<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
-------- -------
COMMISSION FILE NUMBER 000-21505
INTENSIVA HEALTHCARE CORPORATION
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 43-1690769
--------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7733 FORSYTH BLVD., 11TH FLOOR, ST. LOUIS, MISSOURI 63105
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(314) 725-0112
------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filled 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 [ ] No [X]
The number of shares outstanding of the registrant's Common Stock, par value
$0.001 per share, at November 8, 1996, was 9,905,062 shares.
Page 1
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See pages F-1 to F-5 hereof.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Intensiva HealthCare Corporation ("Intensiva" or the "Company") provides
highly specialized, acute long-term care for critically ill or injured patients
who require intensive medical monitoring and treatment, and who often have
multiple medical conditions and are medically unstable. The Company provides
high quality, cost effective, specialized care for its patients, who typically
require an average length of stay of greater than 25 days in an intensive
inpatient setting. Intensiva's medical staffs provide specialized medical
services, as well as nursing and respiratory care, and the Company is
developing disease-specific pathways to treat pulmonary, cancer, renal and
cardiac conditions, among others. The Company's clinical programs utilize
specialized staff, equipment and protocols for the treatment of its patients.
Intensiva leases underutilized space from general acute care hospitals
("Host Hospitals") in underserved secondary markets, creating a separate
"hospital within a hospital." By leasing space from the Host Hospital,
Intensiva is able to minimize capital and overhead costs including owning and
operating the physical plant and expensive medical and diagnostic equipment.
The Company is able to purchase certain services from its Host Hospitals, such
as laboratory and radiology (MRI, CAT Scan, X-Ray), as well as hotel services
such as laundry, housekeeping, dietary and property management. The Company's
business model provides for each of its specialized hospitals to become
certified by Medicare as a "long-term care hospital" and exempt from PPS after
approximately seven months of operations, and receive cost-based reimbursement,
which the Company believes is more appropriate given the medical condition of
its patients. In addition, the Company's business model seeks to maintain the
anticipated payor mix which includes both non-governmental and governmental
payors. The Company is reimbursed by non-governmental payors on per diem, per
discharge or other capitated forms of payment and fee for service arrangements
or negotiated charges.
Operations begin approximately four months after an agreement is executed
with a Host Hospital. During the qualification period, the Company spends
approximately one million dollars on renovation costs, equipment purchases,
pre-opening costs and working capital before the facility becomes eligible for
certification as a long-term care hospital. Patient volumes are lower during
the non-exempt phase while physicians, case managers, and payors are educated
as to the benefits of the Company's clinical services.
Page 2
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 3
During 1995, the Company's first certified long-term care hospital
generated net revenues of $690,000 and had an operating loss of $13,000 in its
first two months of PPS-exempt operations. In contrast, the Company generated
net revenues of $800,000 and operating losses (exclusive of general and
administrative expenses) of $1.2 million from all other facilities during
fiscal 1995.
During the first nine months of 1996 two additional hospitals obtained
Medicare certification as long-term care hospitals. The three Medicare
certified long-term care hospitals generated net revenue of $9.4 million and an
operating margin (exclusive of general and administrative expense) of
$560,000, or 6.0%, during the nine months ended September 30, 1996. In
contrast, all other clinical operations generated net revenue of $1.3 million
and had operating losses (exclusive of general and administrative expenses) of
$2.0 million during the same period. The Company anticipates that it will
continue to realize operating losses for at least the first seven months of
operations at each location.
The Company currently operates seven facilities in four states. In
addition, the Company has three other facilities under development, all of
which the Company anticipates will begin operations in 1996. The Company has
also entered into a letter of intent to open an additional clinical program.
The Company has generated historical operating losses as a result of its rapid
growth and anticipates that it will continue to incur such losses through at
least the second quarter of 1997.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, the percentages
of net revenues represented by certain items reflected in the Company's
statements of operations:
<TABLE>
<CAPTION>
Three Three Nine Nine
Year Months Months Months Months
Ended Ended Ended Ended Ended
Dec. 31, Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1995 1996 1995 1996
-------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues 100.0% 100.0% 100.0% 100.0% 100.0%
Expenses:
Operating expenses 169.4 180.2 109.5 246.5 106.3
Corporate general and
administrative expenses 126.6 93.5 16.3 186.6 19.4
Provision for bad debts 9.4 8.7 1.9 11.2 2.2
Depreciation and amortization 1.9 0.4 7.1 2.6 5.4
------- -------- -------- -------- -------
Total expenses 307.3 282.8 134.8 446.9 133.3
------- -------- -------- -------- -------
Operating loss (207.3) (182.8) (34.8) (346.9) (33.3)
Interest income, net 16.0 14.4 0.6 31.0 2.1
------- -------- -------- -------- -------
Net loss (191.3)% (168.4)% (34.2)% (315.9)% (31.2)%
======= ======== ======== ======== =======
</TABLE>
Page 3
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 4
As indicated in the above table, operating expenses, corporate general and
administrative expenses, and the provision for bad debts as a percentage of
operating revenues have declined over time as the Company has developed
additional facilities and increased net revenues.
SOURCES OF REVENUES
The Company receives payment for health care services primarily from
non-governmental payors such as managed care organizations (e.g. preferred
provider and health maintenance organizations) and other commercial health
insurance carriers (e.g. traditional indemnity insurance plans), and the
federal government and state governments under the Medicare, Medicaid and other
governmental programs. Consistent with initiatives to control health care
costs, the Company generally negotiates payments with non-governmental payors
based upon the type and extent of services to be provided to individual
patients. As of September 30, 1996, the Company had approximately fifteen
managed care contracts to provide services to participating members. These
managed care agreements consist primarily of negotiated discounts from
established charges, although a small percentage of patients are treated under
per diem contracts. The following table sets forth the approximate percentages
of the Company's net patient service revenues derived from the specified payor
sources indicated:
<TABLE>
<CAPTION>
Year Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended Ended
Dec. 31, Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1995 1996 1995 1996
-------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Medicare ...................... 44.4% 63.8% 70.5% 48.7% 69.3%
Medicaid ...................... 2.3 -- 0.1 -- 1.3
Indemnity and other insurance
providers ................. 42.1 25.1 14.8 41.5 16.4
HMO ........................... 2.5 3.1 2.0 2.3 2.4
PPO ........................... 2.7 6.5 11.3 6.4 7.9
Other negotiated arrangements 6.0 1.5 1.3 1.1 2.7
------ ------ ------ ------ -------
100.0% 100.0% 100.0% 100.0% 100.0%
====== ====== ====== ====== =======
</TABLE>
The increase in Medicare net revenues as a percentage of total net
revenues is primarily attributable to the addition of new facilities in the
early stages of operation. The Company historically experienced a trend toward
higher percentages of Medicare patients in the early months of operation. The
decrease in indemnity and other insurance net revenues as a percentage of total
net revenues corresponds to the net increase in Medicare revenues as noted
above.
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Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 5
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Net Revenues. Net revenues for the nine months ended September 30, 1996
were $10.7 million compared to $600,000 for the comparable period in 1995.
Approximately $5.9 million of this revenue growth is attributed to new
facilities, and the remaining $4.2 million was generated by the Company's
Oklahoma City, Oklahoma facility. The Company opened its first location in
Oklahoma City in March 1995 and had seven operational sites at September 30,
1996. Prior to March 1995 the Company was a development stage company.
Operating Expenses. Operating expenses for the nine months ended
September 30, 1996 increased $9.9 million from the comparable period in 1995.
Approximately $7.8 million of this increase is attributable to new facilities,
while the remaining $2.1 million was generated by the Company's Oklahoma City
facility. As a percentage of net revenues, operating expenses decreased from
247% to 106%. The Company expects this percentage to continue to decline as
its facilities mature.
General and Administrative. General and administrative expenses for the
nine months ended September 30, 1996 increased $900,000, or 79%, to $2.1
million from the comparable period in 1995. The increase in expenses was
partially attributable to salaries, related payroll taxes, and employee
benefits relating to additional personnel retained to support the Company's
growth strategy. As a percentage of net revenues, general and administrative
expenses decreased from 187% to 19%. The Company expects that its general and
administrative expenses will continue to decrease as a percentage of net
revenues as the Company grows and achieves certain economies of scale.
Depreciation and Amortization. Depreciation and amortization for the nine
months ended September 30, 1996 increased $560,000 to $580,000 from the
comparable period in 1995. The increase relates to the acquisition of
additional property and equipment and the amortization of a computer software
license, and organizational and pre-opening costs associated with the seven
open hospitals at September 30, 1996. Property and equipment increased from
$200,000 at September 30, 1995 to $3.0 million at September 30, 1996. A
computer software license was obtained in December 1995 for $500,000 and is
being amortized over the three-year license period. Organizational and
preopening costs increased from $28,000 at September 30, 1995 to $150,000 at
September 30, 1996.
Income Taxes. The Company has paid minimal income taxes to date and has
approximately $2.5 million of net operating loss carryforwards for income tax
purposes, which, subject to limitations on use, if unused, will begin to expire
in the year 2009.
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
Net Revenues. Net revenues for the three months ended September 30, 1996
were $4.7 million compared to $500,000 for the comparable period in 1995.
Approximately $3.1 million of this revenue growth is attributed to new
facilities, and the remaining $1.1 million was generated by the
Page 5
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 6
Company's Oklahoma City facility, the only facility open at September 30, 1995.
Approximately $3.7 million of the $4.7 million in net revenues for the three
months ended September 30, 1996, was generated by the Company's three Medicare
certified long-term care hospitals.
Operating Expenses. Operating expenses for the three months ended
September 30, 1996 increased $4.3 million from the comparable period in 1995.
Approximately $3.9 million of this increase is attributable to new facilities,
while the remaining $400,000 was generated by the Company's Oklahoma City
facility. As a percentage of net revenues, operating expenses decreased from
180% to 110%. The Company expects this percentage to continue to decline as
its facilities mature.
General and Administrative. General and administrative expenses for the
three months ended September 30, 1996 increased $330,000, or 77%, to $760,000
from the comparable period in 1995. The increase in expenses was partially
attributable to salaries, related payroll taxes and employee benefits relating
to additional personnel retained to support the Company's growth strategy. As
a percentage of net revenues, general and administrative expenses deceased from
94% to 16%. The Company expects that its general and administrative expenses
will continue to decrease as a percentage of net revenues as the Company grows
and achieves certain economies of scale.
Depreciation and Amortization. Depreciation and amortization for the
three months ended September 30, 1996 increased $330,000 from the comparable
period in 1995. The increase relates to the acquisition of additional property
and equipment and the amortization of a computer software license, and
organizational and pre-opening costs associated with the seven open hospitals
at September 30, 1996.
SELECTED QUARTERLY FINANCIAL RESULTS
The Company's quarterly financial position and results of operations have
fluctuated due to its emerging from the development stage status in March 1995,
obtaining PPS-exempt status for its first facility in November 1995, the
opening of additional facilities in December 1995, January 1996, February 1996,
April 1996, June 1996 and July 1996, and obtaining PPS-exempt status for two
additional facilities in August and September 1996. The following table
presents unaudited quarterly operating results for each of the seven quarters
in the period from January 1, 1995 through September 30, 1996. The Company
believes that all necessary adjustments have been included in the amounts
stated below to present fairly the following selected quarterly information
when read in conjunction with the financial statements included elsewhere in
this Form 10-Q.
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Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 7
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------------
STATEMENT OF March 31, June 30, September 30, December 31, March 31, June 30, September 30,
OPERATIONS DATA: 1995 1995 1995 1995 1996 1996 1996
--------- -------- ------------- ------------ --------- -------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues $ --- $ 165 $ 459 $ 864 $2,509 $ 3,567 $ 4,663
Operating loss (572) (756) (839) (919) (834) (1,118) (1,623)
Net loss (504) (696) (772) (875) (729) (1,021) (1,597)
</TABLE>
The Company anticipates relocating its Oklahoma City operations to a new
location during the fourth quarter of 1996. The new Host Hospital is a member
of the same health care system as the Company's current Host Hospital. This
relocation could have a material adverse effect on the 1996 fourth quarter
results of operations, due principally to potential disruption of operations
associated with this move.
LIQUIDITY AND CAPITAL RESOURCES
Through September 1996, the Company has financed its operations primarily
through proceeds from the sale of the Company's equity securities. Cash flows
from operations have not been sufficient to support ongoing operations
primarily due to losses incurred during the qualification period and the
continuing development of new facilities in accordance with the Company's
growth strategy.
Cash flows used in investing activities have consisted primarily of
capital renovations, equipment purchases, a software license acquisition, and
organizational and preopening costs incurred prior to providing patient
services at each new facility. In addition to the sale of the Company's equity
securities, financing activities have included borrowings under capital leases
and a sale-leaseback agreement.
The Company made capital expenditures of approximately $600,000 and $2.2
million during the year ended December 31, 1995 and the nine months ended
September 30, 1996, respectively. Additional equipment was acquired through
capital leases, amounting to approximately $600,000 and $900,000 for the year
ended December 31, 1995 and the nine months ended September 30, 1996,
respectively.
During March 1996, the Company entered into a sale-leaseback agreement
with a third party to take advantage of favorable borrowing rates and maintain
liquidity. This party received warrants for the Company's equity securities as
a part of this transaction. The net book value of assets sold and subsequently
leased under this agreement totaled $342,244. Net proceeds were $337,792,
resulting in a net loss of $4,452. As part of this agreement, the Company has
an available line of credit to finance additional capital expenditures (up to
$1.0 million in the aggregate).
Page 7
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 8
Accounts receivable balances have increased $4.3 million since December
31, 1995. Most of the increase is a result of additional new facilities and
their corresponding increase in accounts receivable.
At December 31, 1995, the Company's working capital was $11.2 million,
compared to $4.2 million at December 31, 1994, representing an increase of $7.0
million. This increase was primarily attributable to the issuance of 200,000
additional shares of Series A Convertible Preferred Stock and 405,994 shares of
Series B Convertible Preferred Stock totaling $2.0 million and $8.4 million,
respectively. Working capital at September 30, 1996 was $6.0 million,
representing a decrease of $5.2 million from December 31, 1995 which was
primarily attributable to the financing of current operations. The Company
expects to invest approximately $1.0 million per facility to fund capital
renovations for preopening costs and working capital requirements before a
facility achieves profitability.
The Company leases space from Host Hospitals under operating lease
agreements having initial terms of five or more years. The Company leases
corporate office space under a noncancellable operating lease which expires in
the year 2000. Minimum annual lease payments on noncancellable operating
leases with maturities in excess of one year are as follows: $1.8 million in
1996, $3.1 million in 1997, $3.2 million in 1998, $3.2 million in 1999, $3.3
million in 2000, $1.8 million in 2001 and $500,000 thereafter.
On October 10, 1996, the Company completed an initial public offering (the
"Offering") of 2,500,000 shares of common stock, the net proceeds from which
aggregated approximately $13.4 million. On November 7, 1996, the underwriters
exercised their over-allotment option, resulting in the sale of 375,000
additional shares of common stock by the Company, the net proceeds of which
aggregated approximately $2.1 million. The principal reasons for this Offering
were to increase the Company's equity capital and to create a public market for
the Company's common stock, which will help facilitate future access to
capital, enhance the ability to pursue acquisitions, and provide a means for
attracting and retaining key employees. The Company expects to use
substantially all the proceeds for development and operation of additional
facilities, and the balance for working capital and other general corporate
purposes. The Company estimates that the net proceeds from the Offering,
together with existing or planned financing commitments, will be sufficient to
fund its continued development and meet anticipated cash needs of the Company
through at least 1997. However, there can be no assurance that the Company
will not be required to seek additional capital.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by
Page 8
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 9
those assets are less than the assets' carrying amount. Statement 121
also addresses the accounting for long-lived assets that are expected to be
disposed of. The Company adopted Statement 121 in the first quarter of 1996
and the effect was not material to the Company's operations or financial
position taken as a whole. Under Statement 121, property and equipment of the
Company are reviewed for impairment whenever events or circumstances indicate
that the asset's undiscounted expected cash flows are not sufficient to recover
its carrying amount. The Company measures an impairment loss by comparing the
fair value of the asset to its carrying amount. Fair value of an asset is
calculated as the present value of expected future cash flows.
In October 1995, the FASB issued Statement No. 123, Accounting for
Stock-Based Compensation, which provides an alternative to Accounting
Principles Board Opinion No. 25. Accounting for Stock Issued to Employees, in
accounting for stock-based compensation issued to employees. Statement No.
123 allows for a fair value-based method of accounting for employee stock
options and similar equity instruments. However, for companies that continue
to account for stock-based compensation arrangements under Opinion No. 25,
Statement No. 123 requires disclosure of the pro forma effect on net income
and earnings per share of its fair value-based accounting for those
arrangements. The Company adopted Statement No. 123 in the first quarter of
1996 and has elected to continue to account for stock-based compensation
arrangements under APB Opinion No. 25.
HEALTH CARE LEGISLATION
In recent years, an increasing number of legislative proposals have been
introduced or proposed in Congress and in some state legislatures which could
affect major changes in the health care system. Several of these legislative
proposals have included provisions that affect long-term care hospitals.
Management cannot predict whether such proposed legislation will be adopted or
if adopted, what effect, if any, such proposed legislation would have on the
operations of the Company.
IMPACT OF INFLATION
To date, inflation has not had a significant impact on the business,
financial condition or results of operations of the Company. Inflation could,
however, affect the Company's future net revenues and results of operation. As
a result, the Company may not be able to increase revenues to account fully for
increased operating expenses. In structuring its charges, the Company attempts
to anticipate inflation levels, but there can be no assurance that the Company
will be able to anticipate fully or otherwise respond to any future
inflationary pressures.
FORWARD LOOKING STATEMENTS
Certain of the statements made herein are forward looking statements, as
such term is used in Section 21E of the Securities Exchange Act of 1934. The
Company cautions readers that actual results could be materially different as a
result of various possibilities and differences between
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Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 10
anticipated and actual developments. Factors that could cause actual results
to differ from anticipated results include, but are not limited to changes in
health care regulation and/or health care reform, changes in the regulation of
relationships among health care providers, difficulty in obtaining necessary
licenses or certifications, ability to collect accounts receivable, changes in
reimbursement policies or procedures, changes in payor mix, changes in referral
source practices, changes in relationships with Host Hospitals and/or the
leases with such Host Hospitals, the relocation of the Oklahoma City Hospital,
competition, and the adequacy of professional liability insurance. The Company
undertakes no obligation to publicly release the results of any revisions to
any forward looking statements contained herein which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Page 10
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 11
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no reportable proceedings.
ITEM 2. CHANGE IN SECURITIES
(a) Not applicable.
(b) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) Not applicable.
(b) Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index for list of Exhibits.
(b) Not applicable.
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Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 12
SIGNATURES
Pursuant to the requirements 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.
INTENSIVA HEALTHCARE CORPORATION
Date: November 13, 1996 By /s/ John P. Keefe
--------------------------------------------
John P. Keefe, Chief Financial Officer
(Principal Financial and Accounting Officer)
Page 12
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------- -------
<S> <C>
3(i).1 Third Amended and Restated Certificate of Incorporation
27.1 Financial Data Schedule
</TABLE>
Page 13
Intensiva HealthCare Corporation
Form 10-Q FQE 9/30/96
<PAGE> 14
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
Assets 1995 1996
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $11,261,422 3,292,779
Accounts receivable, less allowance for doubtful accounts
of $139,500 and $228,000, respectively 985,697 5,333,734
Inventories 9,087 136,412
Prepaid expenses 134,318 175,654
----------- ----------
Total current assets 12,390,524 8,938,579
Property and equipment, net 587,904 3,037,393
Organizational and preopening costs, net 164,158 149,861
Other assets 555,467 935,585
----------- ----------
$13,698,053 13,061,418
=========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current installments of long-term obligations 210,290 406,557
Accounts payable and accrued expenses 483,707 1,881,060
Accrued salaries, wages, and benefits 224,139 657,688
Note payable - stockholder 265,200 -
----------- ----------
Total current liabilities 1,183,336 2,945,305
----------- ----------
Long-term obligations, less current installments 291,208 702,649
Deferred rent expense 433,333 969,980
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value,
3,465,000 shares authorized, issued and
outstanding 3,465 3,465
Series B convertible preferred stock, $0.001 par value,
2,232,967 shares authorized, issued and
outstanding 2,233 2,233
Common stock, $0.001 par value, 70 million shares
authorized, 1,332,100 shares issued and
outstanding 1,332 1,332
Additional paid-in capital 14,846,051 14,846,073
Accumulated deficit (3,062,905) (6,409,619)
----------- ----------
Total stockholders' equity 11,790,176 8,443,484
----------- ----------
$13,698,053 13,061,418
=========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-1
<PAGE> 15
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net patient service revenues $ 458,969 4,663,056 624,690 10,739,131
Costs and expenses:
Operating expenses 826,689 5,105,534 1,540,878 11,410,346
General and administrative 429,556 761,755 1,165,592 2,085,503
Provision for doubtful accounts 40,000 88,159 70,000 238,195
Depreciation and amortization 1,903 331,281 15,882 580,160
---------- ----------- ---------- ----------
Total costs and expenses 1,298,148 6,286,729 2,792,352 14,314,204
---------- ----------- ---------- ----------
Operating loss (839,179) (1,623,673) (2,167,662) (3,575,073)
Interest income 72,255 45,790 215,777 281,391
Interest expense (6,016) (18,860) (21,891) (53,032)
---------- ----------- ---------- ----------
Net loss $ (772,940) (1,596,743) (1,973,776) (3,346,714)
========== =========== ========== ==========
Pro forma loss per share $ (0.23) (0.48)
=========== ==========
Weighted average outstanding shares 7,030,062 7,030,062
=========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-2
<PAGE> 16
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $(772,940) (1,596,743) (1,973,776) (3,346,714)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,903 331,281 15,882 580,160
Provision for doubtful accounts 40,000 88,159 70,000 238,195
Increase in accounts receivable (483,833) (771,552) (701,050) (4,586,232)
Decrease (increase) in inventories, prepaid expenses,
and other assets 127,017 (11,871) (109,541) (633,406)
Increase in accounts payable and accrued expenses 55,032 747,481 168,199 1,397,353
Increase in accrued salaries, wages, and benefits 78,974 130,027 139,091 433,549
Increase in accrued rent differential 129,998 164,855 303,331 536,647
---------- ---------- ---------- ----------
Net cash used in operating activities (823,849) (918,363) (2,087,864) (5,380,448)
---------- ---------- ---------- ----------
Cash flows from investing activities:
Additions to property and equipment (14,935) (871,202) (138,263) (2,243,745)
Proceeds from sale of equipment - - - 337,792
Organizational and preopening costs (23,231) (9,479) (23,231) (127,358)
---------- ---------- ---------- ----------
Net cash used in investing activities (38,166) (880,681) (161,494) (2,033,311)
---------- ---------- ---------- ----------
Cash flows from financing activities:
Proceeds from issuance of preferred and common stock - - 6,304,900 22
Repayment of note payable - stockholder - - - (265,200)
Payments on long-term obligations (4,512) (125,502) (11,910) (289,706)
---------- ---------- ---------- ----------
Net cash provided by (used in) financing activities (4,512) (125,502) 6,292,990 (554,884)
---------- ---------- ---------- ----------
Increase (decrease) in cash and cash equivalents (866,527) (1,924,546) 4,043,632 (7,968,643)
Cash and cash equivalents, beginning of period 5,100,443 5,217,325 190,284 11,261,422
---------- ---------- ---------- ----------
Cash and cash equivalents, end of period $4,233,916 3,292,779 4,233,916 3,292,779
========== ========== ========== ==========
Supplemental cash flow information - cash paid for interest $ 6,016 $ 18,860 21,891 53,032
========== ========== ========== ==========
Supplemental information - noncash activity:
Acquisition of equipment through capital leases - $309,862 57,218 897,416
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-3
<PAGE> 17
INTENSIVA HEALTHCARE CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(1) Basis of Presentation
The condensed consolidated balance sheet as of September 30, 1996 and
related condensed consolidated statements of operations and cash flows
contained in this Form 10-Q, which are unaudited, include the accounts
of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts have been eliminated in consolidation. In the
opinion of management, all adjustments necessary for a fair
presentation of such financial statements have been included.
Adjustments consist only of normal recurring items. The results of
operations for the three or nine months ended September 30, 1995 and
1996, are not necessarily indicative of the results to be expected for
the full fiscal year.
The condensed consolidated financial statements do not include all
information and footnotes necessary for a complete presentation of
financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. Reference is made to
the Company's 1994 and 1995 audited financial statements and the
related notes, included on Form S-1 filed with the Securities and
Exchange Commission (File No. 333-08899) in connection with the
Company's initial public offering which was completed on October 10,
1996, which provide additional disclosures and a further description of
accounting policies.
(2) Net Loss Per Share
The Company's historical net loss per share calculations are based
upon the weighted average number of shares of common stock and common
stock equivalents outstanding. Shares issuable upon the exercise of
stock options or warrants have been excluded from historical per share
amounts because the effect of their inclusion would be anti-dilutive.
As a result of the conversion of the Company's preferred stock on
October 10, 1996 (see note 3), the number of common shares outstanding
increased from 1,332,100 shares to 7,030,062 shares and the cumulative
dividend requirement related to the preferred stock was eliminated
without payment of cash or issuance of stock. Accordingly, the
preferred dividends that would have been required during periods
prior to October 10, 1996 have not been reflected as additional amounts
attributable to common stockholders in the accompanying condensed
consolidated financial statements. Additionally, pro forma loss per
share, as if the shares issued upon the conversion had been outstanding
since the beginning of the respective periods, has been presented in
the condensed consolidated financial statements instead of historical
loss per share for the three months and the nine months ended
September 30, 1996 because it results in a more meaningful
presentation.
(3) Subsequent Events
On October 10, 1996, the Company completed an initial public
offering (the "Offering") of 2,500,000 shares of common stock, the net
proceeds from which aggregated approximately $13.4 million. In
connection with this Offering, each share of Series A and Series B
convertible preferred stock was converted into 5 1/2 shares of common
stock immediately prior to the Offering.
F-4
<PAGE> 18
On November 7, 1996, the Underwriters' exercised the over-allotment
option resulting in the sale of 375,000 additional shares of common stock, the
net proceeds from which aggregated approximately $2.1 million.
F-5
<PAGE> 1
EXHIBIT 3(I).1
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
<PAGE> 2
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
INTENSIVA HEALTHCARE CORPORATION
INTENSIVA HEALTHCARE CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "CORPORATION"), hereby certifies
as follows:
I. The name of the Corporation is Intensiva HealthCare Corporation. The
date of the filing of its original Certificate of Incorporation with the
Secretary of State of the State of Delaware was July 18, 1994. The name under
which the Corporation filed its original Certificate of Incorporation was
Transitional Care of America, Inc.
II. This Third Amended and Restated Certificate of Incorporation amends,
restates and integrates the provisions of the second Amended and Restated
Certificate of Incorporation of the Corporation filed with the Secretary of
State of the State of Delaware on December 22, 1995 (the "Second Amended and
Restated Certificate of Incorporation"), as amended July 17, 1996, was duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Sections 141(f), 242, and 245 of the General Corporation Law of
the State of Delaware (the "DGCL"), and was duly adopted by the written consent
of the stockholders of the Corporation in accordance with the applicable
provisions of Sections 228, 242 and 245 of the DGCL.
III. The text of the Second Amended and Restated Certificate of
Incorporation, as amended, is hereby further amended and restated in its
entirety to provide as follows:
ARTICLE I
NAME
The name of the Corporation is Intensiva HealthCare Corporation.
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the State of
Delaware, and the name of its registered agent at such address is:
The Corporation Trust Company
1209 Orange Street
New Castle County
Wilmington, Delaware 19801
Intensiva HealthCare Corporation - Third Amended and Restated Page 1
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 3
ARTICLE III
PURPOSE
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the DGCL.
ARTICLE IV
CAPITAL STOCK
Section 1. Number of Shares.
The total number of shares of capital stock which the Corporation shall
have the authority to issue is One Hundred Million shares, of which (a) Thirty
Million shares shall be preferred stock, par value $0.001 per share (the
"Undesignated Preferred Stock") and (b) Seventy Million shares shall be common
stock, par value $0.001 per share (the "Common Stock"). As set forth in this
Article IV, the Board of Directors or any authorized committee thereof is
authorized from time to time to establish and designate one or more series of
Undesignated Preferred Stock, to fix and determine the variations in the
relative rights and preferences as between the different series of Undesignated
Preferred Stock in the manner hereinafter set forth in this Article IV, and to
fix or alter the number of shares comprising any such series and the
designation thereof to the extent permitted by law.
The number of authorized shares of the class of Undesignated Preferred
Stock may be increased or decreased (but not below the number of shares
outstanding) by the affirmative vote of the holders of a majority of the Common
Stock entitled to vote, without a vote of the holders of the Undesignated
Preferred Stock, pursuant to the resolution or resolutions establishing the
class of Undesignated Preferred Stock or this Third Amended and Restated
Certificate of Incorporation, as it may be amended from time to time.
Section 2. General.
The designations, powers, preferences and rights of, and the
qualifications, limitations and restrictions upon, each class or series of
stock shall be determined in accordance with, or as set forth below in,
Sections 3 and 4 of this Article IV.
Section 3. Common Stock.
Subject to all of the rights, powers and preferences of the Undesignated
Preferred Stock and except as provided by law or in this Article IV (or in any
certificate of designation of any series of Undesignated Preferred Stock) or by
the Board of Directors or any authorized committee thereof pursuant to this
Article IV:
(a) the holders of the Common Stock shall have the exclusive right
to vote for the election of directors and on all other matters requiring
stockholder action, each share being entitled to one vote;
Intensiva HealthCare Corporation - Third Amended and Restated Page 2
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 4
(b) dividends may be declared and paid or set apart for payment upon
the Common Stock out of any assets or funds of the Corporation legally available
for the payment of dividends, but only when and as declared by the Board of
Directors or any authorized committee thereof; and
(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the net assets of the Corporation shall be
distributed pro rata to the holders of the Common Stock in accordance with
their respective rights and interests.
Section 4. Undesignated Preferred Stock.
Subject to any limitations prescribed by law, the Board of Directors or
any authorized committee thereof is expressly authorized to provide for the
issuance of the shares of Undesignated Preferred Stock in one or more series of
such stock, and by filing a certificate pursuant to applicable law of the State
of Delaware, to establish or change from time to time the number of shares to
be included in each such series, and to fix the designations, powers,
preferences and the relative, participating, optional or other special rights
of the shares of each series and any qualifications, limitations and
restrictions thereof. Any action by the Board of Directors or any authorized
committee thereof under this Section 4 shall require the affirmative vote of a
majority of the directors then in office or a majority of the members of such
committee. The Board of Directors or any authorized committee thereof shall
have the right to determine or fix one or more of the following with respect to
each series of Undesignated Preferred Stock to the extent permitted by law:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rates or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative and, if so, from
which date or dates, the payment date or dates for dividends, and the
participating and other rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of the shares of such
series;
(d) Whether the shares of such series shall be redeemable and, if so,
the price or prices at which, and the terms and conditions on which, such shares
may be redeemed;
(e) The amount or amounts payable upon the shares of such series and
any preferences applicable thereto in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;
(f) Whether the shares of such series shall be entitled to the
benefit of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund and the
manner of its application, including the price or prices at which such shares
may be redeemed or purchased through the application of such fund;
Intensiva HealthCare Corporation - Third Amended and Restated Page 3
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 5
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or of any other series
of the same or any other class or classes of stock of the Corporation and, if
so convertible or exchangeable, the conversion price or prices, or the rate or
rates of exchange, and the adjustments thereof, if any, at which such
conversion or exchange may be made, and any other terms and conditions of such
conversion or exchange;
(h) The price or other consideration for which the shares of such
series shall be issued;
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of Undesignated
Preferred Stock (or series thereof) and whether such shares may be reissued as
shares of the same or any other class or series of stock; and
(j) Such other powers, preferences, rights, qualifications,
limitations and restrictions thereof as the Board of Directors or any
authorized committee thereof may deem advisable.
ARTICLE V
STOCKHOLDER ACTION
Section 1. Actions at Stockholder Meetings.
Any action required or permitted to be taken by the stockholders of the
Corporation at any annual or special meeting of stockholders of the Corporation
must be effected at a duly called annual or special meeting of stockholders and
may not be taken or effected by a written consent of stockholders in lieu
thereof.
Section 2. Special Voting Requirements.
Where stockholder approval is required by applicable state law for any of
the following transactions, the vote required for such approval shall be the
affirmative vote of the holders of at least two-thirds of the voting power of
the outstanding shares:
(a) Any plan of merger;
(b) Any plan of exchange;
(c) Any sale, lease, transfer or other disposition of all or
substantially all of this Corporation's property and assets, including its
goodwill, not in the usual and regular course of its business;
(d) Any dissolution of this Corporation;
Intensiva HealthCare Corporation - Third Amended and Restated Page 4
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 6
(e) Any amendment to, or repeal of, a bylaw or bylaws lawfully
proposed by a stockholder or stockholders holding at least the required
statutory voting power; or
(f) Any amendment to, or repeal of, all or any portion of this
Article V, provided, however, that if the then current or a preexisting Board
of Directors of this Corporation shall by resolution adopted at a meeting of
the Board of Directors have approved one of the enumerated matters (other
than dissolution of this Corporation or an amendment of this Article V to alter
the two-thirds dissolution vote) and shall have determined to recommend it for
approval by the holders of shares entitled to vote on the matter, then the vote
required shall be the affirmative vote of the holders of at least a majority of
the voting power of the outstanding shares.
ARTICLE VI
DIRECTORS
Section 1. General.
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors except as otherwise provided herein or
required by law.
Section 2. Election of Directors.
Election of directors need not be by written ballot unless the By-laws of
the Corporation shall so provide.
Section 3. Terms of Directors.
The number of directors of the Corporation shall be fixed by resolution
duly adopted from time to time by the Board of Directors. The directors, other
than those who may be elected by the holders of any series of Undesignated
Preferred Stock of the Corporation, shall be classified, with respect to the
term for which they severally hold office, into three classes, as nearly equal
in number as possible. The initial Class I Directors of the Corporation shall
be James B. Tananbaum, M.D., and Phillip M. Nudelman, Ph.D.; the initial Class
II Directors of the Corporation shall be David W. Cross and Jeffrey J.
Collinson; and the initial Class III Directors of the Corporation shall be
David L. Steffy and Wilfred E. Jaeger. The initial Class I Directors shall
serve for a term expiring at the annual meeting of stockholders to be held in
1997; the initial Class II Directors shall serve for a term expiring at the
annual meeting of stockholders to be held in 1998; and the initial Class III
Directors shall serve for a term expiring at the annual meeting of stockholders
to be held in 1999. At each annual meeting of stockholders, the successor or
successors of the class of directors whose term expires at that meeting shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at such meeting and entitled to vote on the election of
directors, and shall hold office for a term expiring at the annual meeting of
stockholders held in the third year following the year of their election. The
directors elected to each class shall hold office until their successors are
duly elected and qualified or until their earlier resignation or removal.
Intensiva HealthCare Corporation - Third Amended and Restated Page 5
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 7
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Third Amended and Restated Certificate of Incorporation, the
holders of any one or more series of Undesignated Preferred Stock shall have
the right, voting separately as a series or together with holders of other such
series, to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of this Third Amended and Restated
Certificate of Incorporation and any certificates of designation applicable
thereto, and such directors so elected shall not be divided into classes
pursuant to this Section 3.
During any period when the holders of any series of Undesignated Preferred
Stock have the right to elect additional directors as provided for or fixed
pursuant to the provisions of Article IV hereof, then upon commencement and for
the duration of the period during which such right continues: (a) the then
otherwise total authorized number of directors of the Corporation shall
automatically be increased by such specified number of directors, and the
holders of such Undesignated Preferred Stock shall be entitled to elect the
additional directors so provided for or fixed pursuant to said provisions, and
(b) each such additional director shall serve until such director's successor
shall have been duly elected and qualified, or until such director's right to
hold such office terminates pursuant to said provisions, whichever occurs
earlier, subject to such director's earlier death, disqualification,
resignation or removal. Except as otherwise provided by the Board in the
resolution or resolutions establishing such series, whenever the holders of any
series of Undesignated Preferred Stock having such right to elect additional
directors are divested of such right pursuant to the provisions of such stock,
the terms of office of all such additional directors elected by the holders of
such stock, or elected to fill any vacancies resulting from the death,
resignation, disqualification or removal of such additional directors, shall
forthwith terminate and the total and authorized number of directors of the
Corporation shall be reduced accordingly.
Section 4. Vacancies.
Subject to the rights, if any, of the holders of any series of
Undesignated Preferred Stock to elect directors and to fill vacancies in the
Board of Directors relating thereto, any and all vacancies in the Board of
Directors, however occurring, including, without limitation, by reason of an
increase in size of the Board of Directors, or the death, resignation,
disqualification or removal of a director, shall be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
if less than a quorum of the Board of Directors. Any director appointed in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been duly elected and qualified or until his or her earlier resignation or
removal. Subject to the rights, if any, of the holders of any series of
Undesignated Preferred Stock to elect directors, when the number of directors
is increased or decreased, the Board of Directors shall determine the class or
classes to which the increased or decreased number of directors shall be
apportioned; provided, however, that no decrease in the number of directors
shall shorten the term of any incumbent director. In the event of a vacancy in
the Board of Directors, the remaining directors, except as otherwise provided
by law, may exercise the powers of the full Board of Directors until the
vacancy is filled.
Intensiva HealthCare Corporation - Third Amended and Restated Page 6
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 8
Section 5. Removal.
Subject to the rights, if any, of any series of Undesignated Preferred
Stock to elect directors and to remove any director whom the holders of any
such stock have the right to elect, any director (including persons elected by
directors to fill vacancies in the Board of Directors) may be removed from
office (a) only with cause and (b) only by the affirmative vote of the holders
of two-thirds of the shares then entitled to vote at an election of directors.
At least 30 days prior to any meeting of stockholders at which it is proposed
that any director be removed from office, written notice of such proposed
removal shall be sent to the director whose removal will be considered at the
meeting. For purposes of this Third Amended and Restated Certificate of
Incorporation, "cause," with respect to the removal of any director shall mean
only (i) conviction of a felony, (ii) declaration of unsound mind by order of
court, (iii) gross dereliction of duty, (iv) commission of any action involving
moral turpitude, or (v) commission of an action which constitutes intentional
misconduct or a knowing violation of law if such action in either event results
both in an improper substantial personal benefit and a material injury to the
Corporation.
Section 6. Changes to Number of Directors.
Any amendment to the By-Laws by the Board of Directors which changes the
number of Directors shall be permitted only upon the affirmative vote of at
least a majority of the full Board of Directors. When the number of directors
is so changed by action of the Board of Directors, any newly created
directorships or any decrease in directorships shall be so apportioned among
the classes of directors so as to make all classes as nearly equal in number as
possible. When the number of directors is reduced in the By-Laws, such
reduction in the number of persons actually holding the office of director
shall be accomplished only through the death, resignation, removal for cause,
or expiration of the term of a director. No director shall be removed from
office for the purpose of reducing the number of directors holding office to
that number of directors authorized in the By-Laws. Newly created
directorships shall be filled by a majority vote of the then sitting members of
the Board of Directors, and the term of each such newly created directorship
shall expire at the next expiration of terms of directors of the class to which
such newly created directorship is designated.
ARTICLE VII
LIMITATION OF LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the DGCL or (d) for any
transaction from which the director derived an improper personal benefit. If
the DGCL is amended after the effective date of this Third Amended and Restated
Certificate of Incorporation to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of a
director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the DGCL, as so amended.
Intensiva HealthCare Corporation - Third Amended and Restated Page 7
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 9
Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a director at the time of such repeal or
modification.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section 1. Amendment by Directors.
Except as otherwise provided by law, the By-laws of the Corporation may be
amended or repealed by the Board of Directors by the affirmative vote of a
majority of the directors then in office.
Section 2. Amendment by Stockholders.
The By-laws of the Corporation may be amended or repealed at any annual
meeting of stockholders, or special meeting of stockholders called for such
purpose, by the affirmative vote of at least two-thirds of the shares present
in person or represented by proxy at such meeting and entitled to vote on such
amendment or repeal, voting together as a single class; provided, however, that
if the Board of Directors recommends that stockholders approve such amendment
or repeal at such meeting of stockholders, such amendment or repeal shall only
require the affirmative vote of the majority of the shares present in person or
represented by proxy at such meeting and entitled to vote on such amendment or
repeal, voting together as a single class.
ARTICLE IX
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend or repeal this Third Amended
and Restated Certificate of Incorporation in the manner now or hereafter
prescribed by statute and this Third Amended and Restated Certificate of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation. No amendment or repeal of this Third Amended and
Restated Certificate of Incorporation shall be made unless the same is first
approved by the Board of Directors pursuant to a resolution adopted by the
Board of Directors in accordance with Section 242 of the DGCL, and, except as
otherwise provided by law, thereafter approved by the stockholders. Whenever
any vote of the holders of voting stock is required to amend or repeal any
provision of this Third Amended and Restated Certificate of Incorporation, and
in addition to any other vote of the holders of voting stock that is required
by this Third Amended and Restated Certificate of Incorporation or by law, the
affirmative vote of a majority of the outstanding shares entitled to vote on
such amendment or repeal, and the affirmative vote of a majority of the
outstanding shares of each class entitled to vote thereon as a class, shall be
required to amend or repeal any provision of this Third Amended and Restated
Certificate of Incorporation; provided, however, that the affirmative vote of
not less than two-thirds of the outstanding shares entitled to
Intensiva HealthCare Corporation - Third Amended and Restated Page 8
Certificate of Incorporation Adopted July 15, 1996
<PAGE> 10
vote on such amendment or repeal, and the affirmative vote of not less than
two-thirds of the outstanding shares of each class entitled to vote thereon as
a class, shall be required to amend or repeal any of the provisions of Article
V, Article VI, Article VII, Article VIII, or this Article IX of this Third
Amended and Restated Certificate of Incorporation.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by David W. Cross, its President, this 9th day of October, 1996.
By: /s/ David W. Cross
----------------------------------
David W. Cross, President
Intensiva HealthCare Corporation - Third Amended and Restated Page 9
Certificate of Incorporation Adopted July 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM INTENSIVA HEALTHCARE
CORPORATION'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,292,779
<SECURITIES> 0
<RECEIVABLES> 5,333,734
<ALLOWANCES> 228,000
<INVENTORY> 136,412
<CURRENT-ASSETS> 8,938,579
<PP&E> 3,037,393
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,061,418
<CURRENT-LIABILITIES> 2,945,305
<BONDS> 0
0
5,698
<COMMON> 1,332
<OTHER-SE> 8,436,454
<TOTAL-LIABILITY-AND-EQUITY> 13,061,418
<SALES> 0
<TOTAL-REVENUES> 10,739,131
<CGS> 0
<TOTAL-COSTS> 11,410,346
<OTHER-EXPENSES> 2,085,503
<LOSS-PROVISION> 238,195
<INTEREST-EXPENSE> 53,032
<INCOME-PRETAX> (3,346,714)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,346,714)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,346,714)
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
