged approximately $273,000 of
fixed assets, primarily comprised of leasehold improvements, to the previously
established reserve. In 1999, in connection with the termination of these
agreements, the Company applied approximately $263,000 of its outstanding
Business Services Rights obligation due to the physician owner to receivables
due from the physician's practice.
In 1999, in connection with the Company's termination of its agreement at
its Dallas, TX Reproductive Science Center, the Company applied approximately
$258,000 of its outstanding Business Services rights obligation to the physician
owner to receivables due from that physician's practice.
In April 1999, the Company entered into a sale-lease back arrangement with
Fleet Bank for $532,000 related to various computer equipment.
In connection with the Company's termination of its agreement with the
Reproductive Sciences Medical Center in San Diego, CA effective September 1,
1998, the Company was discharged from its remaining exclusive Business Services
right obligation of $650,000 which had been incurred in 1997.
In 1996, in connection with the Company's acquisition of certain assets of
and the right to provide Business Services to the Reproductive Sciences Center
of Greater Philadelphia (the "Philadelphia Reproductive Science Center"), the
Company incurred a $1,000,000 obligation. In connection with the Company's
termination of its agreement with the Philadelphia Reproductive Science Center
and due to this Reproductive Science Center's historical operating losses,
approximately $583,000 of the Company's exclusive right obligation to the
physician owner was applied against the Company's receivable from the physician
owner during the six-month period ended June 30, 1998.
In connection with its acquisition of the exclusive right to provide
Business Services to Center for Reproductive Medicine, part of an in-market
merger for FCI in January 1998, the Company issued 46,079 shares of Common Stock
with an aggregate fair market value equal to approximately $300,000.
In connection with its acquisition of the exclusive right to provide
Business Services to the Shady Grove P.C., in March 1998, the Company issued
159,888 shares of Common Stock with an aggregate fair value equal to
approximately $1.2 million and approximately $1.1 million in promissory notes.
In January 1999, the Company recorded an additional aggregate obligation of
approximately $1.6 million in the form of cash, stock and a note to acquire the
balance of the capital stock of Shady Grove. The Company issued 6,467 shares of
Common Stock with an aggregate fair value equal to approximately $175,900 in
settlement of the stock portion of the obligation.
F-24
In 1998, pursuant to amendments to the Bay Area, FCI, Shady Grove and the
Boston agreements, the Company issued warrants to purchase an aggregate of
78,125 shares of Common Stock in exchange for an extension of the term of the
Company's respective Business Services contracts from twenty to twenty-five
years.
State taxes of $21,000, $94,000, and $384,000 were paid in the years ended
December 31, 2000, 1999 and 1998, respectively.
Interest paid in cash during the year ended December 31, 2000, 1999 and
1998, amounted to $415,000, $361,000, and $336,000, respectively. Interest
received during the years ended December 31, 2000, 1999 and 1998 amounted to
approximately $209,000, $153,000, and $90,000, respectively.
NOTE 20 -- SUBSEQUENT EVENTS:
Subsequent to December 31, 2000, entities affiliated with Morgan Stanley
Dean Witter ("Morgan Stanley") exercised options to purchase 60,000 shares of
Company Common Stock at an exercise price of $0.04 per share. In connection with
the Company's Common Stock repurchase program, the Board of Directors authorized
the repurchase of these shares, along with the remainder of Morgan Stanley's
holding of approximately 809,000 shares for a total purchase price of
approximately $2.0 million.
F-25
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors and Shareholders
of IntegraMed America, Inc.:
Our audits of the consolidated financial statements referred to in our report
dated March 6, 2001 appearing in the 2000 Annual Report to Shareholders of
IntegraMed America, Inc. (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the financial statement schedule listed in Item 14(a)(2)
of this Form 10-K. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 6, 2001
S-1
SCHEDULE II
INTEGRAMED AMERICA, INC.
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2000, 1999 and 1998
Additions-
Balance at Charged to Balance at
Beginning Costs and End of
of Period Expenses Deductions (1) Period
---------- ---------- -------------- ----------
Year Ended December 31, 2000
Allowance for
doubtful accounts......................... $851,000 $2,121,000 $1,515,000 $1,457,000
Year Ended December 31, 1999
Allowance for
doubtful accounts......................... $831,000 $1,415,000 $1,395,000 $851,000
Year Ended December 31, 1998
Allowance for
doubtful accounts......................... $394,000 $ 978,000 $ 541,000 $831,000
- ----------------
(1)Uncollectible accounts written off.
S-2
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INTEGRAMED AMERICA, INC.
Dated: March 30, 2001
By /s/JOHN W. HLYWAK, JR.
----------------------
John W. Hlywak, Jr.
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ GERARDO CANET
- ---------------------------
Gerardo Canet President,
Chief Executive Officer
and Director
(Principal Executive Officer) March 30, 2001
/s/ JOHN W. HLYWAK, JR
- ---------------------------
John W. Hlywak, Jr. Senior Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer March 30, 2001
/s/ MICHAEL J. LEVY, M.D.
- ---------------------------
Michael J. Levy, M.D. Director March 30, 2001
/s/ SARASON D. LIEBLER
- ---------------------------
Sarason D. Liebler Director March 30, 2001
/s/ AARON S. LIFCHEZ, M.D.
- ----------------------------
Aaron S. Lifchez, M.D. Director March 30, 2001
/s/ LAWRENCE J. STUESSER
- ---------------------------
Lawrence J. Stuesser Director March 30, 2001
/s/ ELIZABETH E. TALLETT
- ---------------------------
Elizabeth E. Tallett Director March 30, 2001
INDEX TO EXHIBITS
Item 14(c)
Exhibit
Number Exhibit
3.1(a) -- Amended and Restated Certificate of Incorporation of Registrant
effecting, inter alia, reverse stock split (ii)
3.1(b) -- Amendment to Certificate of Incorporation of Registrant increasing
authorized capital stock by authorizing Preferred Stock (ii)
3.1(c) -- Certificate of Designations of Series A Cumulative Convertible
Preferred Stock (ii)
3.1(d) -- Certificate of Amendment to Amended and Restated Certificate of
Incorporation increasing authorized Common Stock to 50,000,000
shares (xxiv)
3.2 -- Copy of By-laws of Registrant (i)
3.2(a) -- Copy of By-laws of Registrant (As Amended and Restated on December
12, 1995. (xi)
3.2(b) -- Copy of By-laws of Registrant (As Amended and Restated on March 4,
1997. (xxi)
4.1 -- Warrant Agreement of Robert Todd Financial Corporation. (i)
4.2 -- Copy of Warrant, as amended, issued to IG Labs. (i)
4.3 -- RAS Securities Corp. and ABD Securities Corporation's Warrant
Agreement. (ii)
4.4 -- Form of Warrants issuable to Raymond James & Associates, Inc.
(vii)
4.6 -- Warrant issued to Morgan Stanley Venture Partners III, L.P.
(xviii)
4.7 -- Warrant issued to Morgan Stanley Venture Partners III, L.P.
(xviii)
4.8 -- Warrant issued to the Morgan Stanley Venture Partners Entrepreneur
Fund, L.P. (xxi)
4.9 (a) -- Warrant issued to Brian Kaplan, M.D. (xxii)
4.9 (b) -- Warrant issued to Aaron S. Lifchez, M.D. (xxii)
4.9 (c) -- Warrant issued to Jacob Moise, M.D. (xxii)
4.9 (d) -- Warrant issued to Jorge Valle, M.D. (xxii)
4.10 (a) -- Warrant issued to Donald Galen, M.D. (xxii)
4.10 (b) -- Warrant issued to Arnold Jacobson, M.D. (xxii)
INDEX TO EXHIBITS (Continued)
Item 14(c)
Exhibit
Number Exhibit
4.10 (c) -- Warrant issued to Louis Weckstein, M.D. (xxii)
4.11 (a) -- Warrant issued to Michael J. Levy, M.D. (xxii)
4.11 (b) -- Warrant issued to Arthur W. Sagoskin, M.D. (xxii)
4.11 (c) -- Warrant issued to Robert J. Stillman, M.D. (xxii)
4.11 (d) -- Warrant issued to Robert J. Stillman, M.D. dated January 6, 1999
(xxvi)
4.12 (a) -- Warrant issued to Patricia M. McShane, M.D. dated November 18,
1998 (xxvi)
4.12 (b) -- Warrant issued to Samuel C. Pang, M.D. dated November 18, 1998
(xxvi)
4.12 (c) -- Warrant issued to Issac Glatstein, M.D. dated November 18, 1998
(xxvi)
4.13 -- Warrant issued to Vector Securities International, Inc. (xxvi)
10.1 -- Copy of Registrant's 1988 Stock Option Plan, including form of
option (i)
10.2 -- Copy of Registrant's 1992 Stock Option Plan, including form of
option (i)
10.2 (a) -- Copy of Amendment to Registrant's 1992 Stock Option Plan (xxii)
10.4 -- Severance arrangement between Registrant and Vicki L. Baldwin (i)
10.4(a) -- Copy of Change in Control Severance Agreement between Registrant
and Vicki L. Baldwin (vii)
10.5(a) -- Copy of Severance Agreement with Release between Registrant and
David J. Beames (iv)
10.6 -- Severance arrangement between Registrant and Donald S. Wood (i)
10.6(a) -- Copy of Executive Retention Agreement between Registrant and
Donald S. Wood, Ph.D. (viii)
10.7(a) -- Copy of lease for Registrant's executive offices relocated to
Purchase, New York (viii)
10.8 -- Copy of Lease Agreement for medical office in Mineola, New York
(i)
10.8(a) -- Copy of new 1994 Lease Agreement for medical office in Mineola,
New York (v)
10.8(b) -- Copy of Letter of Credit in favor of Mineola Pavilion Associates,
Inc. (viii)
10.9 -- Copy of Service Agreement for ambulatory surgery center in
Mineola, New York (i)
10.10 -- Copy of Agreement with MPD Medical Associates, P.C. for Center in
Mineola, New York (i)
10.10 -- Copy of Agreement with MPD Medical Associates, P.C. for Center in
Mineola, New York dated September 1, 1994 (vii)
10.10(a) -- Copy of Agreement with MPD Medical Associates, P.C. for Center in
Mineola, New York dated September 1, 1994 (vii)
10.11 -- Copy of Service Agreement with United Hospital (i)
10.12 -- Copy of Service Agreement with Waltham Weston Hospital and Medical
Center (i)
10.15(a) -- Copy of post-Dissolution Consulting Agreement between Registrant
and Allegheny General Hospital (vi)
10.18(a) -- Copy of post-Dissolution Consulting, Training and License
Agreement between Registrant and Henry Ford Health Care Systems
(iii)
10.19 -- Copy of Guarantee Agreement with Henry Ford Health System (i)
10.20 -- Copy of Service Agreement with Saint Barnabas Outpatient Centers
for center in Livingston, New Jersey (i)
10.21 -- Copy of Agreement with MPD Medical Associates, P.C. for center in
Livingston, New Jersey (i)
10.22 -- Copy of Lease Agreement for medical offices in Livingston, New
Jersey (i)
10.23 -- Form of Development Agreement between Registrant and IG
Laboratories, Inc. (i)
10.24 -- Copy of Research Agreement between Registrant and Monash
University (i)
10.24(a) -- Copy of Research Agreement between Registrant and Monash
University (ix)
10.28 -- Copy of Agreement with Massachusetts General Hospital to establish
the Vincent Center for Reproductive Biology and a Technical
Training Center (ii)
10.29 -- Copy of Agreement with General Electric Company relating to
Registrant's training program (ii)
10.30 -- Copy of Indemnification Agreement between Registrant and Philippe
L. Sommer (vii)
10.31 -- Copy of Employment Agreement between Registrant and Gerardo Canet
(vii)
10.31(a) -- Copy of Change in Control Severance Agreement between Registrant
and Gerardo Canet (vii)
10.31(b) -- Copy of the Amendment of Change in Control Severance Agreement
between Registrant and Gerardo Canet (viii)
10.33 -- Copy of Change in Control Severance Agreement between Registrant
and Dwight P. Ryan (vii)
10.35 -- Revised Form of Dealer Manager Agreement between Registrant and
Raymond James & Associates, Inc. (vii)
10.36 -- Copy of Agreement between MPD Medical Associates, P.C. and
Patricia Hughes, M.D. (vii)
10.37 -- Copy of Agreement between IVF America (NJ) and Patricia Hughes,
M.D. (vii)
10.38 -- Copy of Management Agreement between Patricia M. McShane, M.D. and
IVF America (MA), Inc. (vii)
10.39 -- Copy of Sublease Agreement for medical office in North Tarrytown,
New York (viii)
10.40 -- Copy of Executive Retention Agreement between Registrant and
Patricia M. McShane, M.D. (viii)
10.41 -- Copy of Executive Retention Agreement between Registrant and Lois
Dugan (viii)
10.42 -- Copy of Executive Retention Agreement between Registrant and Jay
Higham (viii)
10.43 -- Copy of Service Agreement between Registrant and Saint Barnabas
Medical Center (ix)
10.43 (a) Form of Termination Agreement between IntegraMed America, Inc. and
Saint Barnabas Medical Center dated December 7, 2000.
10.44 -- Asset Purchase Agreement among Registrant, Assisted Reproductive
Technologies, P.C. d/b/a Main Line Reproductive Science Center,
Reproductive Diagnostics, Inc. and Abraham K. Munabi, M.D. (ix)
10.44(a) -- Management Agreement among Registrant and Assisted Reproductive
Technologies, P.C. d/b/a Main Line Reproductive Science Center and
Reproductive Diagnostics, Inc. (ix)
10.44(b) -- Physician Service Agreement between Assisted Reproductive
Technologies P.C. d/b/a Main Line Reproductive Science Center and
Abraham K. Munabi, M.D. (ix)
10.44(c) -- Stipulation of Settlement and Compromise of all Claims Among
IntegraMed America, Inc. and Assisted Reproductive Technologies,
P.C., d/b/a Mainline Reproductive Science Center, Reproductive
Diagnostics, Abraham Munabi, M.D., Reproductive Science Center of
Suburban Philadelphia (xxv)
10.45 -- Copy of Executive Retention Agreement between Registrant and
Stephen Comess (x)
10.46 -- Copy of Executive Retention Agreement between Registrant and Peter
Callan (x)
10.47 -- Management Agreement between Registrant and Robert Howe, M.D.,
P.C. (x)
10.47 (a)-- P.C. Funding Agreement between Registrant and Robert Howe, M.D.
(x)
10.48 -- Management Agreement among Registrant and Reproductive Endocrine &
Fertility Consultants, P.A. and Midwest Fertility Foundations &
Laboratory, Inc. (x)
10.48 (a)-- Asset Purchase Agreement among Registrant and Reproductive
Endocrine & Fertility Consultants, Inc. and Midwest Fertility
Foundations & Laboratory, Inc. (x)
10.48 (b)-- Amendment No. 2 to Management Agreement among IntegraMed America,
Inc. and Reproductive Endocrine & Fertility Consultants, P.A. and
Midwest Fertility Foundations & Laboratory, Inc. dated July 1,
1998 (xxiv)
10.48 (c)-- Management Agreement among IntegraMed America, Inc. and
Reproductive Endocrine & Fertility Consultants, P.A. and Midwest
Fertility Foundations & Laboratory, Inc. (xxvii)
10.49 -- Copy of Sublease Agreement for office space in Kansas City,
Missouri (x)
10.50 -- Copy of Lease Agreement for office space in Charlotte, North
Carolina (x)
10.51 -- Copy of Contract Number DADA15-96-C-0009 as awarded to IVF America
by the Department of the Army, Walter Reed Army Medical Center for
In Vitro Fertilization Laboratory Services (xi)
10.52 -- Agreement and Plan of Merger By and Among IVF America, Inc., INMD
Acquisition Corp., The Climacteric Clinic, Inc., Midlife Centers
of America, Inc., Women's Research Centers, Inc., America National
Menopause Foundation, Inc. and Morris Notelovitz (xii)
10.52 (a)-- Agreement dated September 1, 1998 By and Among Women's Medical &
Diagnostic Center, Inc., IntegraMed America, Inc. and Florida
Medical and Research Institute, P.A. (xxv)
10.53 -- Employment Agreement between Morris Notelovitz, M.D., Ph.D. and
IVF America, Inc., d/b/a IntegraMed America (xii)
10.54 -- Physician Employment Agreement between Morris Notelovitz, M.D.,
Ph.D., and INMD Acquisition Corp. ("IAC"), a Florida corporation
and wholly owned subsidiary of IVF America, Inc. ("INMD") (xii)
10.55 -- Management Agreement between IVF America, Inc., d/b/a IntegraMed
America, Inc. and W.F. Howard, M.D., P.A. (xii)
10.56 -- Asset Purchase Agreement between IVF America, Inc., d/b/a/
IntegraMed America, Inc. and W.F. Howard M.D., P.A. (xii)
10.57 -- Business Purposes Promissory Note dated September 8, 1993 in the
amount of $100,000 (xiii)
10.58 -- Business Purposes Promissory Note dated November 18, 1994 in the
amount of $64,000 (xiii)
10.59 -- Guaranty Agreement (xiii)
10.60 -- Security Agreement (Equipment and Consumer Goods) (xiii)
10.61 -- Management Agreement dated January 7, 1997 by and between the
Registrant and Bay Area Fertility and Gynecology Medical Group,
Inc. (xiv)
10.61 (a)-- Amendment No. 1 to Management Agreement between IntegraMed
America, Inc. and Bay Area Fertility and Gynecology Medical Group,
Inc. (xxii)
10.61 (b)-- Amendment No. 2 to Management Agreement between IntegraMed
America, Inc. and Bay Area Fertility and Gynecology Medical Group,
Inc. (xxvii)
10.61 (c) Amendment No. 3 to Management Agreement between IntegraMed
America, Inc. and Bay Area Fertility and Gynecology Medical Group,
Inc. dated April 1, 2000 (xxxi)
10.62 -- Asset Purchase Agreement dated January 7, 1997 by and between the
Registrant and Bay Area Fertility and Gynecology Medical Group, a
California Partnership. (xiv)
10.63 -- Physician Employment Agreement between Robin E. Markle, M.D. and
Women's Medical & Diagnostic Center, Inc. (xv)
10.64 -- Physician Employment Agreement between W. Banks Hinshaw, Jr., M.D.
and Women's Medical & Diagnostic Center, Inc. (xv)
10.65 -- Agreement between IntegraMed America, Inc., f/k/a IVF America
Inc.; Women's Medical & Diagnostic Center, Inc., f/k/a INMD
Acquisition Corp, and Morris Notelovitz, M.D. (xv)
10.66 -- Personal Responsibility Agreement between IntegraMed America,
Inc., Bay Area Fertility and Gynecology Medical Group, Inc. and
Donald I. Galen, M.D. (xv)
10.67 -- Personal Responsibility Agreement between IntegraMed America,
Inc., Bay Area Fertility and Gynecology Medical Group, Inc. and
Louis N. Weckstein, M.D. (xv)
10.68 -- Personal Responsibility Agreement between IntegraMed America,
Inc., Bay Area Fertility and Gynecology Medical Group, Inc. and
Arnold Jacobson, M.D. (xv)
10.69 -- Copy of Executive Retention Agreement between Registrant and Glenn
G. Watkins (xv)
10.70 -- Management Agreement between Registrant and Fertility Centers of
Illinois, S.C. dated February 28, 1997 (xvi)
10.71 -- Asset Purchase Agreement between Registrant and Fertility Centers
of Illinois, S.C. dated February 28, 1997 (xvi)
10.72 -- Physician-Shareholder Employment Agreement between Fertility
Centers of Illinois, S.C. and Aaron S. Lifchez, M.D. dated
February 28, 1997 (xvi)
10.73 -- Physician-Shareholder Employment Agreement between Fertility
Centers of Illinois, S.C. and Brian Kaplan, M.D. dated February
28, 1997 (xvi)
10.74 -- Physician-Shareholder Employment Agreement between Fertility
Centers of Illinois S.C. and Jacob Moise, M.D. dated February 28,
1997 (xvi)
10.75 -- Physician-Shareholder Employment Agreement between Fertility
Centers of Illinois, S.C. and Jorge Valle, M.D. dated February 28,
1997 (xvi)
10.76 -- Personal Responsibility Agreement among Registrant, Fertility
Centers of Illinois, S.C. and Aaron S. Lifchez, M.D. dated
February 28, 1997 (xvi)
10.77 -- Personal Responsibility Agreement among Registrant, Fertility
Centers of Illinois, S.C. and Jacob Moise, M.D. dated February 28,
1997 (xvi)
10.78 -- Personal Responsibility Agreement among Registrant, Fertility
Centers of Illinois, S.C. and Brian Kaplan, M.D. dated February
28, 1997 (xvi)
10.79 -- Personal Responsibility Agreement among Registrant, Fertility
Centers of Illinois, S.C. and Jorge Valle, M.D. dated February 28,
1997 (xvi)
10.80 -- Amendment to Contract Number DADA15-96-C-009 between Registrant
and the Department of the Army, Walter Reed Army Medical Center
for In Vitro Fertilization Laboratory Services dated February 11,
1997 (xvi)
10.80 (a)-- Amendment Effective January 29, 1998 to Contract Number DADA
15-96-C-009 between INMD and the Department of the Army, Walter
Reed Army Medical Center for In Vitro Fertilization Laboratory
Services (xxii)
10.81 -- Management Agreement between Registrant and Reproductive Sciences
Medical Center, Inc. (xvii)
10.81 (a)-- Amendment Dated July 11, 1997 to Agreement with Reproductive
Sciences Medical Center, Inc. (xxiv)
10.81 (b)-- Stipulation of Settlement and Compromise of all Claims Among
IntegraMed America, Inc. and Reproductive Sciences Medical Center,
Inc. and Samuel H. Wood, M.D. (xxv)
10.82 -- Asset Purchase Agreement between Registrant and Samuel H. Wood,
M.D., Ph.D. (xvii)
10.83 -- Personal Responsibility Agreement between Registrant and Samual H.
Wood, M.D., Ph.D. (xvii)
10.84 -- Physician-Shareholder Employment Agreement between Reproductive
Sciences Medical Center, Inc. and Samuel H. Wood, M.D., Ph.D.
(xvii)
10.85 -- Physician-Shareholder Employment Agreement between Reproductive
Endocrine & Fertility Consultants, P.A. and Elwyn M. Grimes, M.D.
(xvii)
10.86 -- Amendment to Management Agreement between Registrant and
Reproductive Endocrine & Fertility Consultants, P.A. (xvii)
10.87 -- Amendment to Management Agreement between Registrant and Fertility
Centers of Illinois, S.C. dated May 2, 1997 (xvii)
10.88 -- Management Agreement between Registrant and MPD Medical
Associates, P.C. dated June 2, 1997 (xvii)
10.88 (a)-- Amendment to Management Agreement between IntegraMed America, Inc.
and MPD Medical Associates, P.C. dated as of January 1, 1998
(xxiv)
10.88 (b)-- Management Agreement between IntegraMed America, Inc. and MPD
Medical Associates, P.C. dated July 1, 1999 (xxix)
10.88 (c) Amendment No. 1 dated as of October 1, 2000 to the Management
Agreement dated as of July 1, 1999 by and between IntegraMed
America, Inc. and MPD Medical Associates, P.C. (xxxii)10.89 --
Physician-Shareholder Employment Agreement between MPD Medical
Associates P.C. and Gabriel San Roman, M.D. (xvii)
10.90 -- Amendment No. 2 to Management Agreement between Registrant and
Fertility Centers of Illinois, S.C. dated June 18, 1997 (xvii)
10.91 -- Commitment Letter dated June 30, 1997 between Registrant and First
Union National Bank (xvii)
10.92 -- Amendment No. 3 to Management Agreement between Registrant and
Fertility Centers of Illinois, S.C. dated August 19, 1997 (xviii)
10.93 -- Amendment No. 4 to Management Agreement between Registrant and
Fertility Centers of Illinois, S.C. dated January 9, 1998 (xx)
10.94 -- Investment Agreement between Registrant and Morgan Stanley Venture
Partners III, L.P.., Morgan Stanley Venture Investors III, L.P.
and the Morgan Stanley Venture Partners Entrepreneur Fund, L.P.
(xix)
10.95 -- Amendment No. 5 to Management Agreement between Registrant and
Fertility Centers of Illinois, S.C. dated March 5, 1998 (xxi).
10.95 (a)-- Amendment No. 6 to Management Agreement between IntegraMed
America, Inc. and Fertility Centers of Illinois, S.C. dated July
1, 1999 (xxiii)
10.95 (b) Amendment No. 7 to Management Agreement between IntegraMed
America, Inc. and Fertility Centers of Illinois, P.C. dated April
1, 2000. (xxxi)
10.96 -- Termination Agreement by and among Women's Medical & Diagnostic
Center, Inc., W. Banks Hinshaw, Jr., Ph.D., M.D., and Robin E.
Markle, M.D.
10.97 -- Loan Agreement between First Union National Bank and IntegraMed
America, Inc. dated November 13, 1997.
10.98 -- Management Agreement between IntegraMed America, Inc. and MPD
Medical Associates (MA), P.C. dated October 1, 1997 (xxi)
10.98 (a)-- Amendment No. 1 to Management Agreement between IntegraMed
America, Inc. and MPD Medical Associates (MA) P.C. and Patricia M.
McShane, M.D. dated November 11, 1998 (xxvi)
10.99 -- Physician-Shareholder Employment Agreement between MPD Medical
Associates (MA), P.C. and Patricia McShane, M.D. dated October 1,
1997 (xxi)
10.100 -- Asset Purchase and Sale Agreement by and among IntegraMed America,
Inc. and Fertility Centers of Illinois, S.C., Advocate Medical
Group, S.C. and Advocate MSO, Inc. dated January 9, 1998 (xxi)
10.101 -- Physician Employment Agreement between Fertility Centers of
Illinois, S.C. and Laurence A. Jacobs, M.D. dated January 9, 1998
(xxi)
10.102 -- Physician Employment Agreement between Fertility Centers of
Illinois, S.C. and John J. Rapisarda, M.D. dated January 9, 1998
(xxi)
10.103 -- Personal Responsibility Agreement entered into by and among
IntegraMed America, Inc., Fertility Centers of Illinois, S.C. and
John J. Rapisarda, M.D. dated January 9, 1998 (xxi)
10.104 -- Personal Responsibility Agreement entered into by and among
IntegraMed America, Inc., Fertility Centers of Illinois, S.C. and
Laurence A. Jacobs, M.D. dated January 9, 1998 (xxi)
10.105 -- Management Agreement between Shady Grove Fertility Centers, P.C.
and Levy, Sagoskin and Stillman, M.D., P.C. dated March 11, 1998
(xxi)10.105 (a) -- Amendment No. 1 to Management Agreement between
Shady Grove Fertility Centers, Inc. and Levy Sagoskin and
Stillman, M.D., P.C (xxii)
10.105 (b)-- Amendment No. 2 to Management Agreement between Shady Grove
Fertility Centers, Inc. and Levy Sagoskin and Stillman, M.D., P.C.
dated May 6, 1998 (xxvi)
10.105 (c)-- Amendment No. 3 to the Management Agreement between IntegraMed
America, Inc. and Shady Grove Reproductive Science Center, P.C.
dated September 1, 1999 (xxix)
10.105 (d)-- Amendment No. 4 to Management Agreement between IntegraMed
America, Inc. and Shady Grove Reproductive Science Center, P.C.
dated April 1, 2000. (xxxi)
10.106 -- Submanagement Agreement between Shady Grove Fertility Centers,
Inc. and IntegraMed America, Inc. dated March 12, 1998 (xxi)
10.107 -- Stock Purchase and Sale Agreement among IntegraMed America, Inc.
and Michael J. Levy, M.D., Robert J. Stillman, M.D. and Arthur W.
Sagoskin, M.D. dated March 12, 1998 (xxi)
10.108 -- Personal Responsibility Agreement by and among IntegraMed America,
Inc. and Arthur W. Sagoskin, M.D. dated March 12, 1998 (xxi)
10.109 -- Personal Responsibility Agreement by and among IntegraMed America,
Inc. and Michael J. Levy, M.D. dated March 12, 1998 (xxi)
10.110 -- Physician-Stockholder Employment Agreement between Levy, Sagoskin
and Stillman, M.D., P.C. and Michael J. Levy, M.D. dated March 11,
1998 (xxi)
10.111 -- Physician-Stockholder Employment Agreement between Levy, Sagoskin
and Stillman, M.D., P.C. and Arthur W. Sagoskin, M.D. dated March
11, 1998 (xxi)
10.112 -- Physician-Stockholder Employment Agreement between Levy, Sagoskin
and Stillman, M.D., P.C. and Robert J. Stillman, M.D. dated March
11, 1998 (xxi)
10.113 -- Commitment letter with Fleet Bank, National Association (xxiv)
10.113 (a) -- Loan Agreement dated September 11, 1998 between IntegraMed
America, Inc. and Fleet Bank, National Association (xxv)
10.113 (b) -- Master Lease Agreement between Fleet Capital Corporation and
IntegraMed America, Inc. (xxix)
10.113 (c) -- Amendment Number One to Loan Agreement dated September 11, 1998
between IntegraMed America, Inc. and Fleet Bank, National
Association. (xxx)
10.113 (d) -- Amendment Number Two to Loan Agreement dated September 11, 1998
between IntegraMed America, Inc. and Fleet Bank, National
Association. (xxx)
10.113 (e) -- Amendment Number Three to Loan Agreement dated September 11, 1998
between IntegraMed America, Inc. and Fleet Bank, National
Association.
10.113 (f) -- Amendment Number Four to Loan Agreement dated September 11, 1998
between IntegraMed America, Inc. and Fleet Bank, National
Association.
10.114 -- Management Agreement Among IntegraMed Pharmaceutical Services,
Inc., IVP Pharmaceutical Care, Inc., and IntegraMed America, Inc.
(xxvii)
10.115 -- Management Agreement between IntegraMed America, Inc. and David R.
Corley, M.D., P.C. dated July 1, 1999 (xxviii)
10115 (a) -- Personal Responsibility Agreement among Registrant and David R.
Corley, M.D. (xxviii)
10.116 -- Form of Retention Agreement between Registrant and Kathi Baginski,
Peter Cucchiara, Dan Desmarais, Anders Engen, Jay Higham, John
Hlywak, Jr., Mark Segal, Claude E. White, and Donald S. Wood,
Ph.D. (xxviii)
10.117 Form of Indemnification Agreement dated June 1, 2000 between
IntegraMed America, Inc. and M. Fazle Husain, Michale Levy, M.D.,
Aaron Lifchez, M.D., Sarason Liebler, Larry Stuesser, Elizabeth E.
Tallett, Gerardo Canet, Peter Cucchiara, Jay Higham, John Hlywak,
Jr., Claude E. White, and Donald S. Wood, Ph.D. (xxxi)
21 -- List of Subsidiaries
23.1 -- Consent of PricewaterhouseCoopers LLP (xxx)
27 -- Financial Data Schedule
99.1 Registrant's Press Release dated November 1, 2000. (xxxiii)
99.2 Registrant's Press Release dated December 13, 2000 (xxxiv)
99.3 Registrant's Press Release dated January 26, 2001. (xxxv)
(i) Filed as Exhibit with identical exhibit number to Registrant's
Statement on Form S-1 (Registration No. 33-47046) and incorporated
herein by reference thereto.
(ii) Filed as Exhibit with identical exhibit number to Registrant's
Statement on Form S-1 (Registration No. 33-60038) and incorporated
herein by reference thereto.
(iii) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended March 31, 1994 and
incorporated herein by reference thereto.
(iv) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30, 1994 and
incorporated herein by reference thereto.
(v) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended September 30, 1994
and incorporated herein by reference thereto.
(vi) Filed as Exhibit with identical exhibit number to Registrant's
Statement on Form 10-K for the year ended December 31, 1993.
(vii) Filed as Exhibit with identical exhibit number to Registrant's
Statement on Form S-4 (Registration No. 33-82038) and incorporated
herein by reference thereto.
(viii) Filed as Exhibit with identical exhibit number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
(ix) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended June 30, 1995.
(x) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the year ended September 30, 1995.
(xi) Filed as Exhibit with identical number to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1995.
(xii) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated June 20, 1996.
(xiii) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K/A dated August 20, 1996.
(xiv) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated January 20, 1997.
(xv) Filed as Exhibit with identical exhibit number to Annual Report on
Form 10-K for the year ended December 31, 1996.
(xvi) Incorporated by Reference to the Exhibit with the identical exhibit
number to Registrant's Registration Statement on Form S-1
(registration No. 333-26551) filed with the Securities and Exchange
Commission on May 6, 1997.
(xvii) Incorporated by reference to the Exhibit with the identical exhibit
number to Registrant's Registration Statement on Form S-1
(Registration No. 333-26551) filed with the Securities and Exchange
Commission on June 20, 1997.
(xviii) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended September 30, 1997
and incorporated herein by reference thereto.
(xix) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated January 23, 1998.
(xx) Filed as Exhibit with identical exhibit number to Schedule 13D dated
February 11, 1998.
(xxi) Filed as Exhibit with identical exhibit number to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997.
(xxii) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended March 31, 1998.
(xxiii) Incorporated by reference to the Registrant's Definitive Proxy
Statement filed on May 5, 1997.
(xxiv) Filed as Exhibit with identical number to Registrant's Quarterly
Report on form 10-Q for the period ended June 30, 1998.
(xxv) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended September 30, 1998.
(xxvi) Filed as Exhibit with identical number to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1998.
(xxvii) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended March 31, 1999.
(xxviii) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended June 30, 1999.
(xxix) Filed as Exhibit with identical number to Registrant's Quarterly
Report on Form 10-Q for the period ended September 30, 1999.
(xxx) Filed as Exhibit with identical number to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1999.
(xxxi) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30, 2000.
(xxxii) Filed as Exhibit with identical exhibit number to Registrant's
Quarterly Report on Form 10-Q for the period ended September 30,
2000.
(xxxiii) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated November 1, 2000.
(xxxiv) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated December 13, 2000.
(xxxv) Filed as Exhibit with identical exhibit number to Registrant's Report
on Form 8-K dated January 26, 2001.