SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report January 22, 1998
HOSPITAL STAFFING SERVICES, INC.
FLORIDA 1-11131 59-2150637
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
6245 North Federal Highway, Suite 500
Fort Lauderdale, Florida 33308-1900
(Address of principal executive offices)
(954) 771-0500
Registrant's telephone number, including area code
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HOSPITAL STAFFING SERVICES, INC. AND SUBSIDIARIES
FORM 8-K
ITEM 5. OTHER EVENTS
PRESS RELEASE ISSUED JANUARY 22, 1998:
On January 22, 1998, the Company executed a definitive agreement
contemplating the sale of substantially all of the assets associated with its
Travel Nurse subsidiary to Preferred Employers Holdings, Inc. for cash in the
amount of $5.0 million. The sale of Travel Nurse is expected to occur on or
before February 13, 1998, and is contingent upon satisfactory completion of
Preferred Employers' due diligence. As an initial advance on the purchase price
for the Travel Nurse operations, in exchange for $1.5 million in cash Travel
Nurse today issued to Preferred Employers preferred stock and a secured note
convertible, under certain circumstances, into a majority of Travel Nurse's
equity on a fully diluted basis. In the event that the transaction fails to
close, Preferred Employers has the right to require Travel Nurse to repurchase
the preferred stock and redeem the note for $1.5 million. At November 30, 1997,
the assets of the Travel Nurse subsidiary to be transferred had a carrying value
on the consolidated books of the Company of approximately $151,000. The
Company's Travel Nurse subsidiary provides registered nurse and other
professional medical personnel, often referred to as "travel nurses", primarily
to client hospitals on a contractual basis for periods generally ranging from 8
to 52 weeks.
The Company continues to experience critical cash flow shortfalls and
remains in default (and may remain in default following completion of the sale
of its Travel Nurse operations) under its line of credit. The Company's Board of
Directors, with the assistance of its investment bank, is actively evaluating a
variety of strategic alternatives, including an equity infusion and/or sale of
the Company's home care operations. Completion of any such transaction may be
subject to satisfaction of a number of conditions, including due diligence;
shareholder approval; resolution of the Company's Dade County, Florida Federal
Medicare investigation; and the negotiation of a global settlement with the
Medicare program of open cost reports and appeal and reopening issues. There can
be no assurance that all or any of these conditions can be satisfied in a timely
fashion and that the Company will be able to generate cash sufficient to fund
its operations. The uncertainties associated with the Company's ability to fund
its operations raise substantial doubt about the Company's ability to continue
as a going concern.
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HOSPITAL STAFFING SERVICES, INC. AND SUBSIDIARIES
SIGNATURES
January 22, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HOSPITAL STAFFING SERVICES, INC.
By: __________________________________ Ronald G. Huneycutt, Vice President of
Ronald G. Huneycutt Finance, Chief Financial Officer
(principal accounting officer)
Date: January 29, 1998
