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As filed with the Securities and Exchange Commission on January 19, 1999
Registration No. 333-65199
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3/A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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COMPLETE WELLNESS CENTERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1910135
(State of Incorporation) (I.R.S. Employer
Identification No.)
666 Eleventh Street, N.W.
Washington, D.C. 20001
(202) 639-9700
(Address and telephone number of principal executive offices)
C. Thomas McMillen
Chairman of the Board and Chief Executive Officer
Complete Wellness Centers, Inc.
666 Eleventh Street, N.W.
Washington, D.C. 20001
(202) 639-9700
(Name, address, and telephone number of agent for service)
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Copies to:
David E. Fleming, Esq.
Epstein Becker & Green, P.C.
250 Park Avenue
New York, New York 10177
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans,
check the following box. |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check
the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
Title of Each Class Amount to be Proposed Maximum Proposed Maximum
Of Securities to be Registered Offering Price Per Aggregate Offering
Registered Share (1) Price (1)
<S> <C> <C> <C>
Common Stock, 250,000 $3.50 (1) $875,000
$0.0001665
par value
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) based on a per share price of $3.50,
the average of the high and low sale prices per share of the Company's Common
Stock on January 14, 1999.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Items of Form S-3
<TABLE>
<CAPTION>
Form S-3 Registration Statement Location in Prospectus
Item and Heading
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<S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page Prospectus Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front Cover Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges Not Applicable; Risk
Factors; Not Applicable
4. Use of Proceeds Outside Front Cover; Use
of Proceeds
5. Determination of Offering Price Outside Front Cover Page
6. Dilution Not Applicable
</TABLE>
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<TABLE>
<S> <C>
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be Registered Information Incorporated
by Reference
10. Interests of Named Experts and Counsel Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information
by Reference Information Incorporated
by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities Not Applicable
</TABLE>
COMPLETE WELLNESS CENTERS, INC.
250,000 Shares Common Stock and
Common Stock Underlying
Purchase Warrants to purchase
Common Stock
($0.0001665 par value per share)
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This Prospectus relates to the public offering, which is not being underwritten,
of up to 250,000 shares (the "Resale Shares") of Common Stock, $0.0001665 par
value per share and Common Stock underlying Common Stock Purchase Warrants, of
Complete Wellness Centers, Inc. (referred to herein, together with its
majority-owned and wholly-owned subsidiaries, as "CWC," the "Company" or the
"Registrant" or "we"). The Resale Shares may be offered by certain stockholders
of the Company or by pledgees, donees, transferees or other successors in
interest that receive such shares as a gift, partnership distribution or other
non-sale related transfer (the "Selling Stockholders"). Certain of the Resale
Shares were received by certain Selling Stockholders and Warrant holders
pursuant to various agreements and grants at various times with piggyback
registration rights. Other shares being registered were issued by CWC to
executives of CWC as grants and still others are represented by Common Stock
Purchase Warrants issued to consultants or advisors to the Company or as
consideration for acquisitions made by the CWC. All of the Resale Shares were
issued pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), provided by Section
4(2) thereof. The Resale Shares are being registered by the Company pursuant to
registration rights agreements with the various Selling Stockholders. See the
"Plan of Distribution" section herein.
The Resale Shares may be offered by the Selling Stockholders from time to time
in transactions on the Nasdaq Small Cap Market, in privately negotiated
transactions, or by a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Resale Shares to or
through broker-dealers and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders or
the purchasers of the Resale Shares for whom such broker-dealers may act as
agent or to whom they sell as principal or both (which compensation to a
particular broker-dealer might be in excess of customary commissions). See "Plan
of Distribution." section herein.
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We will receive proceeds from the exercise of the warrants as listed in the
Selling Stockholders section of this prospectus. We will not receive proceeds
from the sale of the Resale Shares by the Selling Stockholders listed under the
"Stock" heading of the Selling Stockholders section of this prospectus. The
Company has agreed to bear certain expenses in connection with the registration
and sale of the Resale Shares being offered by the Selling Stockholders.
We intend that this registration statement will remain effective until no later
than December 31, 2003. On January 14, 1999, the last reported sale price for
the Common Stock, as reported on The Nasdaq Small Cap Market, was $3.5625 per
share. The Company's Common Stock is currently quoted on Nasdaq under the symbol
"CMWL."
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE"RISK FACTORS" BEGINNING ON PAGE 9.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- -------------------------------
The date of this Prospectus is January 19, 1999
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or by any other person. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
information herein is correct as of any time subsequent to the date hereof. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the securities covered by this Prospectus, nor does
it constitute an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation may not lawfully be made.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and the following regional offices of the
Commission: Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of prescribed rates. In addition, the Commission maintains a Web site at
http://www.sec.gov that contains the Company's reports, proxy and information
statements and other information that have been filed since the Company began to
file electronically with the Commission in February 1997. The Common Stock of
the Company is quoted on the Nasdaq Small Cap Market, and such material may also
be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") of which this
Prospectus is a part, including exhibits set forth therein or incorporated by
reference thereto, which has been filed electronically with the Commission under
the Securities Act of 1933, as amended (the "Act"). Statements made in this
Prospectus as to the contents of any referenced contract, agreement or other
document are not necessarily complete, and each such statement shall be deemed
qualified in its entirety by reference thereto. Copies of the Registration
Statement and the exhibits and schedules thereto may be obtained, upon payment
of the fee prescribed by the Commission, or may be examined without charge at
the office of the Commission or at the Commission's Web site.
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INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission (File No.
000-22115) pursuant to the 1934 Act are incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997 and as amended on Form 10-KSB/A filed April 14, 1998
and as amended on Form 10-KSB/A filed on January 19, 1999;
2. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998 and for June 30, 1998 and as amended on Form 10-QSB/A
filed October 1, 1998 and as both individually amended on Form 10-QSB/A
filed on January 19, 1999;
3.The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998;
4. The Company's Current Report on Form 8-K filed on January 16, 1998;
5. The Company's Current Report on Form 8-K filed on February 9, 1998;
6. The Company's Current Report on Form 8-K/A filed on March 12, 1998;
7. The Company's Current Report on Form 8-K filed on June 3, 1998;
8. The Company's Current Report on Form 8-K filed on July 10, 1998;
9. The Company's Current Report on Form 8-K filed on August 21, 1998;
10. The Company's Current Report on Form 8-K filed on September 21,
1998;
11. The Company's Current Report on Form 8-K filed on December 3, 1998;
12. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2 filed with the Commission
on February 19, 1997;
13. The Company's Proxy Statement and Notice of Annual Meeting filed on
May 4, 1998;
14.The Company's Proxy Statement and Notice of Special Meeting of
Stockholders filed on July 22, 1998;
15.The Company's Information Statement Pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder; and
16. The Company's Current Report on Form 8-K filed on December 30, 1998
All other documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus but prior to
the termination of the offering of the Shares.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus and
the Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document that also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement.
Upon written or oral request, the Company will provide without charge to
each person to whom a copy of the Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
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documents unless such exhibits are specifically incorporated by reference
therein). Requests should be submitted in writing or by telephone at (202)
639-9700 to Michael Brigante, Sr. Vice President, Chief Financial Officer and
Acting Secretary, Complete Wellness Centers, Inc., at the principal executive
offices of the Company, 666 Eleventh Street, N.W., Washington, D.C. 20001.
THE COMPANY
The following section contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in this Prospectus.
We were incorporated under the laws of the State of Delaware in November 1994.
We completed an initial public offering of Common Stock and Redeemable Common
Stock Warrants in February 1997. We have controlled, either through 100% or
majority ownership, four separate independent operating subsidiaries and are the
managing member of a limited liability corporation. We provide administrative
support services to all our subsidiaries including (1) management services; (2)
legal services; (3) accounting services; (4) purchasing services; and (5)
support services. All of our subsidiaries are focused in the health care
industry and each delivers a unique product or service sold to consumers
directly or through their sister companies.
Our subsidiary, Complete Wellness Medical Centers, Inc. ("CWMC") was
incorporated under the laws of the State of Delaware in August 1997. We own 100%
of CWMC. CWMC develops multi-disciplinary medical centers ("Integrated Medical
Centers") and furnishes certain support services to such facilities. Our
Integrated Medical Centers combine, in one practice, at the same location,
traditional health care providers, such as physicians and physical therapists
and alternative health care providers, such as chiropractors, acupuncturists and
massage therapists. We believe that our name-brand product offers the consumer a
highly desirable one-stop medical facility. At December 30, 1998 CWMC managed 87
Integrated Medical Centers and had additional agreements with chiropractors to
develop and manage 35 Integrated Medical Centers in existing states and
expansion into additional states.
CWMC develops Integrated Medical Centers generally through affiliations with
chiropractors (the "Affiliated Chiropractors") and their existing chiropractic
practices. We endeavor to enter into an agreement with a chiropractor who has an
existing chiropractic practice in a convenient location and who is an individual
who has demonstrated the entrepreneurial skills to build a practice. The
existing practice is used as a base for the development of an Integrated Medical
Center. Typically, CWMC establishes a new Integrated Medical Center by forming a
medical corporation, which is a general business corporation wholly-owned by the
company or a professional corporation that is owned by a nominee physician,
depending upon the applicable state law. The Affiliated Chiropractor establishes
a management company which contracts with CWMC to provide day-to-day management
of the Integrated Medical Center.
CWMC's development strategy is to develop additional Integrated Medical Centers
in local or regional groups or clusters. We plan to continue to develop
Integrated Medical Centers through affiliations with chiropractors and their
existing practices and health clubs and intend to begin development of
Integrated Medical Centers in connection with corporations, government offices,
or other organizations, in which cases the Integrated Medical Centers would be
developed in places such as office buildings.
We believe that our affiliation structure as opposed to an acquisition structure
and its unit minimum capital investment and therefore relatively minimum risk is
responsible for its early acceptance by both the investment community and
healthcare practitioners. Unlike traditional medical management companies that
acquire the clinics of their affiliated practitioners, our structure seeks to
have:
1. Minimal debt.
2. No goodwill.
3. Full recognition of "clinic" revenues.
4. Maximum incentive for participating doctors.
5. Expanded set of services to the patient base.
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We believe that this corporate structure contributes to the Company's revenue
growth and potential profitability, which is expected in early 1999.
While it is still too early to determine financially the effectiveness of our
business model, we believe certain patterns can be seen. The average Center, in
the first 12 months of operation after the traditional chiropractic clinic
became Integrated Medical Center, realized a growth in revenues of approximately
23%. The number of patients in the same time period has increased an average of
approximately 10%.
Our operating strategy is to develop brand name recognition by (i) providing
consumers the opportunity to obtain, and the convenience of obtaining, under the
supervision of a medical doctor, complementary traditional and alternative
medical treatments in one location, (ii) facilitating the efficient provision of
high quality patient care through the use of credentialing standards and
standardized protocols, (iii) establishing Integrated Medical Centers in local
and regional clusters for purposes of obtaining managed care contracts, (iv)
assisting in marketing the Integrated Medical Centers regionally and nationally,
on a coordinated basis, and furnishing management, marketing, financing and
other advice and support, and (v) achieving operating efficiencies and economies
of scale through the implementation of its integrated management information
system, the rotation of health care providers among geographically close
Integrated Medical Centers, increased purchasing power with suppliers, and
standardized protocols, administrative systems, and procedures.
We have begun preliminary discussions to acquire certain businesses which are
complimentary to our Integrated Medical Centers and which in some cases may
provide a further service to our Integrated Medical Center's patients. While we
intend to pursue the consummation of agreements to acquire such businesses;
there can be no assurance that any or all of these contemplated transactions
will occur. See "Risk Factors--Risks Related to Expansion Strategy".
We are not authorized or qualified as a corporation to engage in any activity
which may be construed or be deemed to constitute the practice of medicine, but
are an independent supplier of non-medical services only. The physicians and
chiropractors are responsible for all aspects of the practice of medicine and
chiropractic and the delivery of medical and chiropractic services (subject to
certain business guidelines determined in conjunction with us), including but
not limited to diagnosis, treatment, referrals and therapy. In connection with
any managed care contracts we may arrange on behalf of the Integrated Medical
Centers, we will need to manage the Integrated Medical Centers' utilization of
medical services to patients. If under such contracts, the Integrated Medical
Centers accept responsibility for the treatment of their patients by specialists
or at hospitals, we will also need to manage the practitioners' referral
patterns with respect to specialty physician and hospital services. However, we
would only provide management for payment purposes and would not, through such
process, interfere with the professional judgment of a medical practitioner or
prohibit a practitioner from providing any medical services.
The objective of our operating strategy is to facilitate the provision of a high
level of traditional and alternative medical care to patients in a convenient,
cost-effective manner. Key elements of our operating strategy are:
One Location. We attempt to provide consumers the opportunity to obtain, and the
convenience of obtaining, under the supervision of a medical doctor,
complementary traditional and alternative medical treatments in one location. We
believe that alternative medicine is growing in popularity, and that supervision
of treatment by a medical doctor may alleviate some patient and third party
payor concerns.
Facilitate the Efficient Provision of High Quality Care. Health care
practitioners under the supervision of a licensed medical doctor provide all
health care services at an Integrated Medical Center. We seek qualified and
reputable medical doctors. We further attempt to facilitate the efficient
rendering of high quality care through the use of credentialing and standardized
protocols. Additionally, in many states, only medical doctors are permitted to
order certain laboratory and radiological tests. We believe that supervision by
a medical doctor and a medical doctor's access to more sophisticated diagnostic
testing services will enhance the quality of patient care.
Establish Networks of Integrated Medical Centers to Obtain Managed Care
Contracts. A key component of our operating strategy is to attract both health
care practitioners and managed care payors. We attempt to attract health care
practitioners by, among other things, providing them greater access to managed
care contracts than they could attain independently and relieving them of
certain administrative responsibilities. We intend for our local and
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regional clusters of Integrated Medical Centers to attract managed care
contractors by providing single, integrated points of market entry, thereby
enabling managed care payors to more efficiently contract for the provision of
health care services for patient populations. Within our former OHS subsidiary,
we credential our licensed health care practitioners through a credentialing
function accredited by the National Committee for Quality Assurance. OHS has
developed standardized credentialing protocols and has developed and implemented
a utilization management program, for the purpose of attracting and managing its
managed care contracts. We have signed nine (9) such contracts and will be
implementing them in early 1999. Since our stock in OHS is being redeemed back
by OHS, we entered into an agreement with OHS whereby we and OHS will continue
to provide services to each other, consistent with past practices on a "most
favored vendor/customer" status subsequent to the completion of the redemption
which was effective November 20, 1998.
Provide Advice and Assistance. We intend to develop and implement advertising
and marketing programs for the Integrated Medical Centers primarily at the
regional and national levels, utilizing television, radio, and print advertising
as well as internal marketing promotions. The name of each Integrated Medical
Center includes the words "Complete Wellness Medical Center (SM)." Each
Integrated Medical Center displays signage bearing such words, or the words
"Complete Wellness Center (SM)." Our goal is to achieve "brand name" awareness
of the Integrated Medical Centers. There is no assurance, however, that we will
be able to realize this goal. An individual Integrated Medical Center may also
advertise its services locally, and we provide advice in that regard upon
request. We also furnish the Integrated Medical Centers management services,
financing services as requested and other advice and support. By doing so, we
attempt to relieve providers, to a limited extent, from certain burdens of
administering and managing a medical practice.
Achieve Operating Efficiencies and Economies of Scale. We attempt to organize
our Integrated Medical Centers into regional groups or clusters to utilize
employees and serve patients more effectively, to leverage management and other
resources, to increase purchasing power with suppliers, and to facilitate the
development of networks of affiliated physicians, chiropractors, and other
health care practitioners.
We plan to continue to develop Integrated Medical Centers primarily by
affiliating with chiropractors and their existing chiropractic practices. We
attempt to enter into agreements with chiropractors who are located in
convenient locations, and who have demonstrated the entrepreneurial skills to
build a practice. We believe that such chiropractors will consider affiliation
with us to be attractive because they may have greater access to managed care
contracts in the future through us and our network of Integrated Medical
Centers, will be relieved of certain administrative burdens, and may have the
opportunity to increase their practice income. An Integrated Medical Center is
usually established at the same location as the existing chiropractic practice,
although it could be established at a new or separate location. In August, 1998
we awarded three Complete Wellness Medical Centers an Award of Excellence. This
program was instituted to recognize exceptional performance.
Our subsidiary, Complete Wellness Smoking Cessation, Inc. ("Smokenders") was
incorporated under the laws of the State of Delaware in July 1997. We hold an
88.23% interest in Smokenders, with 11.77% ownership held by the management of
Smokenders. Smokenders was formerly owned by Oxford Health Plans and was
purchased from that company on July 31, 1997. Smokenders markets a patented
"Learn to Quit" kit to end users through a national network of trained
facilitators. Smokenders customers include government agencies, corporations,
CWMC, OHS and individuals. Smokenders is an adult education program which has as
its goal, the cessation of smoking for its clients as well as the opportunity
for its clients to be comfortable as a non-smoker. The company Smokenders was
created in 1969. Since it was founded, more than a million people have
successfully quit smoking using the Smokenders' patented techniques. The company
name is trademarked in more than 20 countries around the world. The Smokenders
system is currently marketed to hospitals, health clinics, weight-loss centers,
private corporations, the military services, and other federal and state
governmental organizations. The marketing effort has been recently redesigned
away from the traditional multi-seminar format to a self-taught audio tape
format as well as access through the Smokenders web site. We believe that the
recent state and possible federal government tobacco settlements afford
Smokenders a real opportunity to place its programs into almost every facet of
the private as well as the public sector through contracts with such state and
federal governments.
Our subsidiary, Complete Wellness Weight Management, Inc. ("CWWM") was
incorporated under the laws of the State of Delaware in December 1997. We own
100% of CWWM. CWWM agreed to purchase the assets of 56 centers, from
Nutri/System, LP subject to certain objectives to be accomplished by January 31,
1998 which date
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constituted the final closing of the purchased assets, that operate in 8 states.
The Company subsequently closed 18 of such centers that were unprofitable or too
geographically dispersed for effective management and control. On November 13,
1998 we announced a decision to divest the remaining weight management centers
and to focus our attention on our core business, the Integrated Medical Centers.
The Nutri/System weight loss programs will continue to be made available to the
Integrated Medical Centers. CWWM marketed, in a retail setting, food, medically
supervised weight loss programs and nutritional supplements. Included in the
asset purchase is the perpetual license to use the Nutri/System name and logo.
The Nutri/System program has both a traditional (non-medical) and medical weight
loss program.
Optimum Health Services, Inc. ("OHS") was incorporated under the laws of the
State of Delaware in May 1997. The Company held an 86.67% interest in OHS, with
13.33% ownership held by the management of OHS. OHS is a health care Management
Services Organization ("MSO") currently providing services to Health Maintenance
Organizations ("HMO's"). In addition to developing provider networks, OHS
delivers support services which include accepting delegated claims,
credentialing, utilization management, quality assurance, marketing, and
provider relations functions.
On May 13, 1998, our Board of Directors adopted a plan to spin-off our interest
in OHS. The plan was amended on November 3, 1998 to spin-off our interest in OHS
to OHS management. Under the plan, we converted our investment in OHS totaling
approximately $1,000,000 at October 31, 1998 into 266,736 OHS ten-year warrants
at an exercise price of $0.01 per share. If the warrants were to be exercised at
this time, they would represent 90.2% of the current and outstanding shares of
OHS (71% on a fully diluted basis). The warrants cannot be exercised prior to
one year nor in an amount at any time such that the our ownership of OHS's
common stock would represent greater than 49% of the total OHS common stock
outstanding. In addition, OHS formally withdrew its registration statement
initially filed with the Commission on July 16, 1998.
We are in the process of completing our analysis of the Year 2000 ("Y2K") issue
and so far believe we are in very good position to proceed into the next
millenium. We have not received Y2K certification back from the telephone
companies, insurance companies, and the principal bank that we deal with. We
have examined our internal operations and those of our clinics to determine
whether any applications are running on old equipment or with DOS or Windows
v3.1 operating systems which may be subject to clock problems associated with
the Y2K. This could cause the computer and the software running on the computer
that depend on the system clock to stop functioning. Some of our clinics must
update the computer platforms on which the clinic management information
software operates. These clinics have been identified and notices are being or
have been prepared to complete the upgrade. The clinic software has been updated
and is through the beta test and ready for rollout. Negotiations are virtually
complete with the clinic software vendor for such rollout.
Our accounting and data base software has been reviewed and determined to be Y2K
compliant. We recently acquired a new telephone system which is also compliant
with Y2K requirements. This is key to assure that telephone and voice mail logs
are accurately created based on time and date. We have had no indication from
any vendor, supplier or dependent institution that we should expect any
significant problem.
We expect to complete our Y2K analysis before the end of the first quarter of
1999 and expect to receive certification from vendors that the software and
hardware used by us is Y2K compliant. At that time, our Board of Directors will
be briefed and will be given certification that we are Y2K compliant.
As of December 31, 1998, we had, net of the weight loss center employees, 26
employees and the 87 operating Integrated Medical Centers had approximately 372
licensed professional employees. The 26 employees consisted of 23 in finance and
administration and 3 in sales and marketing in our weight management subsidiary.
RISK FACTORS
An investment in the Securities offered hereby involves a high degree of risk
and should be made only by investors who can afford the loss of their entire
investment. You should carefully review and consider the following risks as well
as the other information set forth in this Prospectus before deciding to invest
in shares of our Common Stock. This Prospectus also contains certain
forward-looking statements that involve risks and uncertainties. These
statements relate to our future plans, objectives, expectations and intentions.
These statements may be identified by
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the use of words such as "expects", "believes", anticipates", "hopes", "intends"
and "plans" and similar expressions. Our actual results could differ materially
from those discussed in these statements. Factors that could contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this Prospectus.
Limited Operating History; History of Losses; No Assurance of Profitability. We
commenced operations in January 1995 and began managing our first Integrated
Medical Center in September 1995. We have a limited operating history upon which
you can judge our performance. We have experienced net losses, negative cash
flow, a deficit in working capital, and an accumulated deficit each month since
our inception. At December 31, 1997 we had an accumulated deficit of $5,364,415
and a working capital deficit of $291,723. There can be no assurance that we
will be profitable near term. At present, we are planning a Common Stock private
placement sale for a cash infusion of $1 million as a bridge to a $20 million
Preferred Stock Offering in the first quarter of 1999. There can be no assurance
that such capital can be raised in the time period in which it will be needed.
Risks Related to Expansion Strategy. We have expanded from managing one
Integrated Medical Center at December 31, 1995 to 87 Integrated Medical Centers
at December 30, 1998. Our growth will depend upon a number of factors,
including: (i) our ability to develop Integrated Medical Centers where we had
agreements with chiropractors as of December 30, 1998; (ii) our ability to
identify and affiliate with a sufficient number of suitable, well-located
chiropractors and their existing chiropractic practices; (iii) whether new
Integrated Medical Centers will be opened in accordance with our plans,
including the anticipated average costs to us (our average cost to open a new
Integrated Medical Center has been approximately $10,000; in recent months, we
have added new training modules and administrative support services, which we
expect will increase the cost of medical integration to approximately $15,000);
(iv) our ability to adequately train Affiliated Chiropractors and their office
staff on the operation and administration of Integrated Medical Centers and our
management information system; (v) our ability to attract and retain medical
doctors and other traditional health care providers for employment at the
Integrated Medical Centers; (vi) our ability to support and manage Integrated
Medical Centers effectively; (vii) whether anticipated performance levels at
Integrated Medical Centers will be achieved; and (viii) regulatory constraints.
There can be no assurance that our expansion strategy will be successful or that
modifications to our expansion strategy will not be required. Any significant
delay in the opening of new Integrated Medical Centers or the failure of
Integrated Medical Centers to achieve anticipated performance levels could
adversely affect our future financial condition and operating results. In
pursuing our expansion strategy, we intend to expand into new geographic
markets. In entering a new geographic market, we will be required to comply with
laws and regulations of jurisdictions that differ from those applicable to our
current operations, deal with different payors as well as face competitors with
greater knowledge of such markets than ours. There can be no assurance that we
will be able to effectively establish a presence in any new market. Our strategy
also involves growth through acquisitions of complementary businesses in order
to enhance the services offered by our Integrated Medical Centers. We will be
subject to various risks associated with an acquisition growth strategy,
including the risk that we will be unable to identify and recruit suitable
acquisition candidates in the future or to absorb and manage the acquisitions.
Possibility of Regulatory Challenge to the Affiliation Relationships. Physician
practice management companies ("PPMs") typically bill, collect, disburse funds
to pay expenses (including their own fees) or otherwise manage traditional
physician or dental practices. We likewise undertake to perform these services,
albeit for Integrated Medical Centers. However, while PPMs may subcontract
certain of their functions to third parties unaffiliated with the practices they
manage, we subcontract the day-to-day management of the Integrated Medical
Centers to management companies controlled by the Affiliated Chiropractors. The
Affiliated Chiropractors both refer patients to the Integrated Medical Centers
from their existing chiropractic practices and are employed by the Integrated
Medical Centers. We are unaware of scrutiny by state or federal health care law
enforcement officials of the structure of typical PPM-provider-subcontractor
relationships to date. We believe that our practice model is similar to many of
the tradition PPM's and that our Affiliated Chiropractor relationships do not
violate applicable federal or state health care regulatory requirements. An
investigation was commenced against us in November 1997 by certain federal
authorities, but no claims or actions have been asserted as of the date of this
filing. There can be no assurance, however, that health care law enforcement
officials will not take a contrary view and bring a claim against us under
federal law. Prosecutions by such enforcement officials could have a material
adverse effect on us, even if our Affiliated Chiropractor relationships were
subsequently determined lawful.
Reliance on Affiliated Chiropractors. Our revenue and cash flow are dependent on
the generation and collection of revenue by the Integrated Medical Centers and
the efficient management of both the Integrated Medical Centers and
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the Affiliated Chiropractors' Management Company (or "Admincorps") by the
Affiliated Chiropractors. The Admincorps both (i) employ the administrative
staff who perform the day-to-day administrative functions of the Integrated
Medical Centers, including functions related to the collection of revenue and
(ii) are responsible for many expenses required for the operation of the
Integrated Medical Centers, including, for example, office and many medical
supplies. The ability of the Admincorp to meet its financial obligations,
including its financial obligations to us, likewise depends on the collection of
revenue by the Integrated Medical Center and efficient management of both the
Integrated Medical Center and the Admincorp. During start-up, the Admincorp must
rely upon the capital invested in it by, or other financial assistance from, the
Affiliated Chiropractor or his existing chiropractic practice in order to timely
meet its financial obligations. In some cases, due to delays in the submission
of bills and collection of revenue by the Integrated Medical Center, the
start-up phase has been extended and, in such cases as well as in some cases
where the start-up phase has not been extended, the Admincorp has had to rely
upon financial assistance from the Affiliated Chiropractor or the Affiliated
Chiropractor's existing chiropractic practice longer than anticipated. We have
previously obtained financial information or performed credit checks on
Affiliated Chiropractors or, where organized as separate legal entities, their
existing chiropractic practices on a selective basis. We, at our discretion, may
do so prior to entering into other agreements with chiropractors to develop new
Integrated Medical Centers. In addition, the revenues flowing to the Affiliated
Chiropractor's existing chiropractic practice, or to the Affiliated Chiropractor
through his existing practice, diminish over time, in some cases, substantially
and rapidly. Thus, the Affiliated Chiropractor's ability to provide additional
financial assistance to the Admincorp, and/or to cover his obligations with
respect to the office space and equipment leased or subleased by him or his
existing chiropractic practice to us for use by the Integrated Medical Center,
may diminish. Accordingly, there can be no assurance that any such affiliation
with a chiropractor will result in a successful relationship.
Our agreements with Affiliated Chiropractors and entities controlled by them
relating to the operation and management of the Integrated Medical Centers are
generally for initial terms of five years, and can be as long as ten years. They
may be renewed in five-year increments, up to four times, by mutual consent. An
Affiliated Chiropractor may terminate such an agreement if we materially breach
it and, if the breach is correctable, we fail to cure the breach within ten days
after written notification. The start-up phase can be as long as six months
following integration, which is the date on which a medical doctor first sees a
patient for the Integrated Medical Center ("Integration Date"). The loss of a
substantial number of such agreements, or the loss of a substantial number of
Affiliated Chiropractors, would have a material adverse effect on us.
Dependence On Third Party Reimbursement. Substantially all revenue of the
Integrated Medical Centers, on which our income is dependent, derives from
commercial health insurance, state workers' compensation programs, and other
third party payors. Following our specific approval, the Integrated Medical
Centers may also treat patients covered under federal and state funded health
care programs. All of these providers and programs are regulated at the state or
federal level. There are increasing and significant public and private sector
pressures to contain health care costs and to restrict reimbursement rates for
health care services. Several states have taken measures to reduce the
reimbursement rates paid to health care providers in their states. We believe
that additional states will implement reductions from time to time. Reductions
in Medicare and Medicaid rates often lead to reductions in the reimbursement
rates of other third party payors as well. Thus, changes in the level of support
by federal and state governments of health care services, the methods by which
health care services may be delivered, and the prices of such services may all
have a material adverse impact on revenue of the Integrated Medical Centers,
which in turn could have a material adverse effect on us.
Third party payors are generally not familiar with reimbursing for traditional
and alternative health care services, such as chiropractic, in the same medical
practice. The third party payors may disagree with the description of or coding
of a bill for medical services, or may contest a description or code under a
lower fee schedule. Such disagreements on description of professional services
or bill coding, particularly where the third party payor is a federal or state
funded health care program, could result in lesser reimbursement, which could
have a material adverse effect on the Integrated Medical Centers and ultimately
on us. Persistent disagreements or alleged "upcoding" could result in
allegations of fraud or false billing, both of which constitute felonies under
federal law. Such an allegation, if proven, could result in forfeitures of
payment, civil monetary penalties, civil fines, suspensions, or exclusion from
participating in federal or state funded health care programs, and have a
material adverse effect on us. Investigation and prosecutions for fraudulent or
false billing could have a material adverse effect on us, even if such
allegations were disproven. No such allegations have been made to date although
we have been under investigation since November 1997 by the U.S. Attorney for
the Eastern District of Virginia. An
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employee of one of our subsidiaries has received a target letter and the
investigation appears to be focused on two clinics in Virginia.
Our income may be adversely affected by the uncollectibility of the Integrated
Medical Centers' medical fees from third party payors or by delay in the
submission of claims, a problem experienced by certain Integrated Medical
Centers, and the long collection cycles for such receivables. Many third party
payors, particularly insurance carriers covering automobile no-fault and
workers' compensation claims refuse, as a matter of business practice, to pay
claims unless submitted to arbitration. Further, third-party payors may reject
medical claims if, in their judgment, the procedures performed were not
medically necessary or if the charges exceed such payor's allowable fee
standards. In addition, some receivables may not be collected because of
omissions or errors in timely completion of the required claim forms. The
inability of the Integrated Medical Centers to collect their receivables could
materially adversely affect us.
Risks Associated with Managed Care Contracts. An increasing percentage of
patients are coming under the control of managed care entities. We believe that
our success will, in part, depend upon our ability to negotiate, on behalf of
the Integrated Medical Centers, favorable managed care contracts with health
maintenance organizations ("HMOs") and other private third party payors. Such
contracts often shift much of the financial risk of providing care from the
payor to the provider by requiring the provider to furnish all or a portion of
its services in exchange for a fixed, or "capitated," fee per member patient,
per month, regardless of the level of such patients' utilization rates and,
sometimes in the case of primary care physicians, to accept financial risk for
health care services not normally furnished by such physicians (e.g., specialty
physician or hospital services). Some managed care agreements also offer "shared
risk" provisions under which providers and provider practice management concerns
can earn additional compensation based on the utilization of services by
members, but may be required to bear a portion of any loss in connection with
such "shared-risk" provisions. Any such losses could have a material adverse
effect on us. In order for capitated contracts, especially any with
"shared-risk" provisions to be profitable for us, we must effectively monitor
the utilization of its services delivered to members of the managed care
organization who are patients of the Integrated Medical Centers and, to the
extent the Integrated Medical Centers are responsible for overall patient care,
monitor the utilization of specialist physicians or hospitals, negotiate
favorable rates with such other providers, and obtain, on favorable terms,
stop-loss protection limiting its per enrollee exposure above specified
thresholds. We do not currently have a utilization management program, but have
commenced preliminary discussions with a software vendor regarding the potential
use of its program for that purpose. Further, certain of our operating
strategies (e.g., having all treatments supervised by a physician) are intended
to attract managed care contracts for the Integrated Medical Centers. Third
party payors are not, however, generally familiar with traditional and
alternative health services being provided within the same medical practice and
may have concerns about contracting with such practices. For this and other
reasons, there can be no assurance that we will be able to negotiate
satisfactory managed care contracts for the Integrated Medical Centers. Nor can
there be any assurance that any managed care contracts we enter into on behalf
of the Integrated Medical Centers will not adversely affect the Integrated
Medical Centers or us.
Health Care Reform. Although Congress failed to pass comprehensive health care
reform legislation in 1996, the we anticipate that Congress and state
legislatures will continue to review and assess alternative health care delivery
and payment systems and may in the future propose and adopt legislation
effecting fundamental changes in the health care delivery system. Also, in 1997,
Congress enacted legislation that has major reductions in the rate of increase
of Medicare and Medicaid spending over the next five years as part of efforts to
balance the federal budget. We cannot predict the scope or effect of any
existing legislation concerning health care reform, including legislation
affecting the Medicare and Medicaid programs. Any proposed federal legislation,
if adopted, could result in significant changes in the availability, delivery,
pricing and payment for health care services and products. Various states also
have undertaken or are considering significant health care reform initiatives.
There can be no assurance that any recently enacted or proposed health care
reform legislation, if and when adopted, will not have a material adverse effect
on us.
Dependence Upon Key Personnel. We are dependent upon the active participation of
our executive officers, particularly our founder, Chairman and Chief Executive
Officer, C. Thomas McMillen. The loss of the services of Mr. McMillen could have
a material adverse effect on us. We have an employment contract with Mr.
McMillen extending through August 31, 2001. We do not currently hold a "key-man"
life insurance policy on the life of Mr. McMillen.
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Professional Liability. The Integrated Medical Centers employ health care
practitioners at the Integrated Medical Centers for the delivery of health care
services to the public. They are thus exposed to the risk of professional
liability claims. We do not ourselves provide such services or control the
provision of health care services by the Integrated Medical Centers'
practitioners or their compliance with regulatory and other requirements in that
regard. We might nevertheless be held liable for medical negligence on their
part.
We have an insurance policy that, subject to certain conditions, provides both
us and our subsidiaries medical malpractice insurance and managed care errors
and omissions insurance retroactive to the Integration Dates of the Company's
current Integrated Medical Centers and one former Integrated Medical Center. The
policy provides coverage for $1,000,000 per claim per Integrated Medical Center,
subject to an aggregate limit of $3,000,000 per Integrated Medical Center per
year. The policy will also cover us with respect to Integrated Medical Centers
as they are opened. There is no deductible under the policy.
The foregoing policy is a "claims made" policy. Thus, it provides coverage for
covered claims made during the policy's term but not for losses occurring during
the policy's term for which a claim is made subsequent to the expiration of the
term. As to future Integrated Medical Centers, the Integrated Medical Center
must submit an application and pay the premium with respect thereto within two
weeks and 30 days of the desired effective date of coverage, respectively. The
policy is also subject to biannual audits of patient visits.
There can be no assurance, however, that we, our employees, or the licensed
health care practitioners employed by or associated with the Integrated Medical
Centers will not be subject to claims in amounts that exceed the coverage limits
under the policy or that such coverage will be available when needed. Further,
there can be no assurance that professional liability insurance will continue to
be available to us or the Integrated Medical Centers in the future at adequate
levels or at an acceptable cost to either. A successful claim against us in
excess of our insurance coverage could have a material adverse effect upon our
business. Claims against us, regardless of their merits or eventual outcome,
also may have an adverse effect upon us.
Government Regulation; Pending Federal Investigation. Federal and state laws
extensively regulate the relationships among providers of health care services,
physicians and other clinicians. These laws include federal fraud and abuse
provisions. Such provisions prohibit the solicitation, receipt, payment, or
offering of any direct or indirect remuneration for the referral of patients for
which reimbursement is made under any federal or state funded health care
program or for the recommending, leasing, arranging, ordering or providing of
services covered by such programs. States have similar laws that apply to
patients covered by private and government programs. Federal fraud and abuse
laws also impose restrictions on physicians' referrals for designated health
services covered under Medicare or Medicaid to entities with which they have
financial relationships. Many states have adopted similar laws that cover
patients in private programs as well as government programs. There can be no
assurance that the federal and state governments will not consider additional
prohibitions on physician ownership, directly or indirectly, of facilities to
which they refer patients, which could adversely affect the Company. Violations
of these laws may result in substantial civil or criminal penalties for
individuals or entities, including large civil money penalties and exclusion
from participation in federal or state health care programs. Such exclusion, if
applied to our Integrated Medical Centers, could result in significant loss of
reimbursement and could have a material adverse effect on us.
In November 1997, various of our facilities and operations were searched by
federal authorities pursuant to search warrants, and the government removed
various computer records and written documents. Various of our employees and
certain of our subsidiaries were served with subpoenas requesting records and
documents related to billing and claims coding, clinical relationships and
corporate records. We believe that we could be a target in this investigation.
One employee has received a target letter stating that the employee was a
subject of the investigation. The investigation appears to be focused on two
clinics in Virginia. While it is too early to predict the outcome of any of the
ongoing investigations or the initiation of any additional investigations, were
we to be found in violation of federal or state laws relating to Medicare,
Medicaid, CHAMPUS or similar programs, we could be subject to substantial
monetary fines, civil and criminal penalties and exclusion from participation in
the Medicare, Medicaid or CHAMPUS programs and similar other reimbursement
programs (although these programs have been a small portion of the Company's
revenue). However, any such sanctions could have a material adverse effect on
our future financial position and results of operations.
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Federal law also prohibits conduct that may be or result in price-fixing or
other anti-competitive conduct. Moreover, we may in the future contract with
licensed insurance companies and/or HMO's. Certain of such contracts may require
the Integrated Medical Centers on behalf of which we contract to assume risk in
connection with providing health care services under capitation arrangements. To
the extent that the Integrated Medical Centers or we may be deemed to be in the
business of insurance as a result of entering into such arrangements, they may
be subject to a variety of regulatory and licensing requirements applicable to
insurance companies or HMOs. There can be no assurance that we or the Integrated
Medical Centers will not be adversely affected by such regulatory
determinations.
Moreover, the laws of the federal government and of many states prohibit
physicians from sharing professional fees, or "splitting fees," with anyone
other than a member of the same profession or with a member of the same
profession outside group practice. These laws and their interpretations vary
from state to state and are enforced by the courts and by regulatory authorities
with broad discretion. Expansion of our operations to certain jurisdictions may
require structural and organizational modifications of our form of relationship
with the Integrated Medical Centers, which could have an adverse effect on us.
Although we believe our operations, as currently conducted are in material
compliance with existing applicable laws, there can be no assurance that review
of our business by courts or regulatory authorities will not result in a
determination that could adversely affect our operations or that the health care
regulatory environment will not change so as to restrict our existing operations
or its expansion.
Federal law and the laws of many states regulate the sale of franchises.
Franchise laws require, among other things, that a disclosure document be
prepared and given to prospective franchisees. We believe that Integrated
Medical Centers formed as business corporations wholly owned by us are not
subject to such laws. Integrated Medical Centers formed as physician-owned
professional corporations may be subject to them. Although many PPM's have
management contracts with entities similar to the Integrated Medical Centers, if
such laws are deemed to apply, we would be required to prepare and deliver a
disclosure document to the physician that owns the professional corporation, who
might be our employee. Federal law and the laws of certain states also regulate
the sale of so-called business opportunities. Franchise laws and business
opportunity laws and their interpretation vary from state to state and are
enforced by the courts and regulatory authorities with broad discretion. Failure
to comply with these laws could give rise to a private right of action for
damages or rescission, civil fines and penalties, and, in some cases, criminal
sanctions. We believe that our form of relationship with Integrated Medical
Centers and Admincorps is not the type intended to be covered by such laws.
There can be no assurance that review of our business by regulatory authorities
would not result in a determination that could adversely affect our operations
or require structural and organizational modifications of our form of
relationship with Integrated Medical Centers that could have an adverse effect
on us.
State Laws Prohibiting the Corporate Practice of Medicine. In states where we
believe general business corporations are permitted to own medical practices,
the Integrated Medical Centers are formed as general business corporations
wholly-owned by us. In other states, the Integrated Medical Centers are formed
as professional corporations owned by one or more medical doctors licensed to
practice medicine under applicable state law. Corporations, such as us, are not
permitted under certain state laws to practice medicine or exercise control over
the medical judgments or decisions of practitioners. Corporate practice of
medicine laws and their interpretations vary from state to state and are
enforced by the courts and by regulatory authorities with broad discretion. We
believe that we perform only non-medical administrative services, do not
represent to the public or its clients that we offer medical services and do not
exercise influence or control over the practice of medicine by the practitioners
with whom we contract. Expansion of our operations to certain jurisdictions may
require structural and organizational modifications of our form of relationship
with practitioners in order to comply with corporate practice of medicine laws,
which could have an adverse effect on us. Although we believe our operations as
currently conducted are in material compliance with existing applicable laws,
there can be no assurance that our structure will not be challenged as
constituting the unlicensed practice of medicine or that the enforceability of
the agreements underlying this structure will not be limited. If such a
challenge were made successfully in any state, we could be subject to civil and
criminal penalties under such state's law and could be required to restructure
our contractual arrangements in that state. Such results, or the inability to
successfully restructure its contractual arrangements, could have a material
adverse effect on us.
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State Regulation of Insurance Business and HMOs. Laws in all states regulate the
business of insurance and the operation of health maintenance organizations, or
HMOs. Many states also regulate the establishment and operation of networks of
health care providers. Many state insurance commissioners have interpreted their
states' insurance statutes to prohibit entities from entering into risk-based
managed care contracts unless there is an entity licensed to engage in the
business of insurance, such as an HMO, in the chain of contracts. An entity not
licensed to engage in the business of insurance that contracts directly with a
self-insured employer in such a state may be deemed to be engaged in the
unlicensed business of insurance. While these laws do not generally apply to the
hiring and contracting of physicians by other health care providers, there can
be no assurance that regulatory authorities of the states in which we operate
would not apply these laws to require licensure of our operations as an insurer,
as an HMO, or as a provider network. We believe that we are in compliance with
these laws in the states in which we do business, but there can be no assurance
that future interpretations of insurance and health care network laws by
regulatory authorities in these states or in the states into which we may expand
will not require licensure or a restructuring of some or all of our operations.
Geographic Concentration. Approximately 50% of our centers are located in the
states of Florida and North Carolina. Any negative market or regulatory
developments in these states could have an adverse effect on us.
Competition. The managed health care industry, including the provider practice
management industry, is highly competitive. We compete with other companies for
physicians and other practitioners of health care services as well as for
patients. We compete not only with national and regional provider practice
management companies, but also with local providers, many of which are trying to
combine their own services with those of other providers into delivery networks.
Certain of the companies are significantly larger, provide a wider variety of
services, have greater financial and other resources, have greater experience
furnishing provider practice management services, and have longer established
relationships with buyers of these services than we do, and provide at least
some of the services provided by us. In addition, companies with greater
resources than ours that are not presently providing integrated provider
practice management services could decide to enter the business and engage in
activities similar to those in which we are engaged. There can be no assurance
that we will be able to compete effectively.
Loans to Integrated Medical Centers. Under the terms of several of its early
management agreements, we were required to make loans to certain of the
Integrated Medical Centers in amounts up to $40,000 each. We ceased this
practice in 1997 and have removed this provision from our management agreements.
However, the loans currently outstanding to the early Integrated Medical Centers
are being collected. The failure of a substantial number of the early Integrated
Medical Centers to repay such loans, to the extent taken, could have a minor
adverse effect on our financial condition.
Control by Existing Stockholders. Our executive officers and directors control
or own approximately 42% of the outstanding shares of Common Stock. As a result,
such persons may be able to determine the election of all of our directors and
the outcome of all issues submitted to our stockholders. Furthermore, such
concentration of ownership could limit the price that certain investors might be
willing to pay in the future for shares of Common Stock, and could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire or control us. Wexford
Spectrum Investors LLC and Imprimis Investors LLC (together "Wexford") has given
notice to us that it intends to exercise its right under the Investment
Agreement between Wexford and us to place on our Board sufficient number of
Board Members to exercise control of the Board. This action took place on
January 4, 1999 by our inability to redeem the Senior Convertible Preferred
Stock on or before January 3, 1999. In addition, Wexford has the right to
convert the Senior Convertible Preferred Stock into approximately 3,000,000
shares of Common Stock on or any time after January 3, 1999 which then would
represent over 54% of the outstanding Common Stock.
Limitation of Directors' Liability. Our Certificate of Incorporation and By-laws
provide that a director of the Company will not be personally liable to us or
our stockholders for monetary damages for breach of the fiduciary duty of care
as a director, subject to certain limitations imposed by the Delaware General
Corporation Law. Thus, under certain circumstances, neither we nor our
stockholders will be able to recover damages in the event that a director(s)
takes actions which harm us.
Absence of Dividends. We have not paid any cash dividends on our Common Stock
since our inception and do not plan to pay cash dividends on the Common Stock in
the foreseeable future. We anticipate that future earnings, if any, will be
retained to finance future operations and expansion.
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Possible Volatility of Common Stock Market Prices. From time to time there may
be significant volatility in the market price of the Common Stock. Our quarterly
operating results, changes in general conditions in the economy or the health
care industry, or other developments affecting us, could cause the market price
of our Common Stock to fluctuate substantially. The equity markets have, on
occasion, experienced significant price and volume fluctuations that have
affected the market prices for many companies' securities and have often been
unrelated to the operating performance of these companies. Concern about the
potential effects of health care reform measures has contributed to the
volatility of stock prices of companies in health care and related industries
and may similarly affect the price of the Common Stock.
Anti-Takeover Provisions; Common and Preferred Stock Authorized. Our Board of
Directors has the authority to issue up to 50,000,000 shares of Common Stock and
up to 2,000,000 shares of Preferred Stock in one or more series and to determine
the number of shares in each series, as well as the designations, preferences,
rights and qualifications or restrictions of those shares without any further
vote or action by the stockholders. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of the holders
of any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company. We
are currently seeking to raise capital which may include the sale of up to
1,667,000 shares of Preferred Stock. In addition, we are subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law.
In general, this statute prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner.
No Assurance of Continued Nasdaq SCM Listing; Risk of Low-Priced Securities;
Risk of Application of Penny Stock Rules. We are listed on the Nasdaq SCM. The
Board of Governors of the National Association of Securities Dealers, Inc. has
established certain standards for the continued listing of a security on Nasdaq
SCM. The continued listing standards require, among other things, that an issuer
have net tangible assets (total assets, excluding goodwill, minus total
liabilities) of at least $2,000,000 or a market capitalization of at least
$35,000,000; that the minimum bid price for the listed securities be $1.00 per
share; that the minimum market value of the "public float" be at least
$4,000,000 and that there be at least two market makers for the issuer's
securities. A deficiency in either the market value of the public float or the
bid price maintenance standard will be deemed to exist if the issuer fails the
individual stated requirement for ten consecutive trading days. Continued
listing on the Nasdaq SCM also requires us to adhere to certain corporate
governance rules. There can be no assurance that we will continue to satisfy the
requirements for maintaining a Nasdaq SCM listing. On November 20, 1998, we
received notice from Nasdaq that we did not meet the net asset requirement of
Nasdaq SCM listing. We responded to Nasdaq with our plan for continued listing
specifying the planned $1 million Common Stock sale and followed by the planned
$20 million Private Placement of Series C Convertible Preferred Stock in the
first quarter of 1999. There can be no assurance that either of these two
actions will or can take place given the uncertainty of the capital markets and
the new Board of Director composition. If our securities were to be excluded
from Nasdaq SCM, it would adversely affect the prices of such securities and the
ability of holders to sell them, and we would be required to comply with the
initial listing requirements to be relisted on Nasdaq SCM.
If we are unable to satisfy Nasdaq SCM's maintenance requirements and the price
per share were to drop below $5.00, then unless we satisfied certain net asset
tests, our securities would become subject to certain penny stock rules
promulgated by the Commission. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document prepared by the Commission that
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from such rules, the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to
the transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. If our Common Stock becomes subject to the
penny stock rules, you may find it more difficult to sell your shares.
16
<PAGE> 17
Dilution. We have outstanding 100,000 shares of Senior Convertible Preferred
Stock that may be converted into 2,875,142 shares of Common Stock after January
3, 1999 at the holders' option at a price of no more than $1.75 per share of
Common Stock. If exercised and not redeemed prior to conversion, such a
conversion of the Preferred Stock into Common Stock will cause immediate and
substantial dilution to the shareholders of Common Stock outstanding and will
after conversion represent at least 54% of our voting stock. The holders of the
Senior Convertible Preferred Stock gave notice and have, as of January 4, 1999
gained control of the Board of Directors. As a result of the Senior Convertible
Preferred Stockholder's control of our Board of Directors and the potential for
dilution of our Common Stockholders, there are substantial risks that our future
actions may be restricted, have adverse effects to our Common Stock share price,
or other activities currently anticipated may not be completed in a timely or
effective manner.
Risks Associated with Forward-Looking Statements Included in this Prospectus.
This Prospectus contains certain forward-looking statements regarding the plans
and objectives of management for future operations, including plans and
objectives relating to the development of Integrated Medical Centers. The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. Our plans and objectives are
based on a successful execution of our expansion strategy and assumptions that
the Integrated Medical Centers will be profitable, that the health care industry
will not change materially or adversely, and that there will be no unanticipated
material adverse change in our operations or business. Assumptions relating to
the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond our control. Although we believe that our assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the forward-looking
statements included in this Prospectus will prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking statements
included herein, particularly in view of our early stage operations, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives and plans will be achieved.
USE OF PROCEEDS
All of the proceeds from the sale of the Resale Shares as listed under the
"Stock" heading of the Selling Stockholders section of this prospectus will go
to the Selling Stockholders and we will not receive any monies from such sales.
CWC will receive the proceeds from the exercise of the Warrants to purchase
Common Stock as listed under the heading "Stock Underlying Warrants". The
proceeds from the subsequent sale of the Common Stock received by the Selling
Stockholders from the exercise of the Warrants will not be received by CWC.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock owned
by each of the Selling Stockholders. None of the Selling Stockholders has had
any other material relationship with the Company within the past three years
other than as a result of the ownership of the Resale Shares or other securities
of the Company. Because the Selling Stockholders may offer all or some of the
Resale Shares which they hold pursuant to the offering contemplated by this
Prospectus and because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the Resale Shares, no estimate
can be given as to the amount of Resale Shares that will be held by the Selling
Stockholders after completion of this offering. The Resale Shares offered by
this Prospectus may be offered from time to time by the Selling Stockholders
named below:
17
<PAGE> 18
Stock and Stock Underlying Warrants Requiring S-3 Registration
Stock Listing
<TABLE>
<CAPTION>
Number of Number of
Shares Shares
Owned Being
Name and Adress of Prior to Ownership After
Selling Stockholders Offering Offered Offering
Shares %(1)
<S> <C> <C> <C> <C>
S. R. Vallejo FBO (2) 1,500 1,500 0 0
Anthony C. Vallejo
875 Hanover Way
Lakeland, FL 33813
S. R. Vallejo FBO (2) 1,500 1,500 0 0
Christina A. Vallejo
875 Hanover Way
Lakeland, FL 33813
Stephen H. Hamic (2) 4,000 4,000 0 0
1740 Comanche Trail
Lakeland, FL 33803
Steven T. Moore (2) 5,000 5,000 0 0
Universal Building Specialties, Inc.
P. O. Box 1722
Lakeland, FL 33802-1722
Jason Elkin (2) 21,000 21,000 0 0
5784 Lake Forest Drive
Suite 290
Atlanta, GA 30328
Jason Elkin (2) 20,000 20,000 0 0
5784 Lake Forest Drive
Suite 290
Atlanta, GA 30328
Joseph Raymond (2) 28,000 28,000 0 0
500 Craig Road
2nd Floor
Manalapan, NJ 07726
Jill Brigante, Custodian for (2) 2,000 2,000 0 0
Jacqueline P. Brigante, NJUGMA
17 Daniel Drive
Belle Mead, NJ 08502
Jill Brigante, Custodian for (2) 2,000 2,000 0 0
Virginia A. Brigante, NJUGMA
17 Daniel Drive
Belle Mead, NJ 08502
Theresa & Karl Szabo (2) 2,000 2,000 0 0
699 Long Lake Drive
Oviedo, FL 32765
Audrey Dickinson (2) 3,000 3,000 0 0
1680 Oakhurst Avenue
Winter Park, FL 32789
Peter DiPasqua, Jr. (2) 5,000 5,000 0 0
2138 Lake Drive
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C>
Winter Park, FL 32789
Robert C. and Chantel M. Natale (2) 5,000 5,000 0 0
800 Westwind Court
Maitland, FL
------- ------- ------- -------
Total 100,000 100,000 0 0
------- ------- ------- -------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Stock Underlying Warrants
Structure Management, Inc. (3) 120,000 120,000 0 0
500 Craig Road
Manalapan, NJ 07726
Chris Janish (3) 25,000 25,000 0 0
40 Broad Street, Suite 2100
New York, NY 10004
Chris Janish (3) 5,000 5,000 0 0
40 Broad Street, Suite 2100
New York, NY 10004
------- ------- ------- -------
Total 150,000 150,000 0 0
------- ------- ------- -------
Grand Total 250,000 250,000 0 0
======= ======= ======= =======
</TABLE>
(1) Based upon 2,457,968 shares of Common Stock outstanding on December 31,
1998. Excludes shares of Common Stock that may be issued upon conversion of
$5,000,000 of Senior Convertible Preferred Stock that may be converted into
Common Stock at the rate equal to the lesser of $1.75 per share of Common Stock
or 75% of the average closing "bid" price of the Company's publicly traded
Common Stock for the five trading days immediately preceding the conversion
date. If the $5,000,000 shares of Preferred Stock are converted at $1.75 per
share of Common Stock, the number of shares of Common Stock owned would be
2,857,142 shares. This Registration Statement shall also cover any additional
shares of Common Stock which become issuable in connection with the shares
registered for sale hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of the Registrant's
outstanding shares of Common Stock.
(2) On October 24, 1998, Wexford Spectrum Investors, LLC and Imprimis
Investors, LLC completed the private sale of the shares held to various
purchasers and in various quantities totaling 100,000 shares.
(3) The Company, at various times and in varying quantities and prices has
issued Common Stock Purchase Warrants to its consultants and advisors for
services rendered to the Company totaling 150,000 shares as described in the
Warrant Agreements attached as Exhibits to this Registration Statement.
RECENT DEVELOPMENTS
Robert Mrazek, a Director of the Company, resigned his position as CEO of the
Company's smoking cessation subsidiary effective September 15, 1998. Also
effective September 10, 1998, Mr. Frederick Simon resigned from the Company's
Board. Mr. Simon is a Sr. Vice President of Wexford Management, Inc.
OHS was incorporated under the laws of the State of Delaware in May 1997. The
Company held an 86.67% interest in OHS, with 13.33% ownership held by the
management of OHS. OHS is a health care Management Services Organization (MSO)
currently providing services to Health Maintenance Organizations (HMOs). In
addition to
19
<PAGE> 20
developing provider networks, OHS delivers support services which include
accepting delegated claims, credentialing, utilization management, quality
assurance, marketing, and provider relations functions.
On May 13, 1998, the Company's Board of Directors adopted a plan to spin-off the
Company's interest in OHS. The plan was amended on November 3, 1998 to spin-off
the Company's interest in OHS to OHS management. The spin-off was effective on
November 20, 1998. Under the plan, the Company converted its investment in OHS
totaling approximately $1,000,000 at October 31, 1998 into 266,736 OHS ten-year
warrants at an exercise price of $0.01 per share. If the warrants were to be
exercised at this time, they would represent 90.2% of the current and
outstanding shares of OHS (71% on a fully diluted basis). The warrants cannot be
exercised prior to one year nor in an amount at any time such that the Company's
ownership of OHS's common stock would represent greater than 49% of the total
OHS common stock outstanding.
On July 20, 1998, the Company through a newly established subsidiary, OPPO,
acquired the assets of Accident and Industrial Injury Associates, Inc., ("AIIA")
for 20,000 warrants to purchase Common Stock of the Company at $3.31 per share
and sold 55% of OPPO to OHS for $18,000 as evidenced by a promissory note. OHS
will manage OPPO and for consideration for its management of OPPO, will earn
6.67% equity for each of three years. OHS will own 75% of OPPO at the conclusion
of the three years. AIIA had over 2,000 providers in its network who are now
part of OPPO. The two managed care contracts previously held by AIIA have been
assigned to OPPO. The contracts have not been extensively used in the past few
years and must be reactivated. In December, 1998, the Company determined that
the Representations and Warranties granted by the sellers were not accurate at
the time AIIA was acquired by the Company. We have established that the AIIA was
not in good standing in the state of Florida and had not been in good standing
for over two years. Our legal position is under review and our board of
Directors approved rescission of the acquisition agreement and has tasked
management to determine any legal remedies.
On October 19, 1998, the Company sold to Wexford Spectrum Investors LLC and
Imprimis Investors LLC ("Investors") Notes in the aggregate amount of $475,000
principal of Senior Secured Floating Rate Bridge Notes due February 1, 1999. Of
the $475,000 in aggregate principal amount of the notes, $350,000 represents
term loans and $125,000 represents revolving loans which may be approved by the
Investors for new chiropractor affiliations on a case by case basis.
On November 5, 1998, the Company entered into an agreement with Dr. Frank
Liberti, a nationally known consultant, to support the Company's expansion
strategy. This agreement provides to the Company several hundred-candidate
chiropractic practices for integration into the CWC model of wellness and
integrative medicine. Dr. Liberti has consulted with approximately 10,000
chiropractors and is a recognized authority in practice development. The Company
believes that Dr. Liberti will assist CWC in securing and potentially tripling
the number of clinics operating in the CWC model of integrative medicine. The
agreement also calls for Dr. Liberti to provide training services to CWC's
professional and administrative clinical staff as well as use of his training
facility. Additionally, he is to provide certain equipment and products for sale
at the Company's Integrated Medical Centers at a discounted price. The Company,
through September 1, 1999 will advance to Dr. Liberti an amount equal to
$100,000 for every 10 binding Integration Contracts up to 100 binding
Integration Contracts executed by the Company as a direct result of Dr.
Liberti's efforts up to a maximum of $1,000,000. Such advances will be in the
form of a promissory note at 6.1% interest and secured by Dr. Liberti's assets
and the assets of his companies. The Company shall be entitled to debit all
forms of Dr. Liberti's compensation until such time as all advances have been
paid in full. The Company will also manage Dr. Liberti's companies as part of
the agreement. The Company expects that Dr. Liberti's involvement with the
Company will be significant in the Company's expansion strategy.
Complete Wellness Weight Management, Inc. ("CWWM") was incorporated under the
laws of the State of Delaware in December 1997. The Company owns 100% of CWWM.
CWWM agreed to purchase the assets of 56 weight loss centers from Nutri/System,
LP, subject to certain objectives to be accomplished by January 31, 1998 which
date constituted the final closing of the purchased assets. The Company
consolidated seven such centers in certain geographical areas and closed eleven
other non-profitable center locations and through November 13, 1998 operated 38
such centers.
On November 13, 1998, the Company's Board of Directors authorized the Company to
sell and/or otherwise divest CWWM, a wholly owned subsidiary, of the remaining
38 weight loss centers owned and operated by CWWM. This
20
<PAGE> 21
divestiture, along with previous divestitures, is expected to allow management
to focus on the Company's core business, integrating traditional and
complementary/alternative medical centers and to improve the Company's operating
results. The Company anticipates that the weight loss programs offered by CWWM
will continue to be offered by its Integrated Medical Centers after the
divestiture. Management is in the process of developing a plan to implement the
Board's action and is developing an accurate estimate of the financial impact
attributable to the CWWM divestiture. However, management believes the ultimate
impact will be material to the Company's consolidated financial position and
results of operations. An initial estimate of the financial impact to the
consolidated financial position is approximately $1.5 million. The final
financial impact thereof is expected to be determinable by the end of the first
quarter of 1999 provided CWWM is able to substantially complete the
renegotiation of remaining lease and patient obligations. CWWM marketed, in a
retail setting, food, medically supervised weight loss programs and nutritional
supplements. Included in the asset purchase was the continual right to use the
Nutri/System name and logo, subject to certain anti-competition provisions,
quality standards and other customary covenants. The Nutri/System program had
both a traditional (non-medical) and medical program.
PRO FORMA UNAUDITED CONDENSED FINANCIAL DATA
The following pro forma unaudited condensed financial data is based upon the
historical financial statements of Complete Wellness Centers, Inc. as of
September 30, 1998 and for the nine months then ended and for the year ended
December 31, 1997, adjusted to give effect to (i) the disposition of OHS, a
majority-owned subsidiary of the Company and (ii) the disposition of CWWM, a
wholly-owned subsidiary of the Company. The disposition and related adjustments
are described in the accompanying notes. The pro forma adjustments are based
upon available information and certain assumptions that management believes are
reasonable. The Pro Forma Financial Data does not purport to represent what the
Company's results of operations would have actually been had such dispositions
in fact occurred on January 1 of each period presented or to project the
Company's results of operations for any future period. The Pro Forma Financial
Data should be read in conjunction with the historical financial statements of
Complete Wellness Centers, Inc. for such periods incorporated by reference
hereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for such periods incorporated by reference hereto.
PRO FORMA UNAUDITED CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Pro Forma
Complete
Complete Wellness Wellness
Centers, Inc. Centers, Inc.
for the year ended for the year ended
December Disposition of Disposition of December
31, 1997 OHS CWWM 31, 1997
--------------------- ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Revenues $ 9,006,874 $ - $ - $ 9,006,874
Direct Expenses 10,417,981 (261,683) - 10,156,298
Network development - - -
General and administrative 2,775,886 (55,671) - 2,720,215
Depreciation and amortization 89,245 (1,329) - 87,916
--------------------- ----------------- ------------------- ------------------
Operating loss (4,276,238) 318,683 - (3,957,555)
Other income (expense) 99,805 (1,001) - 98,804
--------------------- ----------------- ------------------- ------------------
Net loss $ (4,176,433) $ 317,682 $ - $ (3,858,751)
===================== ================= =================== ==================
</TABLE>
<TABLE>
<CAPTION>
Pro Forma
Complete
Complete Wellness Wellness
Centers, Inc. Centers, Inc.
for the nine months for the nine months
ended September Disposition of Disposition of ended September
30, 1998 OHS CWWM 30, 1998
--------------------- ----------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Revenues $ 20,847,009 $ - $ (6,487,510) $ 14,359,499
Direct Expenses 18,713,857 - (6,451,574) 12,262,283
Network development 606,084 (606,084) - -
General and administrative 4,737,720 - (882,220) 3,855,500
Depreciation and amortization 148,338 - (32,485) 115,853
--------------------- ----------------- ------------------- ------------------
Operating loss (3,358,990) 606,084 878,769 (1,874,137)
Other income
(expense) 26,110 - - 26,110
--------------------- ----------------- ------------------- ------------------
Net loss $ (3,332,880) $ 606,084 $ 878,769 $ (1,848,027)
===================== ================= =================== ==================
</TABLE>
21
<PAGE> 22
PRO FORMA UNAUDITED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
Pro Forma
Complete Complete
Wellness Wellness
Centers, Inc. Centers, Inc.
As of September Disposition of Disposition of As of September
30, 1998 OHS (1) CWWM (2) 30, 1998
----------------- ------------------ ------------------- -------------------
ASSETS
<S> <C> <C> <C> <C>
Cash $ 860,330 $ (71,761) $ (303,111) $ 485,458
Patient receivables, net 5,338,240 (940) - 5,337,300
Inventory 634,689 - (578,269) 56,420
Prepaid expenses 152,399 (1,066) (147,236) 4,097
Other assets 131,123 - - 131,123
Deposits 80,795 (5,061) (52,737) 22,997
----------------- ------------------ ------------------- -------------------
Total current assets 7,197,576 (3,828) (1,081,353) 6,037,395
Investment in affiliate - 75,000 - 75,000
Furniture and equipment,
net 604,001 (30,077) (139,579) 434,345
----------------- ------------------ ------------------- -------------------
Total assets $ 7,801,577 $ (33,905) $ (1,220,932) $ 6,546,740
================= ================== =================== ===================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Total current liabilities $ 6,519,093 $ (32,836) $ (1,220,932) $ 5,265,325
Total stockholders'
equity 1,282,484 (1,069) - 1,281,415
----------------- ------------------ ------------------- -------------------
Total liabilities and
stockholders' equity $ 7,801,577 $ (33,905) $ (1,220,932) $ 6,546,740
================= ================== =================== ===================
</TABLE>
- ---------------------------------------------------------------------
(1) Under the Company's disposition plan, as amended on November 3, 1998,
the Company has converted its investment in OHS totaling approximately
$1 million at October 31, 1998 into 266,736 OHS ten year warrants at an
exercise price of $0.01 per share. If the warrants were exercised at
this time, they would represent 90.2% of the current issued and
outstanding share of OHS (or 71% on a fully diluted basis). The warrants
can not be exercised prior to one year nor in an amount at any time such
that the Company's ownership of OHS's common stock would represent
greater than 49% of the total OHS outstanding common stock. The pro
forma adjustment to reflect the reduction of all income and expense
items attributable to OHS. The Company has valued the OHS warrants
received at $75,000 and has reflected such amounts as an investment in
OHS and reflected the difference between that amount and the net book
value of OHS's assets and liabilities as a reduction in the Company's
net equity.
(2) The pro forma adjustment to reflect the reduction of all income and
expense items attributable to CWWM.
Under the Company's current disposition plan which has neither been
finalized nor approved by the Company's Board of Directors, the Company
will either (i) abandon the subsidiary, (ii) cause the subsidiary to
file for protection under bankruptcy statutes, or (iii) attempt to find
a buyer for the subsidiary's stock. The Company anticipates the ultimate
resolution of the disposal plan to occur in the first quarter of 1999
and anticipates incurring a loss that would be material to its
consolidated financial position and consolidated results of operations.
22
<PAGE> 23
PLAN OF DISTRIBUTION
Under the Company's current disposition plan which has neither been finalized
nor approved by the Company's Board of Directors, the Company will not receive
proceeds from the sale of Resale Shares in the offering. The Resale Shares
offered hereby may be sold by the Selling Stockholders from time to time in
transactions in the Nasdaq market, in negotiated transactions, or a combination
of such methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing market prices or
at negotiated prices. The Selling Stockholders may effect such transactions by
selling the Resale Shares to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of the Resale Shares for
whom such broker-dealers may act as agents or to whom they sell as principals,
or both (which compensation as to a particular broker-dealer might be in excess
of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the Resale Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Resale Shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of the Resale Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Resale Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
The Company has advised the Selling Stockholders that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they must comply with the applicable provisions under Regulation M under
the Securities Exchange Act of 1934, as amended ("Regulation M") and, in
connection therewith, the Selling Stockholders may not engage in any
stabilization activity in connection with any securities of the Company, that
they must furnish copies of this Prospectus to each broker-dealer through which
the shares of Common Stock included herein may be offered, and that they may not
bid for or purchase any securities of the Company or attempt to induce any
person to purchase any securities of the Company except as permitted under
Regulation M. The Selling Stockholders have also agreed to inform the Company
and broker-dealers through whom sales may be made hereunder when the
distribution of the shares is completed.
Rules 102 and 103 under the Exchange Act prohibits participants in a
distribution from bidding for or purchasing for an account in which the
participant has a beneficial interest, any of the securities that are the
subject of the distribution. Rule 104 under the Regulation M governs bids and
purchases made to stabilize the price of a security in connection with a
distribution of the security.
The Resale Shares were originally issued under the various agreements
pursuant to exemptions from the registration requirements of the Securities Act
provided by Section 4(2) thereof. The Company agreed to register the Resale
Shares under the Securities Act. The Company has agreed to pay all fees and
expenses incident to the filing of this Registration Statement other than
underwriting discounts, commissions and fees and disbursements of counsel for
the Selling Stockholders.
23
<PAGE> 24
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Epstein Becker & Green, P.C., New York, New York.
EXPERTS
The consolidated financial statements of Complete Wellness Centers, Inc.
appearing in Complete Wellness Centers, Inc. Annual Report (as amended on Form
10-KSB/A) for the years ended December 31, 1997 and 1996 have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
have been incorporated herein by reference in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
24
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all estimated
expenses in connection with the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
SEC Registration fee .................................. $ 236.95
Legal expenses ...................................... 15,000.00
Accounting fees and expenses ........................ 10,000.00
---------
Total .......................................... $ 25,236.95
=========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act"). Article VII of the Registrant's Bylaws provides for
mandatory indemnification of its directors and permissible indemnification of
its officers, employees and other agents to the maximum extent permitted by the
Delaware General Corporation Law. The Registrant has entered into
Indemnification Agreements with its officers and directors which are intended to
provide the Registrant's officers and directors with further indemnification to
the maximum extent permitted by the Delaware General Corporation Law. Reference
is also made to Section XII B of the Investor Rights Agreement contained in
Exhibit 4.3 incorporated by reference herein, which contains provisions
indemnifying officers and directors of the Registrant against certain
liabilities. Reference is also made to the Underwriting Agreements entered into
in connection with the Company's initial public offering indemnifying officers
and directors of the Company and other persons against certain liabilities,
including those arising under the Act.
Item 16. Exhibits and Financial Statement Schedules
<TABLE>
<CAPTION>
Number Description
- ------- -------------
<S> <C>
4.1 (1) Form of Common Stock Certificate
4.18 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.19 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.20 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.21 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.22 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.23 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.24 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.25 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.26 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.27 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.28 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.29 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.30 Purchase and Sale Agreements for the Common Stock sold in
a private sale to 12 purchasers of the stock previously
held by Wexford Spectrum Investors LLC and Imprimis
Investors LLC.
4.32 Common Stock Purchase Warrant dated December 2, 1997
to Chris Janish for 25,000 shares.
4.33 Common Stock Purchase Warrant dated October 21, 1998 to
Chris Janish for 5,000 shares.
4.34 Common Stock Purchase Warrant dated October 21, 1998
to Structure Management, Inc. for 120,000 shares.
5.1 Opinion of Epstein Becker & Green, P.C.
23.1 Consent of Ernst & Young, LLP, Independent Accountants.
</TABLE>
1
<PAGE> 26
<TABLE>
<S> <C>
23.2 Consent of Epstein Becker & Green, P.C. (included in
Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
- - ---------------------
(1) Incorporated by reference to identically numbered exhibits included in
the Company's Registration Statement on Form SB-2 (File No. 333-18291)
declared effective with the Securities and Exchange Commission on
February 19, 1997.
Item 17. Undertaking
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of the Registrant, Indemnification Agreements
entered into between the Registrant and its officers and directors, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
2
<PAGE> 27
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Washington, District of Columbia on this 19th day of
January, 1999.
COMPLETE WELLNESS CENTERS, INC.
By: /s/ C. Thomas McMillen
----------------------------
(C. Thomas McMillen)
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints C. Thomas McMillen and E. Eugene Sharer,
and each of them singly, as true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities to sign the Registration Statement filed
herewith and any or all amendments to said Registration Statement (including
post-effective amendments and registration statements filed pursuant to Rule 462
and otherwise), and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission
granting unto said attorneys-in-fact and agents the full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the foregoing, as full to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his substitute, may lawfully do
or cause to be done by virtue hereof.
Witness our hands on the date set forth below.
3
<PAGE> 28
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- -------- -------
<S> <C> <C>
/s/ C. Thomas McMillen Chairman of the Board and January 19, 1999
- -------------------------- Chief Executive Officer
(C. Thomas McMillen) (Principal Executive Officer)
/s/ E. Eugene Sharer Director and Vice Chairman January 19, 1999
- - ------------------------- of the Board
(E. Eugene Sharer)
/s/ Eric Kaplan President and Director January 19, 1999
- --------------------------
(Eric Kaplan)
/s/ Michael Brigante Chief Financial Officer January 19, 1999
- - ------------------------- (Principal Accounting and
(Michael Brigante) Financial Officer)
/s/ Joseph J. Raymond Director January 19, 1999
- - --------------------------
(Joseph J. Raymond)
/s/ Jay McMillen Director January 19, 1999
- - --------------------------
(Jay McMillen, M.D.)
/s/ Robert Mrazek Director January 19, 1999
- - --------------------------
(Robert Mrazek)
/s/ Sergio Vallejo Director January 19, 1999
- -------------------------
(Sergio Vallejo)
/s/ Kenneth A. Rubin Director January 19, 1999
- -------------------------
(Kenneth A. Rubin)
/s/ Frederick B. Simon Director January 19, 1999
- -------------------------
(Frederick B. Simon)
</TABLE>
4
<PAGE> 29
<TABLE>
<S> <C> <C>
/s/ Frank Goveia Director January 19, 1999
- -------------------------
(Frank Goveia)
/s/ Joseph M. Jacobs Director January 19, 1999
- -------------------------
(Joseph M. Jacobs)
/s/ Jay L. Maymudes Director January 19, 1999
- -------------------------
(Jay L. Maymudes)
/s/ Arthur H. Amron Director January 19, 1999
- -------------------------
(Arthur H. Amron)
/s/ Paul M. Jacobi Director January 19, 1999
- -------------------------
(Paul M. Jacobi)
/s/ Douglas J. Lambert Director January 19, 1999
- -------------------------
(Douglas J. Lambert)
</TABLE>
COMPLETE WELLNESS CENTERS, INC.
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 (1) Form of Common Stock Certificate
4.18 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.19 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.20 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.21 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.22 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.23 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.24 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.25 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.26 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.27 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.28 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.29 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.30 Purchase and Sale Agreements for the Common Stock sold in a private
sale to 12 purchasers of the stock previously held by Wexford Spectrum
Investors LLC and Imprimis Investors LLC.
4.35 Common Stock Purchase Warrant dated December 2, 1997 to Chris
Janish for 25,000 shares.
4.36 Common Stock Purchase Warrant dated October 21, 1998 to Chris
Janish for 5,000 shares.
4.37 Common Stock Purchase Warrant dated October 21, 1998 to Structure
Management, Inc. for 120,000 shares.
5.1 Opinion of Epstein Becker & Green, P.C.
23.1 Consent of Ernst & Young, LLP, Independent Accountants.
23.2 Consent of Epstein Becker & Green, P.C. (included in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
5
<PAGE> 30
(1) Incorporated by reference to identically numbered exhibits included in
the Company's Registration Statement on Form SB-2 (File No. 333-18291)
declared effective with the Securities and Exchange Commission on
February 19, 1997.
6
<PAGE> 1
EXHIBIT 4.18
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and S. R. Vallejo FBO Anthony
C. Vallejo ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 1,500 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $3,750 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
-------------------------
S. R. Vallejo FBO
By: Anthony C. Vallejo
----------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.19
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and S. R. Vallejo FBO Christina
A. Vallejo ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 1,500 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $3,750 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
1
<PAGE> 2
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
-------------------------
S. R. Vallejo FBO
Christina A. Vallejo
By:
-------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
-------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.20
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Audrey Dickinson
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 3,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $7,500 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
-------------------------
Audrey Dickinson
By:
-------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.21
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Peter DiPasqua
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 5,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $12,500 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
-------------------------
Peter DiPasqua, Jr.
By:
----------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
---------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.22
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Wexford Spectrum Investors LLC
(the "Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT
06830, Complete Wellness Centers, Inc. (the "Company"), and Jason Elkin
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 20,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $50,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-079504
Wexford Spectrum Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under
the Securities Act of 1933, as amended (the "Securities
Act"), and that there is no existing public market for the
Shares and that there can be no assurance that the
Purchaser will be able to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Wexford Spectrum Investors LLC
By:
------------------------
Jason Elkin
By:
---------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
---------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.23
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Jason Elkin ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 21,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $52,500 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
--------------------------
Jason Elkin
By:
-------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
---------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.24
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Stephen H. Hamic
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 4,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $10,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
------------------------
Stephen H. Hamic
By:
-------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.25
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Jill Brigante, Custodian
for Jacqueline P. Brigante, NJUGMA ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 2,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $5,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
1
<PAGE> 2
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
----------------------------
Jill Brigante, Custodian for
By: Jacqueline P. Brigante, NJUGMA
--------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.26
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Steven T. Moore
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 5,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $12,500 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
--------------------------
Steven T. Moore
By:
---------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.27
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into as of the 24 day of October 1998, by and among Imprimis Investors
LLC (the "Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT
06830, Complete Wellness Centers, Inc. (the "Company"), and Chantel M. Natale
and Robert C. Natale, JTROS ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 5,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $12,500 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
--------------------------
Chantel M. Natale
By:
-------------------------
Frederick Simon,
Senior Vice President By:
---------------------------
Robert C. Natale
COMPANY
Complete Wellness Centers, Inc.
By:
---------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.28
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into as of the 24 day of October 1998, by and among Imprimis Investors
LLC (the "Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT
06830, Complete Wellness Centers, Inc. (the "Company"), and Joseph Raymond
("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 28,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $70,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
--------------------------
Joseph Raymond
By:
--------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.29
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into
as of the 24 day of October 1998, by and among Imprimis Investors LLC (the
"Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT 06830,
Complete Wellness Centers, Inc. (the "Company"), and Theresa Szabo and Karl
Szabo, JTROS ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 2,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $5,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
1
<PAGE> 2
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
---------------------------
Theresa Szabo
By:
------------------------
Frederick Simon,
Senior Vice President By:
---------------------------
Karl Szabo
COMPANY
Complete Wellness Centers, Inc.
By:
--------------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.30
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and
entered into as of the 24 day of October 1998, by and among Imprimis Investors
LLC (the "Seller"), having an address at 411 West Putnam Avenue, Greenwich, CT
06830, Complete Wellness Centers, Inc. (the "Company"), and Jill Brigante,
Custodian for Virginia A. Brigante, NJUGMA ("Purchaser").
R E C I T A L S
A. As of the date hereof, Seller owns 2,000 shares of common stock,
$0.0001665 par value per share (the "Shares") of Complete Wellness Centers, Inc.
("CWC"), which are free and clear of all liens and encumbrances, which shares
are not registered under the Securities Act of 1933, as amended, and are
accordingly restricted as to transfer and contain the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION UNDER THE ACT, UNLESS IN
THE OPINION OF COUNSEL TO THE ISSUER AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
B. The Seller desires to sell the Shares to the Purchaser and the
Purchaser desires to purchase and acquire the Shares from the Seller.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements, representations and warranties contained herein, the
parties hereto agree as follows:
1. Sale and Purchase. The Seller hereby sells, and the Purchaser
hereby purchases from the Seller the Shares at the purchase price
of $2.50 per share. In consideration for the sale of the Shares
Purchaser shall wire transfer the purchase price of $5,000 to:
Chase Manhattan
ABA 021 000 021
Account # 323-069932
Imprimis Investors LLC
against delivery by the Seller to the Purchaser the stock certificates, endorsed
in blank, evidencing that respective number of Shares being sold. Except as
provided herein, Seller makes no representations or warranties about the Shares.
1
<PAGE> 2
2. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants that:
i. The Purchaser understands that the Shares
have not been registered under the Securities
Act of 1933, as amended (the "Securities
Act"), and that there is no existing public
market for the Shares and that there can be
no assurance that the Purchaser will be able
to sell or dispose of the Shares.
ii. The Purchaser is an "accredited investor" (as
defined in Rule 501 of Regulation D under the
Securities Act) purchasing for his own
account and is acquiring the Shares for
investment purposes and not with a view to,
or for offer or sale in connection with, any
distribution in violation of the Securities
Act and he has such knowledge and experience
in financial and business matters as to be
capable of evaluating the merits and risks of
his investment in the Shares, including a
complete loss of his investment, or the
Purchaser has been advised by a
representative possessing such knowledge and
experience.
iii. The Purchaser has had the opportunity to ask
questions of and receive answers from the
Seller concerning the Shares and other
related matters. The Purchaser further
acknowledges that the Seller has made
available to the Purchaser or his
representatives all Documents and information
relating to an investment in the Shares
requesting by or on behalf of the Purchaser.
3. Representations and Warranties of the Company. The Company represents
and warrants that:
i. The Company has received an opinion of
counsel that an exemption from registration
for the Shares is available.
ii. The Purchaser has received all material
information about the Company that has been
furnished to the Seller, including, without
limitation, the Consolidation Cash Flow
Forecast annexed as Annex A to this
Agreement, which the Company hereby
represents and warrants to be complete and
accurate in all respects.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
2
<PAGE> 3
SELLER PURCHASER
Imprimis Investors LLC By:
----------------------------
Jill Brigante, Custodian for
By: Virginia A. Brigante, NJUGMA
-------------------------
Frederick Simon,
Senior Vice President
COMPANY
Complete Wellness Centers, Inc.
By:
---------------------
E. Eugene Sharer,
Vice Chairman
3
<PAGE> 1
EXHIBIT 4.35
December 2, 1997
COMPLETE WELLNESS CENTERS, INC.
COMMON STOCK PURCHASE WARRANT
In consideration of good and valuable consideration, the receipt of which
is hereby acknowledged by COMPLETE WELLNESS CENTERS, INC. (the "Company"), Chris
Janish, 40 Broad Street, Suite 2100, New York, NY 10004 (the "Holder") is hereby
granted the right to purchase at any time from the date hereof until 5:00 P.M.,
Eastern time, on December 1, 2002 (the "Expiration Date"), Twenty Five Thousand
(25,000) fully paid and non-assessable shares of the Company's Common Stock, par
value $0.0001665 per share (the "Common Stock").
This Warrant is exercisable at the Exercise Price (as hereinafter
defined) per share of Common Stock issuable hereunder, payable in cash or by
certified or official bank check, or at Holder's option by means of tendering
this Warrant Certificate to the Company in a cashless transaction to receive the
number of shares of Common Stock equal in Market Value, as hereinafter defined,
to the difference between the Market Value of the Shares of Common Stock
issuable upon exercise of this Warrant and the total Exercise Price thereof.
Upon surrender of this Warrant with the annexed Subscription Form duly executed,
together with payment of the Exercise Price for the shares of Common Stock
purchased, at the Company's principal executive offices presently located at
Suite 200, 666 Eleventh Street, NW, Washington, DC 20001, the registered Holder
of this Warrant shall be entitled to receive a certificate or certificates for
the shares of Common Stock so purchased.
1. Exercise of Warrant. The purchase rights represented by
this Warrant are exercisable at the option of the holder hereof, in whole or in
part (but not as to fractional shares of Common Stock), during the period in
which this Warrant may be exercised as set forth above. In the case of the
purchase of less than all the shares of Common Stock purchasable under this
Warrant, the Company shall cancel this Warrant upon the surrender hereof and
shall execute and deliver a new Warrant of like tenor for the balance of the
shares of Common Stock purchasable hereunder.
2. Issuance of Stock Certificate. The issuance of certificates
for shares of Common Stock upon the exercise of this Warrant shall be made
without charge to the holder hereof including, without limitation, any tax that
may be payable in respect thereof, and such certificates shall (subject to the
provisions of Section 3 hereof) be issued in the name of, or in such names as
may be directed by, the holder hereof; provided, however, that the Company shall
not be required to pay any income tax to which the holder hereof may be subject
in connection with the issuance of this Warrant or of shares of Common Stock
upon the exercise of this Warrant; and provided further, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name other
than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
3. Restrictions on Transfer.
3.1 Restrictions on Transfer. The holder of this Warrant, by
acceptance hereof, agrees that, absent an effective registration statement under
the Securities Act of 1933, as amended (the "Act"), covering the disposition of
the Warrant or Common Stock issued or issuable upon exercise hereof (the
"Warrant Shares"), such holder will not sell or transfer any or all of such
Warrant or Warrant Shares, as the
<PAGE> 2
case may be, without first providing the Company with an opinion of counsel
(which may be counsel for the Company) to the effect that such sale or transfer
will be exempt from the registration and prospectus delivery requirements of the
Act. Such holder consents to the Company making a notation on its records giving
instructions to any transfer agent of the Warrant or Warrant Shares in order to
implement such restrictions on transferability.
3.2 Transfer Restrictions Legend. Each certificate representing
Warrant Shares, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear a legend in substantially the following
form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION
UNDER THE ACT, UNLESS IN THE OPINION OF COUNSEL TO THE ISSUER AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a distribution under a registration statement covering the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such holder without violation of the registration requirements
of the Act.
4. Exercise Price and Redemption.
4.1 Initial and Adjusted Exercise Price. The initial exercise
price shall be $2.00 per share of Common Stock. The adjusted exercise price
shall be the price that shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 6 hereof.
4.2 Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price depending upon the
context.
4.3 Market Value. The term "Market Value" herein shall be an
amount equal to the average closing "bid" price of a share of the Company's
publicly traded Common Stock for the five (5) trading days preceding the
Company's receipt of the Notice of Exercise form duly executed multiplied by the
number of shares of Common Stock to be issued upon surrender of this Warrant
Certificate.
5. Adjustments of Exercise Price and Number of Shares.
5.1 Computation of Adjusted Exercise Price. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 5.5 hereof, the issuance or sale of any shares of
Common Stock resulting from the exercise or conversion of any of the Company's
securities outstanding as of the date hereof or any other securities sold on the
date hereof), including shares held in the Company's treasury, for a
consideration per share less than the Exercise Price in effect immediately prior
to the issuance or sale of such shares, or without consideration, then forthwith
upon such issuance or sale the Exercise Price shall (until another such issuance
or sale) be reduced to a price (calculated to the nearest full cent) determined
by dividing (A) an amount equal to the sum of (X) the total number of shares of
Common Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately prior to such issuance or sale, multiplied
by the Exercise Price in effect immediately prior to such issuance or sale, plus
2
<PAGE> 3
(Y) the aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, by (B) the total number of shares of Common
Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately after such issuance or sale; provided,
however, that in no event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock provided for in Section 5.3 hereof.
For the purposes of any adjustment to be made in accordance with this
Section 5.1, the following provisions shall be applicable:
(a) In case of the issuance or sale of shares of Common Stock
(or of other securities deemed hereunder to involve the issuance or sale of
shares of Common Stock) for a consideration part or all of which shall be cash,
the amount of the cash portion of the consideration therefor deemed to have been
received by the Company shall be (i) the subscription price, if shares of Common
Stock are offered by the Company for subscription, or (ii) the public offering
price (after deducting therefrom any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, but before deducting any other expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the net amount of
cash actually received by the Company for such securities, in any other case.
(b) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company, and otherwise than
on the exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company on the basis of a record
of values of similar property or services.
(c) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution.
(d) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (b) of this Section 5.1.
(e) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
5.2 Subdivision and Combination of Common Stock. In case the
Company shall at any time subdivide (by any stock split, stock dividend or
otherwise) or combine (by any reverse stock split or otherwise) the outstanding
shares of Common Stock, the Exercise Price shall forthwith be proportionately
3
<PAGE> 4
decreased in the case of subdivision or increased in the case of combination.
5.3 Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 5, the aggregate
number of shares of Common Stock issuable upon the exercise of this Warrant (and
of all the Warrants) shall be obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of shares of Common
Stock issuable upon exercise of this Warrant (and of all the Warrants)
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
5.4 Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change from no par value to par value or vice versa or a change in par
value, or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company with or into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock except a change as a result
of a subdivision or combination of such shares or a change in par value as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company substantially as an entirety, the holder of this Warrant
shall thereafter (but only until the Expiration Date) have the right to purchase
the kind and number of shares of stock and/or other securities or property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance in respect of the number of shares issuable under this Warrant
immediately prior to the time of determination of stockholders of the Company
entitled to receive such shares of stock and/or other securities or property, at
a purchase price equal to the product of (x) the number of shares issuable under
this Warrant immediately prior to such determination, times (y) the Exercise
Price in effect immediately prior to such determination, as if such holder had
exercised this Warrant immediately prior to such determination. The Company
shall be obligated to retain and set aside, or otherwise make fair provision for
exercise of the right of the holder hereof to receive, the shares of stock
and/or other securities or property provided for in this Section 5.4.
5.5 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of this Warrant or of any Warrant
Shares;
(b) Upon the issuance or sale of shares of Common Stock upon
the exercise of options, rights or warrants, or upon the conversion or exchange
of convertible or exchangeable securities, in any case (i) where the purchase
price was adjusted at the time of issuance of such options, rights or warrants,
or convertible or exchangeable securities, as contemplated by Section 5.2 hereof
or (ii) where such options, rights, warrants or convertible or exchangeable
securities were outstanding prior to the date hereof;
(c) Upon the issuance or sale of shares of Common Stock
resulting from the exercise or conversion of any of the Company's securities
outstanding as of the date hereof or of any agreements or contract rights to
purchase shares outstanding as of the date hereof; or
(d) If the amount of said adjustment shall be less than one
cent ($.01) per share, provided, however, that in such case any adjustment that
would otherwise be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent adjustment that,
together with any adjustment so carried forward, shall amount to at least one 1
cent ($.01) per share.
4
<PAGE> 5
6. Exchange and Replacement of Warrant. This Warrant is
exchangeable without expense, upon the surrender hereof by the registered holder
at the principal executive office of the Company, for a new Warrant or Warrants
of like tenor and date representing in the aggregate the right to purchase the
same number of shares as are purchasable hereunder in such denominations as
shall be designated by the registered holder hereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
7. Elimination of Fractional Interests. The Company shall not
be required upon the exercise of this Warrant to issue stock certificates
representing fractions of shares of Common Stock, but shall instead pay in cash,
in lieu of any fractional share of Common Stock to which such holder would be
entitled if such fractional share were issuable, in an amount equal to the fair
market value of a share of Common Stock as of the date of such exercise.
8. Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall be issuable upon the exercise hereof. The
Company covenants and agrees that, upon exercise of this Warrant and payment of
the Exercise Price therefor, all shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid and nonassessable.
9. Notices to Holders. Nothing contained in this warrant shall
be construed as conferring upon the holder hereof the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter/ or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of this warrant and prior to its exercise, any of the
following events shall occur:
(a) The Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to
receive a dividend or distribution in cash or otherwise;
(b) The Company shall offer to the holders of its Common Stock any
additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of
the Company, or any right to subscribe for or purchase the same;
(c) A dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and
business as an entirety shall be proposed to be voted upon by the
stockholders of the Company; or
(d) A merger or consolidation of the Company with or into any
other company shall be proposed to be voted upon by the
stockholders of the Company;
then, in any one or more of said events, the Company shall give written notice
of such event to the holder of this warrant at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
additional
5
<PAGE> 6
shares, convertible or exchangeable securities or subscription or purchase
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up, sale, merger or consolidation. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend or
distribution, or the issuance of any shares of capital stock or convertible or
exchangeable securities or subscription or purchase rights, or any proposed
dissolution, liquidation, winding up, sale, merger or consolidation.
10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(a) If to the registered holder of this Warrant, to the address
of such holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth on the first page
of this Warrant;
or at such other address as the registered holder or the Company may hereafter
have advised the other.
11. Successors. All the covenants, agreements, representations
and warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
12. Headings. The Section headings in this Warrant have been
inserted for purposes of convenience only and shall have no substantive effect.
13. Law Governing. This Warrant is delivered in the State of
Delaware and shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware regardless of the jurisdiction of creation
or domicile of the Company or its successors or of the holder at any time
hereof.
WITNESS the signature of the duly authorized officer of the Company.
COMPLETE WELLNESS CENTERS, INC.
By:
--------------------------
Title:
-----------------------
6
<PAGE> 7
SUBSCRIPTION FORM
(To Be Executed By The Registered Holder
In Order To Exercise The Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase __________shares of Common Stock of COMPLETE WELLNESS CENTERS, INC.
covered by this Warrant according to the conditions hereof and herewith makes
payment of the Exercise Price of such shares in full.
--------------------------
Signature
--------------------------
--------------------------
Address
Dated: __________.
7
<PAGE> 1
EXHIBIT 4.36
October 21, 1998
COMPLETE WELLNESS CENTERS, INC.
COMMON STOCK PURCHASE WARRANT
In consideration of good and valuable consideration, the receipt of which
is hereby acknowledged by COMPLETE WELLNESS CENTERS, INC. (the "Company"), Chris
Janish, 40 Broad Street, Suite 2100, New York, NY 10004 (the "Holder") is hereby
granted the right to purchase fully paid and non-assessable shares of the
Company's Common Stock, par value $0.0001665 per share (the "Common Stock") in
an amount of Five Thousand (5,000) Shares at any time from the date above until
5:00 P.M., Eastern time, on October 20, 2003 (the "Expiration Date").
This Warrant is exercisable at the Exercise Price (as hereinafter
defined) per share of Common Stock issuable hereunder, payable in cash or by
certified or official bank check, or at Holder's option by means of tendering
this Warrant Certificate to the Company. Upon surrender of this Warrant with the
annexed Subscription Form duly executed, together with payment of the Exercise
Price for the shares of Common Stock purchased, at the Company's principal
executive offices presently located at Suite 200, 666 Eleventh Street, NW,
Washington, DC 20001, the registered Holder of this Warrant shall be entitled to
receive a certificate or certificates for the shares of Common Stock so
purchased.
1. Exercise of Warrant. The purchase rights represented by
this Warrant are exercisable at the option of the holder hereof, in whole or in
part (but not as to fractional shares of Common Stock), during the period in
which this Warrant may be exercised as set forth above. In the case of the
purchase of less than all the shares of Common Stock purchasable under this
Warrant, the Company shall cancel this Warrant upon the surrender hereof and
shall execute and deliver a new Warrant of like tenor for the balance of the
shares of Common Stock purchasable hereunder.
2. Issuance of Stock Certificate. The issuance of certificates
for shares of Common Stock upon the exercise of this Warrant shall be made
without charge to the holder hereof including, without limitation, any tax that
may be payable in respect thereof, and such certificates shall (subject to the
provisions of Section 3 hereof) be issued in the name of, or in such names as
may be directed by, the holder hereof; provided, however, that the Company shall
not be required to pay any income tax to which the holder hereof may be subject
in connection with the issuance of this Warrant or of shares of Common Stock
upon the exercise of this Warrant; and provided further, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name other
than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
3. Restrictions on Transfer.
3.1 Restrictions on Transfer. The holder of this Warrant, by
acceptance hereof, agrees that, absent an effective registration statement under
the Securities Act of 1933, as amended (the "Act"), covering the disposition of
the Warrant or Common Stock issued or issuable upon exercise hereof (the
"Warrant Shares"), such holder will not sell or transfer any or all of such
Warrant or Warrant Shares, as the case may be, without first providing the
Company with an opinion of counsel (which may be counsel for the Company) to the
effect that such sale or transfer will be exempt from the registration and
prospectus delivery requirements of the Act. Such holder consents to the Company
making a notation on its records
<PAGE> 2
giving instructions to any transfer agent of the Warrant or Warrant Shares in
order to implement such restrictions on transferability.
3.2 Transfer Restrictions Legend. Each certificate representing
Warrant Shares, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear a legend in substantially the following
form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION
UNDER THE ACT, UNLESS IN THE OPINION OF COUNSEL TO THE ISSUER AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a distribution under a registration statement covering the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such holder without violation of the registration requirements
of the Act.
4. Exercise Price and Redemption.
4.1 Initial and Adjusted Exercise Price. The initial exercise
price shall be $2.00 per share of Common Stock. The adjusted exercise price
shall be the price that shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 6 hereof.
4.2 Exercise Price The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price depending upon the
context.
4.3 Market Value. The term "Market Value" herein shall be an
amount equal to the average closing "bid" price of a share of the Company's
publicly traded Common Stock for the five (5) trading days preceding the
Company's receipt of the Notice of Exercise form duly executed multiplied by the
number of shares of Common Stock to be issued upon surrender of this Warrant
Certificate.
5. Adjustments of Exercise Price and Number of Shares.
5.1 Computation of Adjusted Exercise Price. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 5.5 hereof, the issuance or sale of any shares of
Common Stock resulting from the exercise or conversion of any of the Company's
securities outstanding as of the date hereof or any other securities sold on the
date hereof), including shares held in the Company's treasury, for a
consideration per share less than the Exercise Price in effect immediately prior
to the issuance or sale of such shares, or without consideration, then forthwith
upon such issuance or sale the Exercise Price shall (until another such issuance
or sale) be reduced to a price (calculated to the nearest full cent) determined
by dividing (A) an amount equal to the sum of (X) the total number of shares of
Common Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately prior to such issuance or sale, multiplied
by the Exercise Price in effect immediately prior to such issuance or sale, plus
(Y) the aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, by (B) the total number of shares of Common
Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately after such issuance or sale; provided,
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<PAGE> 3
however, that in no event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock provided for in Section 5.3 hereof.
For the purposes of any adjustment to be made in accordance with this
Section 5.1, the following provisions shall be applicable:
(a) In case of the issuance or sale of shares of Common Stock
(or of other securities deemed hereunder to involve the issuance or sale of
shares of Common Stock) for a consideration part or all of which shall be cash,
the amount of the cash portion of the consideration therefor deemed to have been
received by the Company shall be (i) the subscription price, if shares of Common
Stock are offered by the Company for subscription, or (ii) the public offering
price (after deducting therefrom any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, but before deducting any other expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the net amount of
cash actually received by the Company for such securities, in any other case.
(b) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company, and otherwise than
on the exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company on the basis of a record
of values of similar property or services.
(c) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution.
(d) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (b) of this Section 5.1.
(e) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
5.2 Subdivision and Combination of Common Stock. In case the
Company shall at any time subdivide (by any stock split, stock dividend or
otherwise) or combine (by any reverse stock split or otherwise) the outstanding
shares of Common Stock, the Exercise Price shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of combination.
5.3 Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to
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the provisions of this Section 5, the aggregate number of shares of Common Stock
issuable upon the exercise of this Warrant (and of all the Warrants) shall be
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant (and of all the Warrants) immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
5.4 Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change from no par value to par value or vice versa or a change in par
value, or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company with or into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock except a change as a result
of a subdivision or combination of such shares or a change in par value as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company substantially as an entirety, the holder of this Warrant
shall thereafter (but only until the Expiration Date) have the right to purchase
the kind and number of shares of stock and/or other securities or property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance in respect of the number of shares issuable under this Warrant
immediately prior to the time of determination of stockholders of the Company
entitled to receive such shares of stock and/or other securities or property, at
a purchase price equal to the product of (x) the number of shares issuable under
this Warrant immediately prior to such determination, times (y) the Exercise
Price in effect immediately prior to such determination, as if such holder had
exercised this Warrant immediately prior to such determination. The Company
shall be obligated to retain and set aside, or otherwise make fair provision for
exercise of the right of the holder hereof to receive, the shares of stock
and/or other securities or property provided for in this Section 5.4.
5.5 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of this Warrant or of any Warrant
Shares;
(b) Upon the issuance or sale of shares of Common Stock upon
the exercise of options, rights or warrants, or upon the conversion or exchange
of convertible or exchangeable securities, in any case (i) where the purchase
price was adjusted at the time of issuance of such options, rights or warrants,
or convertible or exchangeable securities, as contemplated by Section 5.2 hereof
or (ii) where such options, rights, warrants or convertible or exchangeable
securities were outstanding prior to the date hereof;
(c) Upon the issuance or sale of shares of Common Stock
resulting from the exercise or conversion of any of the Company's securities
outstanding as of the date hereof or of any agreements or contract rights to
purchase shares outstanding as of the date hereof; or
(d) If the amount of said adjustment shall be less than one
cent ($.01) per share, provided, however, that in such case any adjustment that
would otherwise be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent adjustment that,
together with any adjustment so carried forward, shall amount to at least one 1
cent ($.01) per share.
6. Exchange and Replacement of Warrant. This Warrant is
exchangeable without expense, upon the surrender hereof by the registered holder
at the principal executive office of the Company, for a new Warrant or Warrants
of like tenor and date representing in the aggregate the right to purchase the
same
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number of shares as are purchasable hereunder in such denominations as shall be
designated by the registered holder hereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
7. Elimination of Fractional Interests. The Company shall not
be required upon the exercise of this Warrant to issue stock certificates
representing fractions of shares of Common Stock, but shall instead pay in cash,
in lieu of any fractional share of Common Stock to which such holder would be
entitled if such fractional share were issuable, in an amount equal to the fair
market value of a share of Common Stock as of the date of such exercise.
8. Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall be issuable upon the exercise hereof. The
Company covenants and agrees that, upon exercise of this Warrant and payment of
the Exercise Price therefor, all shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid and nonassessable.
9. Notices to Holders. Nothing contained in this warrant shall
be construed as conferring upon the holder hereof the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter/ or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of this warrant and prior to its exercise, any of the
following events shall occur:
(a) The Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution in cash or otherwise;
(b) The Company shall offer to the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any right to
subscribe for or purchase the same;
(c) A dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed to be voted upon by the stockholders of the Company; or
(d) A merger or consolidation of the Company with or into any
other company shall be proposed to be voted upon by the stockholders of the
Company;
then, in any one or more of said events, the Company shall give written notice
of such event to the holder of this warrant at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
additional shares, convertible or exchangeable securities or subscription or
purchase rights, or entitled to vote on such proposed dissolution, liquidation,
winding up, sale, merger or consolidation. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
give such notice or any
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<PAGE> 6
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any shares of capital stock or convertible or exchangeable
securities or subscription or purchase rights, or any proposed dissolution,
liquidation, winding up, sale, merger or consolidation.
10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(a) If to the registered holder of this Warrant, to the address
of such holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth on the first
page of this Warrant;
or at such other address as the registered holder or the Company may hereafter
have advised the other.
11. Successors. All the covenants, agreements, representations
and warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
12. Headings. The Section headings in this Warrant have been
inserted for purposes of convenience only and shall have no substantive effect.
13. Law Governing. This Warrant is delivered in the State of
Delaware and shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware regardless of the jurisdiction of creation
or domicile of the Company or its successors or of the holder at any time
hereof.
WITNESS the signature of the duly authorized officer of the Company.
COMPLETE WELLNESS CENTERS, INC.
By:
--------------------------
Title:
-----------------------
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SUBSCRIPTION FORM
(To Be Executed By The Registered Holder
In Order To Exercise The Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase __________shares of Common Stock of COMPLETE WELLNESS CENTERS, INC.
covered by this Warrant according to the conditions hereof and herewith makes
payment of the Exercise Price of such shares in full.
--------------------------
Signature
--------------------------
--------------------------
Address
Dated: __________.
7
<PAGE> 1
EXHIBIT 4.37
October 21, 1998
COMPLETE WELLNESS CENTERS, INC.
COMMON STOCK PURCHASE WARRANT
In consideration of good and valuable consideration, the receipt of which
is hereby acknowledged by COMPLETE WELLNESS CENTERS, INC. (the "Company"),
Structure Management, Inc., 500 Craig Road, Manalapan, NJ 07726 (the "Holder")
is hereby granted the right to purchase fully paid and non-assessable shares of
the Company's Common Stock, par value $0.0001665 per share (the "Common Stock")
in an amount of One Hundred Twenty Thousand (120,000) Shares at any time from
the date above until 5:00 P.M., Eastern time, on October 20, 2003 (the
"Expiration Date").
This Warrant is exercisable at the Exercise Price (as hereinafter
defined) per share of Common Stock issuable hereunder, payable in cash or by
certified or official bank check, or at Holder's option by means of tendering
this Warrant Certificate to the Company. Upon surrender of this Warrant with the
annexed Subscription Form duly executed, together with payment of the Exercise
Price for the shares of Common Stock purchased, at the Company's principal
executive offices presently located at Suite 200, 666 Eleventh Street, NW,
Washington, DC 20001, the registered Holder of this Warrant shall be entitled to
receive a certificate or certificates for the shares of Common Stock so
purchased.
1. Exercise of Warrant. The purchase rights represented by
this Warrant are exercisable at the option of the holder hereof, in whole or in
part (but not as to fractional shares of Common Stock), during the period in
which this Warrant may be exercised as set forth above. In the case of the
purchase of less than all the shares of Common Stock purchasable under this
Warrant, the Company shall cancel this Warrant upon the surrender hereof and
shall execute and deliver a new Warrant of like tenor for the balance of the
shares of Common Stock purchasable hereunder.
2. Issuance of Stock Certificate. The issuance of certificates
for shares of Common Stock upon the exercise of this Warrant shall be made
without charge to the holder hereof including, without limitation, any tax that
may be payable in respect thereof, and such certificates shall (subject to the
provisions of Section 3 hereof) be issued in the name of, or in such names as
may be directed by, the holder hereof; provided, however, that the Company shall
not be required to pay any income tax to which the holder hereof may be subject
in connection with the issuance of this Warrant or of shares of Common Stock
upon the exercise of this Warrant; and provided further, that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate in a name other
than that of the holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
3. Restrictions on Transfer.
3.1 Restrictions on Transfer. The holder of this Warrant, by
acceptance hereof, agrees that, absent an effective registration statement under
the Securities Act of 1933, as amended (the "Act"), covering the disposition of
the Warrant or Common Stock issued or issuable upon exercise hereof (the
"Warrant Shares"), such holder will not sell or transfer any or all of such
Warrant or Warrant Shares, as the case may be, without first providing the
Company with an opinion of counsel (which may be counsel for the Company) to the
effect that such sale or transfer will be exempt from the registration and
prospectus delivery requirements of the Act. Such holder consents to the Company
making a notation on its records
<PAGE> 2
giving instructions to any transfer agent of the Warrant or Warrant Shares in
order to implement such restrictions on transferability.
3.2 Transfer Restrictions Legend. Each certificate representing
Warrant Shares, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear a legend in substantially the following
form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED OR RESOLD WITHOUT REGISTRATION
UNDER THE ACT, UNLESS IN THE OPINION OF COUNSEL TO THE ISSUER AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a distribution under a registration statement covering the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel to the Company, the securities represented thereby may be transferred as
contemplated by such holder without violation of the registration requirements
of the Act.
4. Exercise Price and Redemption.
4.1 Initial and Adjusted Exercise Price. The initial exercise
price shall be $2.00 per share of Common Stock. The adjusted exercise price
shall be the price that shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 6 hereof.
4.2 Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price depending upon the
context.
4.3 Market Value. The term "Market Value" herein shall be an
amount equal to the average closing "bid" price of a share of the Company's
publicly traded Common Stock for the five (5) trading days preceding the
Company's receipt of the Notice of Exercise form duly executed multiplied by the
number of shares of Common Stock to be issued upon surrender of this Warrant
Certificate.
5. Adjustments of Exercise Price and Number of Shares.
5.1 Computation of Adjusted Exercise Price. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 5.5 hereof, the issuance or sale of any shares of
Common Stock resulting from the exercise or conversion of any of the Company's
securities outstanding as of the date hereof or any other securities sold on the
date hereof), including shares held in the Company's treasury, for a
consideration per share less than the Exercise Price in effect immediately prior
to the issuance or sale of such shares, or without consideration, then forthwith
upon such issuance or sale the Exercise Price shall (until another such issuance
or sale) be reduced to a price (calculated to the nearest full cent) determined
by dividing (A) an amount equal to the sum of (X) the total number of shares of
Common Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately prior to such issuance or sale, multiplied
by the Exercise Price in effect immediately prior to such issuance or sale, plus
(Y) the aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, by (B) the total number of shares of Common
Stock outstanding (including shares deemed to be outstanding pursuant to
subparagraph (e) below) immediately after such issuance or sale; provided,
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<PAGE> 3
however, that in no event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock provided for in Section 5.3 hereof.
For the purposes of any adjustment to be made in accordance with this
Section 5.1, the following provisions shall be applicable:
(a) In case of the issuance or sale of shares of Common Stock
(or of other securities deemed hereunder to involve the issuance or sale of
shares of Common Stock) for a consideration part or all of which shall be cash,
the amount of the cash portion of the consideration therefor deemed to have been
received by the Company shall be (i) the subscription price, if shares of Common
Stock are offered by the Company for subscription, or (ii) the public offering
price (after deducting therefrom any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, but before deducting any other expenses incurred in
connection therewith), if such securities are sold to underwriters or dealers
for public offering without a subscription offering, or (iii) the net amount of
cash actually received by the Company for such securities, in any other case.
(b) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company, and otherwise than
on the exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company on the basis of a record
of values of similar property or services.
(c) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution.
(d) The reclassification of securities of the Company other
than shares of Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (b) of this Section 5.1.
(e) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
5.2 Subdivision and Combination of Common Stock. In case the
Company shall at any time subdivide (by any stock split, stock dividend or
otherwise) or combine (by any reverse stock split or otherwise) the outstanding
shares of Common Stock, the Exercise Price shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of combination.
5.3 Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to
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<PAGE> 4
the provisions of this Section 5, the aggregate number of shares of Common Stock
issuable upon the exercise of this Warrant (and of all the Warrants) shall be
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant (and of all the Warrants) immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
5.4 Reclassification, Consolidation, Merger, etc. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change from no par value to par value or vice versa or a change in par
value, or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company with or into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock except a change as a result
of a subdivision or combination of such shares or a change in par value as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company substantially as an entirety, the holder of this Warrant
shall thereafter (but only until the Expiration Date) have the right to purchase
the kind and number of shares of stock and/or other securities or property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance in respect of the number of shares issuable under this Warrant
immediately prior to the time of determination of stockholders of the Company
entitled to receive such shares of stock and/or other securities or property, at
a purchase price equal to the product of (x) the number of shares issuable under
this Warrant immediately prior to such determination, times (y) the Exercise
Price in effect immediately prior to such determination, as if such holder had
exercised this Warrant immediately prior to such determination. The Company
shall be obligated to retain and set aside, or otherwise make fair provision for
exercise of the right of the holder hereof to receive, the shares of stock
and/or other securities or property provided for in this Section 5.4.
5.5 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of this Warrant or of any Warrant
Shares;
(b) Upon the issuance or sale of shares of Common Stock upon
the exercise of options, rights or warrants, or upon the conversion or exchange
of convertible or exchangeable securities, in any case (i) where the purchase
price was adjusted at the time of issuance of such options, rights or warrants,
or convertible or exchangeable securities, as contemplated by Section 5.2 hereof
or (ii) where such options, rights, warrants or convertible or exchangeable
securities were outstanding prior to the date hereof;
(c) Upon the issuance or sale of shares of Common Stock
resulting from the exercise or conversion of any of the Company's securities
outstanding as of the date hereof or of any agreements or contract rights to
purchase shares outstanding as of the date hereof; or
(d) If the amount of said adjustment shall be less than one
cent ($.01) per share, provided, however, that in such case any adjustment that
would otherwise be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent adjustment that,
together with any adjustment so carried forward, shall amount to at least one 1
cent ($.01) per share.
6. Exchange and Replacement of Warrant. This Warrant is
exchangeable without expense, upon the surrender hereof by the registered holder
at the principal executive office of the Company, for a new Warrant or Warrants
of like tenor and date representing in the aggregate the right to purchase the
same
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<PAGE> 5
number of shares as are purchasable hereunder in such denominations as shall be
designated by the registered holder hereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu of this Warrant.
7. Elimination of Fractional Interests. The Company shall not
be required upon the exercise of this Warrant to issue stock certificates
representing fractions of shares of Common Stock, but shall instead pay in cash,
in lieu of any fractional share of Common Stock to which such holder would be
entitled if such fractional share were issuable, in an amount equal to the fair
market value of a share of Common Stock as of the date of such exercise.
8. Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares of Common Stock as shall be issuable upon the exercise hereof. The
Company covenants and agrees that, upon exercise of this Warrant and payment of
the Exercise Price therefor, all shares of Common Stock issuable upon such
exercise shall be duly and validly issued, fully paid and nonassessable.
9. Notices to Holders. Nothing contained in this warrant shall
be construed as conferring upon the holder hereof the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter/ or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of this warrant and prior to its exercise, any of the
following events shall occur:
(a) The Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution in cash or otherwise;
(b) The Company shall offer to the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any right to
subscribe for or purchase the same;
(c) A dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed to be voted upon by the stockholders of the Company; or
(d) A merger or consolidation of the Company with or into any
other company shall be proposed to be voted upon by the stockholders of the
Company;
then, in any one or more of said events, the Company shall give written notice
of such event to the holder of this warrant at least fifteen (15) days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
additional shares, convertible or exchangeable securities or subscription or
purchase rights, or entitled to vote on such proposed dissolution, liquidation,
winding up, sale, merger or consolidation. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. Failure to
give such notice or any
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defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any shares of capital stock or convertible or exchangeable
securities or subscription or purchase rights, or any proposed dissolution,
liquidation, winding up, sale, merger or consolidation.
10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(a) If to the registered holder of this Warrant, to the address
of such holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth on the first
page of this Warrant;
or at such other address as the registered holder or the Company may hereafter
have advised the other.
11. Successors. All the covenants, agreements, representations
and warranties contained in this Warrant shall bind the parties hereto and their
respective heirs, executors, administrators, distributees, successors and
assigns.
12. Headings. The Section headings in this Warrant have been
inserted for purposes of convenience only and shall have no substantive effect.
13. Law Governing. This Warrant is delivered in the State of
Delaware and shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware regardless of the jurisdiction of creation
or domicile of the Company or its successors or of the holder at any time
hereof.
WITNESS the signature of the duly authorized officer of the Company.
COMPLETE WELLNESS CENTERS, INC.
By:
--------------------------
Title:
-----------------------
6
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SUBSCRIPTION FORM
(To Be Executed By The Registered Holder
In Order To Exercise The Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase __________shares of Common Stock of COMPLETE WELLNESS CENTERS, INC.
covered by this Warrant according to the conditions hereof and herewith makes
payment of the Exercise Price of such shares in full.
--------------------------
Signature
--------------------------
--------------------------
Address
Dated: __________.
7
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EXHIBIT 5.1
January 19, 1999
Complete Wellness Centers, Inc.
666 Eleventh Street, N.W.
Washington, D.C. 20001
Ladies and Gentlemen:
We have acted as counsel to Complete Wellness Centers, Inc.(the
"Company"), a Delaware corporation, in connection with its registration of
250,000 shares of Common Stock (the "Common Stock") and as described in the
Company's Registration Statement on Form S-3, filed with the Securities and
Exchange Commission under the Securities Act of 1933. The Common Stock consists
of shares that may be offered by certain stockholders of the Company or by
pledgees, donees, transferees or other successors in interest that receive such
shares as a gift, partnership distribution or other non-sale related transfer
(the "Resale Shares").
We are familiar with the corporate proceedings taken by the Company in
connection with the issuance and sale of the Resale Shares. It is our opinion
that the Resale Shares have been duly authorized and are validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which is part of the registration Statement.
Very truly yours,
EPSTEIN BECKER & GREEN, P.C.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3/A) and related Prospectus of Complete Wellness
Centers, Inc. for the registration of 483,820 shares of its common stock and to
the incorporation by reference therein of our report dated March 31, 1998, with
respect to the consolidated financial statements of Complete Wellness Centers,
Inc. included in its Annual Report (as amended on Form 10-KSB/A) for the year
ended December 31, 1997 filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG, LLP
Washington, DC
January 19, 1999
