<PAGE>
Filed Pursuant to Rule 424(b)(3)
This Prospectus Relates to Registration Statement No. 333-3797
which was ordered effective under the Securities
Act on June 3, 1996
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the laws of any such state.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Nobel Education Dynamics, Inc.
408,692 Shares of Common Stock
____________________
This Prospectus relates to up to 408,692 shares ("Shares") of common
stock, par value $.001 per share ("Common Stock") of Nobel Education Dynamics,
Inc., a Delaware corporation (the "Company"), which may be offered from time to
time by the selling stockholders named herein (the "Selling Stockholders").
Each of the Selling Stockholders has advised the Company that such
Selling Stockholder expects to offer Shares owned by such Selling Stockholder
through brokers and dealers to be selected by such Selling Stockholder from time
to time. Each Selling Stockholder has agreed that all sales of Shares will be
effected only in "brokers' transactions" or in transactions directly with a
"market maker," as defined in paragraphs (f) and (g) of Rule 144 under the
Securities Act of 1933, as amended (collectively, "Brokers' Transactions"). Such
brokers and dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
Shares for whom such brokers or dealers may act as agent or to whom they sell as
principal, or both. Each Selling Stockholder may also transfer Shares owned by
gift and upon any such transfer the donee would have the same rights of sale as
such Selling Stockholder under this Prospectus. The Selling Stockholders and any
brokers and dealers through whom sales of the Shares are made may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended,
and the commissions or discounts and other compensation paid to such persons,
and any profit on the resale of Shares as principal, may be regarded as
underwriters' compensation.
The Shares are traded on The Nasdaq SmallCap Market. The average of the
high and low prices of the Shares as reported on The Nasdaq SmallCap Market on
May 31, 1996 was $17 1/8 per share.
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear
substantially all expenses (other than underwriting discounts and commissions or
brokerage commissions and a portion of the expenses relating to the
qualification of the Shares under state securities laws) incurred in connection
with registrations, filings or qualifications of the Shares being offered by the
Selling Stockholders.
Certain other stockholders of the Company who beneficially own an aggregate
of 600,000 shares of Common Stock (all of which shares are issuable upon
conversion of the Company's Series D Preferred Stock or exercise of warrants or
options) may offer from time to time shares of Common Stock pursuant to a
separate prospectus, which is part of a registration statement filed by the
Company simultaneously with the registration statement of which this Prospectus
in a part.
____________________
See "Risk Factors" for a discussion of certain matters to be considered
by potential investors.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS OFFERING HAS BEEN QUALIFIED UNDER THE SECURITIES LAWS OF A LIMITED NUMBER
OF STATES, AND THE SHARES OFFERED HEREBY MAY BE SOLD ONLY IN THOSE STATES. SUCH
QUALIFICATIONS, HOWEVER, DO NOT CONSTITUTE AN ENDORSEMENT OR APPROVAL BY ANY
PARTICULAR STATE SECURITIES COMMISSION OF ANY SECURITIES OFFERED OR THE TERMS OF
THIS OFFERING. NO STATE SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR
COMPLETENESS OF THIS PROSPECTUS.
The Date of this Prospectus is June 3, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and files reports and other
information with the Securities and Exchange Commission (the "Commission") in
accordance therewith. Such reports, proxy statements, and other information
filed by the Company are available for inspection and copying at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and at the Commission's Regional
Offices located at Room 1028, Jacob K. Javits Federal Building, 26 Federal
Plaza, New York, New York 10278 and Room 3190, Kluczynski Federal Building, 230
South Dearborn Street, Chicago, Illinois 60604. Copies of such material may be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth St., N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Current Report on Form 8-K filed on February 16, 1996
(reporting certain acquisition transactions of the Registrant) as
amended by Form 8-K(A) on April 16, 1996.
3. The Company's Current Report on Form 8-K/A filed on September 11, 1995
(reporting an acquisition transaction of the Registrant), as amended by
Forms 8-K(A) on November 15, 1995 and May 15, 1996.
4. The Company's Quarterly Reports on Form 10-Q for the fiscal quarter
ended March 31, 1995.
5. The Company's Report on Form 10-C filed on March 15, 1996.
6. The Form 8-A of the Company filed on August 30, 1988 (registering the
Registrant's Common Stock and containing a description thereof).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares offered hereby shall be deemed to
be incorporated herein by reference.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus has been delivered, upon the written or oral request of any
such person, a copy of any and all of the foregoing documents incorporated
herein by reference (other than exhibits to such documents which are not
specifically incorporated by reference into the information that this Prospectus
incorporates). Written or telephone requests should be directed to Nobel
Education Dynamics, Inc., Rose Tree Corporate Center II, 1400 North Providence
Road, Media, PA 19063, telephone number (610) 891-8200, Attention: Yvonne
DeAngelo, Vice President - Finance and Administration.
This Prospectus constitutes a part of a Registration Statement which the
Company has filed with the Commission under the Securities Act of 1933, as
amended (the "1933 Act"), with respect to the Shares. This Prospectus omits
certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and related Exhibits
thereto for further information with respect to the Company and the securities
offered hereby. Such additional information can be obtained from the
Commission's office in Washington, D.C. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
2
<PAGE>
RISK FACTORS
Prospective purchases of the Shares offered hereby should carefully
consider among other matters discussed herein the following:
1. Dependence on Management. The continued growth of the Company is
dependent on skilled management in the key positions. The loss of A.J. Clegg,
the Company's Chairman and Chief Executive Officer could have a material adverse
effect on the Company. The continued service of Mr. Clegg in his present
position is a condition to the Company's loan agreement with First Valley Bank.
2. The Chesterbrook Academy Concept. The Company has converted six existing
Rocking Horse centers to the Chesterbrook Academy name and curriculum-based
format and opened three new schools under the Chesterbrook Academy name and
format. Management is continuously monitoring the performance of these schools.
Although initial enrollment results have been positive, it is too early to
determine the degree of market acceptance of the Chesterbrook Academy concept.
The Company's success is substantially dependent on prompt market acceptance of
the Chesterbrook Academy concept.
3. School Level Staffing and Compensation. The success of the Company is
dependent on its ability to attract and maintain quality staff at its schools at
reasonable compensation levels. Compensation costs historically have exceeded
40% of the Company's revenues and the profitability of the Company depends upon
its ability to successfully manage such costs. There are substantial market
pressures on such costs, particularly at the lower end of the pay scales. Any
significant increase in the minimum wage could materially impact compensation
costs if it created upward pressure at the wage levels paid by the Company. The
Company is currently reviewing benefits packages, granting stock options to
school principals, and providing training and opportunity for career advancement
to its employees, all in an effort to obtain and retain quality staffing.
4. Growth Through Acquisition. A substantial portion of the Company's
recent growth has been through acquisitions. The Company's success is dependent
upon its ability to integrate effectively and rapidly its recently-acquired
facilities into its system of preschools, primary schools and middle schools,
and to impose its quality and financial controls on these facilities.
5. Claims and Insurance Coverage. The Company currently operates 108
facilities with over 13,000 enrolled pupils. It is thus subject to claims for
accidents which occur on the premises. In addition, there are claims which can
arise against the Company which are inherent in education and child care, such
as claims of child abuse. The Company believes that its present general
liability insurance coverage is adequate, and it recently obtained substantial
coverage for any claim which might be made for child abuse. However, there is no
assurance that such insurance coverage will continue to be available and at
economic rates. In addition to monetary costs, a single claim of sexual abuse of
a pupil -- whether or not having foundation -- could have a materially adverse
effect on the reputation, revenues and profitability of the Company.
6. Future Issuances and Sales of the Company's Common Stock. The Company
has 5,697,390 shares of its Common Stock issued and outstanding on the date
hereof. In addition, 377,144 shares of Common Stock are issuable upon conversion
of the Company's Series A Preferred Stock, 625,000 shares of Common Stock are
issuable upon conversion of the Company's Series C Preferred Stock, 265,958
shares of Common Stock are issuable upon the conversion of the Company's Series
D Preferred Stock, and an aggregate of approximately 709,000 shares of Common
Stock are issuable upon the exercise of warrants, and approximately 200,000
shares of Common Stock are issuable upon the exercise of currently exercisable
stock options. Virtually all of the aforesaid obligations to issue shares have
antidilution protection provisions which could result in more shares being
issued without additional consideration. The conversion prices on the shares of
Common Stock issuable upon the conversion of Preferred Stock and the exercise
prices of the warrants and options are all below, and most are substantially
below, the current market price of the Company's Common Stock.
3
<PAGE>
In addition to the shares of Common Stock offered by the Selling
Stockholder, the Company is also obligated to attempt to register for public
sale an aggregate of approximately 3,000,000 shares of Common Stock previously
issued in prior acquisition and/or financing transactions (including shares
issuable upon conversion of Preferred Stock and exercise of warrants) and may
become obligated to attempt to register additional shares in the future. The
existence of these shares as eligible for public resale, as well as actual sales
thereof, could have an adverse effect on the prevailing market price for the
Company's Common Stock.
7. Intangible Assets. At March 31, 1996, the Company's balance sheet
reflected $22,107,996 in intangible assets arising from the excess of
acquisition consideration paid by the Company in various transactions over the
fair market value of the net tangible assets acquired. At March 31, 1996, this
account constituted 37% of the carrying value of all of the assets of the
Company and, on that date, exceeded the consolidated equity accounts of the
Company. The Company currently amortizes these amounts over forty years. In the
event the performance of acquired assets were to deteriorate, the Company might
have to accelerate the amortization of, or fully expense, the intangibles
associated with such assets. Thus, any such deterioration could have a adverse
impact on the Company's reported earnings beyond that represented directly by
deterioration in performance.
8. Leverage. After consummation of the Offering, the Company's consolidated
equity accounts will exceed the Company's consolidated long-term indebtedness
(including the current portion thereof). Nonetheless, the Company's consolidated
indebtedness on the date of this Memorandum is approximately $24,000,000. The
degree to which the Company is leveraged could have important consequences to
holders of the Shares, including the following: (i) the Company's ability to
obtain additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other purposes may be
impaired; (ii) the Company must allocate a portion of its cash flow from
operations to the payment of principal and interest on its indebtedness, thereby
reducing the funds available to the Company for its operations; (iii) certain of
the Company's borrowings will be at variable rates of interest, which will cause
the Company to be vulnerable to increases in interest rates; and (iv) the terms
of such indebtedness include numerous financial and other restrictive covenants,
the failure to comply with which may result in an event of default which, if not
cured or waived, could cause such indebtedness (and, by reason of cross-default
or cross-acceleration provisions, certain other indebtedness) to be declared
immediately due and payable.
9. Government Regulation. The Company's business is subject to a variety of
state and local regulations and licensing requirements. Failure to comply with
applicable regulations and licensing requirements could have a material adverse
effect on the Company. Additional regulation or changes in existing regulation
might impose additional compliance costs on the Company, the precise impact of
which cannot be predicted.
4
<PAGE>
THE COMPANY
Nobel Education Dynamics, Inc.'s business mission is to be the leader in
the United States in providing affordable private education from preschool
through eighth grade for the children of middle-income working families. The
Company's operations include preschools, child care centers, elementary schools
and middle schools (through eighth grade) throughout the United States. To
attain its objectives, Nobel intends to build on its experience and expertise
both in education and child care. As an "education company", the Company's
strategy is to offer practical solutions to a segment of the education problem
in the United States.
In California, Nobel operates Merryhill Country Schools. Merryhill is a
fully accredited private school system which consists of 31 preschools,
elementary schools and middle schools. In July 1995, Merryhill received full
seven-year accreditation of all its preschool and schools from the National
Independent Private Schools Association (NIPSA).
In the Eastern and Midwestern United States, the Company operates 19
curriculum-based preschools and elementary schools, both under the name
"Chesterbrook Academy" and through its Educo, Inc. subsidiary (acquired in
August 1995). The Company also operates fifty-six child care centers, most, if
not all, of which it intends to convert to curriculum-based preschools/schools
by the end of 1997. Eastern and Midwestern locations include Pennsylvania, New
Jersey, Virginia, Maryland, North Carolina, South Carolina, Illinois, Indiana,
Delaware and Maine
Conversions to preschools/schools will include the adoption of the highly
regarded and accredited education curriculums of Nobel's other schools, with an
upgrading of the educationally oriented teaching materials and technology,
including computer labs. Immediately following conversion, a Chesterbrook
Academy school will offer grade levels through kindergarten or first grade. One
or more grades are then planned to be added in subsequent years, space
permitting, through eighth grade.
In September 1995, the Company opened the first Chesterbrook Academy
schools, including three new schools and six conversions.
Management is currently pursuing a three-pronged strategy to take advantage
of the significant growth opportunities in the private education market. First,
the Company is strengthening its existing campuses by applying the strengths of
the curriculum-based programs of its school systems to its child care centers
through conversions to the Chesterbrook Academy format. Second, the Company is
pursuing expansion in both existing and new markets by opening or acquiring
additional preschools and schools. Finally, the Company is geographically
clustering its preschools to (i) increase market awareness, (ii) provide a lower
risk method for expansion into elementary and middle schools by providing a
feeder population and (iii) gain operating effectiveness in both management and
costs.
Nobel targets its schools and preschools to meet the needs of middle-income
working parents. Most of Nobel's schools, preschools and child care centers are
open from 6:30 a.m. to 6:00 p.m., allowing early drop-off and late pick-up. In
most locations, programs are available for children starting at six weeks of
age. For basically the same price as standard child care, parents can leave
children of various ages at one Nobel school knowing they will receive a quality
education during the greater part of the day and be engaged in well-supervised
activities the remainder.
To complement its educational and child care programs, the Company also
operates (i) before and after school programs and (ii) summer camps (both sports
and educational) at its various school facilities. Nobel also seeks to add other
services and products which will add ancillary income and improve overall
operating margins.
The Company has its principal place of business at Rose Tree Corporate
Center II, 1400 North Providence Road, Media, Pennsylvania, telephone number
(610) 891-8200.
5
<PAGE>
SELLING STOCKHOLDERS
All of the shares offered hereby are owned by the Selling Stockholders
listed below.
The Company issued the Shares beneficially owned by George August, Muriel
Breger, Shirley F. Cohen, Maurice M. Greenman, Richard V. McCool, Murray Paul,
Stuart L. Sussman and Glenn E. Thompson, Jr. in connection with its acquisition
of all the common stock of Educo, Inc. In connection with such acquisition, the
Company entered into a ten-year consulting and non-competition agreement with
Richard V. McCool. The Company issued the Shares beneficially owned by Linda N.
Nash and Stephen P. Nash in connection with its acquisition of the assets of
Loudoun Children's Center, Inc. In connection with such acquisition, the Company
entered into a one-year consulting agreement with Linda Nash. Other than as
aforesaid, none of the Selling Stockholders has a material relationship with the
Company.
All of the Selling Stockholders have agreed to certain limitations on the
number of shares of Common Stock to be sold by such Selling Stockholders over a
30-day or calendar month period. See "Plan of Distribution."
Certain other stockholders of the Company who beneficially own an aggregate
of 600,000 shares of Common Stock (all of which shares are issuable upon
conversion of the Company's Series D Preferred Stock or exercise of warrants or
options) may offer from time to time shares of Common Stock pursuant to a
separate prospectus, which is part of a registration statement filed by the
Company simultaneously with the registration statement of which this Prospectus
in a part.
<TABLE>
<CAPTION>
Shares Owned
Shares of Common Stock After Offering
Name of Selling Beneficially Owned by Selling Shares Assuming All
Stockholder (1) Stockholder Prior to Offering (2) Offered Hereby Shares are Sold
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George August 12,500 12,500 0
Muriel Breger 9,375 9,375 0
Shirley F. Cohen 165,625 165,625 0
Maurice M. Greenman 15,625 15,625 0
Richard V. McCool 16,675 15,625 1,050
Murray Paul 31,250 31,250 0
Stuart L. Sussman 31,250 31,250 0
Glenn E. Thompson, Jr. 31,250 31,250 0
Linda N. Nash and Stephen 96,192 96,192 0
P. Nash, as tenants in
common
Total 409,742 408,692 1,050
</TABLE>
(1) Share certificates for shares held by George August, Muriel Breger,
Shirley F. Cohen, Maurice M. Greenman, Richard V. McCool, Murray Paul,
Stuart L. Sussman and Glenn E. Thompson, Jr. for 1,250; 937; 16,562;
1,562; 1,562; 3,125; 3,125; 3,125; 25,000 and 96,192 shares,
respectively, are held by the Company as escrow agent and pledgee to
secure certain contingent obligations of such persons under the
agreement relating to the purchase of Educo, Inc. These shares may not
be sold until the conditions to release of such Shares have been
satisfied. All remaining shares beneficially owned by such persons are
held of record on behalf of such Selling Stockholders by Glenn E.
Thompson, Jr. and Stuart L. Sussman, as escrow agents, pursuant to
arrangements intended to assure compliance with the limits on the
number of shares of Common Stock which may be transferred by them in
any calendar month period, as described under "Plan of Distribution."
(2) All amounts represent less than 1% of the issued and outstanding shares
of common stock.
6
<PAGE>
PLAN OF DISTRIBUTION
Each of the Selling Stockholders has advised the Company that such Selling
Stockholder expects to offer Shares owned by such Selling Stockholder through
brokers and dealers to be selected by such Selling Stockholder from time to
time. Each Selling Stockholder has agreed that all sales of Shares will be
effected only in "brokers' transactions" or in transactions directly with a
"market maker," as defined in paragraphs (f) and (g) of Rule 144 under the 1933
Act. Such brokers and dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
Shares for whom such brokers or dealers may act as agent or to whom they sell as
principal, or both. Each Selling Stockholder may also transfer Shares owned by
gift and upon any such transfer the donee would have the same rights of sale as
such Selling Stockholder under this Prospectus. The Selling Stockholders and any
brokers and dealers through whom sales of the Shares are made may be deemed to
be "underwriters" within the meaning of the 1933 Act, and the commissions or
discounts and other compensation paid to such persons, and any profit on the
resale of Shares as principal, may be regarded as underwriters' compensation.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 of the
company and the consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1995,
incorporated by reference in this Prospectus from the Company's Annual Report on
Form 10-K, have been incorporated herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
The combined balance sheets as of December 31, 1995 and 1994 of Schools
Out, Inc. and Affiliates and the combined statements of income, stockholder's
equity and cash flows for the years then ended, incorporated by reference in
this Prospectus from the Company's Form 8-K(A), filed April 16, 1996, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The consolidated balance sheets as of August 31, 1995 and 1994 of Educo
Incorporated and the consolidated statements of income, stockholders' equity and
cash flows for the years then ended, incorporated by reference in this
Prospectus from the Company's Form 8-K(A), filed May 15, 1996, have been
incorporated herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
has been passed upon for the Company by Drinker Biddle & Reath. Morgan R. Jones,
a director of the Company, is a partner of Drinker Biddle & Reath. Mr. Jones
holds of record 8,100 shares of the Company's Common Stock.
7
<PAGE>
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No dealer, salesman or any other person is authorized by the Company to give any
information or to make any representation other than as contained in this
Prospectus in connection with any offering made hereby. Any information or
representation not contained herein, if given or made, must not be relied upon
as having been authorized by the Company. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the securities
offered hereby by any person in any jurisdiction in which it is unlawful for
such person to make such an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
___________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Available Information............................................... 2
Incorporation of Certain
Information by Reference............................................ 2
Risk Factors........................................................ 3
The Company......................................................... 5
Selling Stockholders................................................ 6
Plan of Distribution................................................ 7
Experts............................................................. 7
Legal Matters....................................................... 7
</TABLE>
================================================================================
================================================================================
Nobel Education
Dynamics, Inc.
408,692 Shares of
Common Stock
------------------------
PROSPECTUS
-------------------------
June 3, 1996
================================================================================
