<PAGE> 1
As filed with the Securities and Exchange Commission on May 13, 1996
REGISTRATION NO. 33-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
CAPSTONE PHARMACY SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 62-1293855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2930 WASHINGTON BOULEVARD
BALTIMORE, MARYLAND 21230-1197
(410) 646-7373
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
R. DIRK ALLISON, PRESIDENT COPY TO:
CAPSTONE PHARMACY SERVICES INC. PETER M. OLDHAM
2930 WASHINGTON BOULEVARD HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
BALTIMORE, MARYLAND 21230-1197 1800 FIRST AMERICAN CENTER
(410) 646-7373 NASHVILLE, TENNESSEE 37219
(615) 256-0500
(Name, address, including zip code, and telephone number including area code,
of agent for service)
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment plans, please 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]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered per Security Price Fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 6,418,467(1) $10.625(2) $68,196,212(2) $23,516
Series B Warrants
Redeemable 650,000 $10.00 (3) $ 6,500,000(3) $ 2,241
======================================================================================================
</TABLE>
(1) Includes 650,000 shares to be issued upon exercise of the Series B Warrants
registered hereby. The registration fee for such shares is calculated in
connection with the Series B Warrants.
(2) Estimated solely for computing registration fee pursuant to Rule 457(c).
The calculation is based on the average of the high and low prices of the
Company's common stock reported on May 8, 1996.
(3) Estimated solely for computing registration fee pursuant to Rule 457(i).
The calculation is based upon no offering price for the Series B Warrants
and a $10.00 exercise price.
--------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
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 sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 13, 1996
CAPSTONE PHARMACY SERVICES, INC.
6,418,467 Shares of Common Stock
650,000 Series B Warrants
This Prospectus relates to (i) the resale by the holders thereof (the
"Selling Stockholders") of up to 5,118,467 shares of Capstone Pharmacy
Services, Inc. (the "Company" or "Capstone") Common Stock, par value $.01 per
share (the "Common Stock") which have been previously issued, or which underlie
certain warrants (the "Private Placement Warrants") previously issued, by
Capstone in private placements and in an acquisition; (ii) the issuance by
Capstone of warrants (the "Series B Warrants") entitling the holders thereof to
purchase an aggregate of 650,000 shares of Common Stock at $10.00 per share,
which warrants are issuable upon the exercise of currently outstanding (and
previously registered) warrants (the "Series A Warrants"); and (iii) the
issuance of 650,000 and 650,000 shares of Common Stock upon the exercise of the
Series A Warrants and the Series B Warrants, respectively.
None of the proceeds from the sale of the shares by the Selling
Stockholders will be received by the Company. The Company could receive gross
proceeds of up to $4,466,188 from the exercise of the Private Placement
Warrants, up to $3,900,000 from the exercise of the Series A Warrants and up to
$6,500,000 from the exercise of the Series B Warrants. See "Use of Proceeds."
The Company has paid all costs and fees associated with the registration of the
securities under the Federal and state securities laws and the preparation and
delivery of this Prospectus.
The Company's Common Stock is listed on the Nasdaq Stock Market under the
symbol "DOSE." On May 8, 1996, the reported closing price of the Company's
Common Stock on the Nasdaq Stock Market was $10.50 per Share.
---------------
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.
<PAGE> 3
TABLE OF CONTENTS
AVAILABLE INFORMATION.......................................... 3
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.............. 3
THE COMPANY.................................................... 4
USE OF PROCEEDS................................................ 5
SELLING STOCKHOLDERS........................................... 6
PLAN OF DISTRIBUTION........................................... 10
LEGAL MATTERS.................................................. 10
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL
UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
2
<PAGE> 4
AVAILABLE INFORMATION
The Company's principal executive offices are located at 2930 Washington
Boulevard, Baltimore, Maryland 21230, phone number (410) 646-7373. The Company
is subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Copies of such reports
and other information filed by the Company can be obtained, at prescribed
rates, from the Public Reference Section of the Commission at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition,
such reports and other information can be inspected at the Public Reference
Section referred to above and at the Regional Offices of the Commission at
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and 75 Park Place, 14th Floor, New York, New York 10007. Copies of such
material can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
INFORMATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K
for the ten months ended December 31, 1995;
2. The Company's Registration Statement on Form 8-A
relating to the Company's Common Stock dated June 18, 1996;
3. The Company's Current Report on Form 8-K dated
December 31, 1995, as amended by Form 8-K/A;
4. The Company's Current Report on Form 8-K dated
February 29, 1996, as amended by Form 8-K/A; and
5. The Company's Current Report on Form 8-K dated March 20, 1996.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), (c), 14 or 15(d) of the Exchange Act and prior to
the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein, or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the request of
such person, a copy of any or all of the documents which are incorporated by
reference in this Prospectus, but not delivered herewith, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests should be directed to Dirk Allison, President, Capstone
Pharmacy Services, Inc., 2930 Washington Boulevard, Baltimore, Maryland 21230,
(410) 646-7373.
3
<PAGE> 5
THE COMPANY
Capstone is a leading institutional pharmacy company that provides
prescription and non-prescription pharmaceuticals and related services,
including intravenous therapy services and pharmacy consulting services, to
long-term care facilities and correctional facilities. The Company supplies
services to residents of over 200 long-term care facilities containing
approximately 44,000 beds in New York, New Jersey, Maryland, Massachusetts,
Illinois, Pennsylvania and Delaware. In addition, Capstone provides services
to inmates in over 110 correctional facilities housing over 110,000 inmates
throughout the United States, making Capstone what management believes to be
the largest private provider of pharmaceutical services to inmates in the
United States. Capstone also provides pharmaceuticals and related services to
hospitals and health maintenance organizations ("HMOs"). For the ten months
ended December 31, 1995 the Company's net sales were approximately $48.8
million.
Capstone's strategy is to be the leading low-cost provider of
pharmaceuticals and related services to residents of long-term care facilities
in major metropolitan areas, with a primary focus on the Baltimore-Boston urban
corridor, and to inmates in privately operated correctional facilities across
the United States. In the urban corridor from Baltimore, Maryland to Boston,
Massachusetts, the Company provides pharmaceuticals and services from five
centers, each of which is located within a radius of approximately 150 miles
from each long-term care facility it serves. The Company recently began
servicing the Chicago long-term care market with one pharmacy. Correctional
facilities are served primarily from one center in Baltimore, Maryland, which
utilizes mail and courier services to deliver pharmaceuticals to institutions
located throughout the United States, generally where either the prison system
or the health care portion of the prison system has been privatized. For the
ten months ended December 31, 1995, the provision of pharmaceuticals and
services to long-term care (including HMOs) and correctional facilities
accounted for approximately 63% and 23%, respectively, of Capstone's net sales.
Since May 1995, Capstone has acquired PremierPharmacy, Inc. ("Premier"),
Geri-Care Systems, Inc. and Scripts & Things, Inc. (collectively, "Geri-Care"),
and IMD Corporation ("IMD"). The Premier and Geri-Care acquisitions provided
Capstone with contracts to provide pharmaceuticals and related services to
additional long-term care facilities in the New York City metropolitan area.
As a result of the Premier acquisition, Dirk Allison, President of Premier,
joined Capstone as its Chief Executive Officer. Prior to its acquisition, IMD
was the second largest private institutional pharmacy company in Chicago, the
country's third largest institutional pharmacy market. Management believes
that its recent acquisitions have positioned Capstone to implement its
operating strategy of serving approximately 10,000 to 20,000 long-term care
beds from each of its pharmacy centers and expanding its correctional facility
operations across the United States.
The principal address of Capstone Pharmacy Services, Inc. is 2930
Washington Boulevard, Baltimore, Maryland 21230, and its telephone number is
(410) 646-7373.
4
<PAGE> 6
USE OF PROCEEDS
5,118,467 of the shares of Common Stock offered hereby are being offered
by the Selling Stockholders. Accordingly, the Company will not receive any of
the proceeds from any transactions in these shares by the Selling Stockholders.
The Company will receive proceeds to the extent that the Series A
Warrants, Series B Warrants and Private Placement Warrants held by the Selling
Stockholders are exercised before their expiration, as follows:
<TABLE>
<CAPTION>
Description Number of Warrants Exercise Price Expiration Date
----------- ------------------ -------------- ---------------
<S> <C> <C> <C>
Series A Warrants 650,000 $ 6.00/share June 30, 1996
Series B Warrants 650,000* $10.00/share June 30, 1997
Private Placement Warrants 501,819 $ 4.50/share May 22, 1998
Private Placement Warrants 401,455 $ 5.50/share May 22, 1998
</TABLE>
- --------------
* Assumes full exercise of Series A Warrants. A Series B Warrant will be issued
upon the exercise of each Series A Warrant.
As a result, the Company could receive gross proceeds of up to $3,900,000
from the exercise of the Series A Warrants, up to $6,500,000 from the exercise
of the Series B Warrants and up to $4,466,188 from the exercise of the Private
Placement Warrants. The Company intends to use these proceeds, if any, for
general corporate purposes.
5
<PAGE> 7
SELLING STOCKHOLDERS
The Selling Stockholders acquired or will acquire 4,110,775 shares of
Common Stock, including shares underlying the Private Placement Warrants, in
private placements that have closed in or since December 1994, and 1,007,692
shares in connection with an acquisition made by the Company in January 1996.
Registration of these shares of Common Stock will enable the Selling
Stockholders to sell such shares from time to time on the Nasdaq Stock Market
or in other transactions. The table below sets forth certain information
regarding the beneficial ownership of the Common Stock by the Selling
Shareholders as of May 2, 1996 and assumes the exercise of all Private
Placement Warrants.
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership Prior to Shares Ownership After the
Offering Offered Herein Offering
----------------------- -------------- ------------------------
Shareholder Number Percent(1) Amount Percent(1)
----------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Edward Sonshine 74,500(2)(3)(4) * 57,000 17,500 *
Joseph F. Furlong, III 74,500(3)(4) * 57,000 7,500 *
Robert S. Colman 38,000(5) * 38,000 -0- -0-
Paul Godfrey 57,171(2)(6) * 57,171 -0- -0-
Howard Wortzman 57,475(7) * 57,475 -0- -0-
Norman Hill Florida, Inc. 53,291(8) * 53,291 -0- -0-
Nicholas E. Sinacori 52,060(9) * 52,060 -0- -0-
R. Dirk Allison 97,746(10) * 57,746 40,000 *
Don H. Thompson 15,618(11) * 15,618 -0- *
Carl A. Pannuti 29,363(12) * 26,030 -0- -0-
A. Joe McLellan 13,539(13) * 5,206 -0- -0-
Curtis B. Johnson 52,060(14) * 52,060 -0- -0-
PF & R Holdings Inc. 342,000(15) 2.2% 342,000 -0- -0-
Morris A. Perlis 387,500(2)(16) 2.4% 95,000 292,500 1.8%
Allan C. Silber 387,500(2)(16) 2.4% 95,000 292,500 1.8%
J.E. Duffy 13,015(17) * 13,015 -0- -0-
John Haronian 142,500(4)(18) * 95,000 47,500 *
John E. Zuccotti 24,500(19) * 9,500 15,000 *
Fallbrook Holdings Limited 100,000 * 100,000 -0- -0-
Shermfin Corp 650,000 4.1% 650,000 -0- -0-
CreditAnstalt American
Corporation 130,000(20) * 130,000 -0- -0-
Cary Lester McWhinnie 26,000 * 26,000 -0- -0-
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership Prior to Shares Ownership After the
Offering Offered Herein Offering
----------------------- -------------- ------------------------
Shareholder Number Percent(1) Amount Percent(1)
----------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Patrick S. Brigham 202,310 1.3% 202,310 -0- -0-
Abraham Wieder 689,231 4.4% 689,231 -0- -0-
Raphael Lieberman 318,461 2.0% 318,461 -0- -0-
Cote 100 457,143 2.9% 457,143 -0- -0-
ASB Capital Management 410,000 2.6% 410,000 -0- -0-
Private Trust Bank Corp. 91,310 * 91,310 -0- -0-
Experta Trustee Co. Ltd. 114,000 * 114,000 -0- -0-
Cantrade Ormond Burrus
Banque Privee S.A. 23,000 * 23,000 -0- -0-
The Jennifer Altman
Foundation 26,600(21) * 26,600 -0- -0-
Albert L. Zesiger 71,060(22) * 71,060 -0- -0-
Alza Corporation
Retirement Plan 35,150(23) * 35,150 -0- -0-
Asphalt Green, Inc. 17,860(24) * 17,860 -0- -0-
Brearley School General
Investment Fund 26,600(25) * 26,600 -0- -0-
Barrie Ramsay Zesiger 44,460(26) * 44,460 -0- -0-
Chapin School -
Endowment Fund 35,150(23) * 35,150 -0- -0-
Helen Hunt 17,860(24) * 17,860 -0- -0-
Psychology Associates 3,420(27) * 3,420 -0- -0-
Meehan Investment
Partnership I, L.P. 17,860(24) * 17,860 -0- -0-
City of Milford Employee
Pension Fund 88,350(28) * 88,350 -0- -0-
NFIB Employee Pension 55,100(29) * 55,100 -0- -0-
Norwalk Employee
Pension Fund 71,060(30) * 71,060 -0- -0-
Planned Parenthood of
New York City 14,060(31) * 14,060 -0- -0-
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
Beneficial Beneficial
Ownership Prior to Shares Ownership After the
Offering Offered Herein Offering
----------------------- -------------- ------------------------
Shareholder Number Percent(1) Amount Percent(1)
----------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Mary Van Schuyler
Raiser 17,860(24) * 17,860 -0- -0-
Raiser Marital Trust 71,060(30) * 71,060 -0- -0-
Robert J. Suslow 26,600(25) * 26,600 -0- -0-
Tab Products Company
Pension Plan 35,150(23) * 35,150 -0- -0-
Warren Investment
Group, Ltd. 17,860(24) * 17,860 -0- -0-
Warren Otologic Group
Profit Sharing Trust 17,860(24) * 17,860 -0- -0-
Harold & Grace Willens
JTWROS 17,860(24) * 17,860 -0- -0-
</TABLE>
- ---------------------
* Less than 1%.
(1) The percentages shown are based on 15,698,002 shares of Common Stock
outstanding on April 23, 1996, plus, as to each individual, the number of
shares of Common Stock deemed to be owned by such holder pursuant to Rule
13d-3 under the Securities Exchange Act of 1934 (the "Exchange Act"),
which includes shares subject to stock options and warrants held by such
holder which are exercisable within sixty (60) days.
(2) Counsel Corporation ("Counsel") is a publicly-traded, Ontario, Canada
corporation primarily engaged in the health care industry. Counsel owns
6,244,325 shares of Capstone Common Stock, which includes shares issuable
upon the exercise of warrants to purchase 1,298,181 shares at $4.50 per
share and 1,038,545 at $5.50 per share. Messrs. Silber, Sonshine, Perlis
and Godfrey, each of whom is a director of Capstone, are also directors of
Counsel. Mr. Silber beneficially owns or controls approximately 25% of
the Common Stock of Counsel. All of the directors listed in this footnote
(2) disclaim beneficial ownership of shares of Common Stock in their
capacity as directors of Counsel, and Mr. Silber disclaims beneficial
ownership of shares of Common Stock in his capacity as a significant
stockholder of Counsel.
(3) Includes 15,000 and 12,000 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(4) Includes 15,000 and 2,500 shares purchasable upon exercise of options at
$4.44 and $7.50 per share, respectively.
(5) Includes 10,000 and 8,000 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(6) Includes 15,045 and 12,036 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(7) Includes 15,125 and 12,100 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(8) Includes 14,024 and 11,219 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(9) Includes 13,700 and 10,960 shares purchasable upon exercise of warrants
of $4.50 and $5.50 per share, respectively.
(10) Includes 15,170 and 12,136 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively and 15,000 and 25,000 shares
purchasable upon exercise of options at $4.44 and $8.50 per share,
respectively.
(11) Includes 4,110 and 3,288 shares purchase upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(12) Includes 6,850 and 5,480 shares purchasable upon exercise of warrants at
$4.50 and $5.50, respectively and 3,333 shares purchasable upon exercise
of options at $8.50 per share.
(13) Includes 1,370 and 1,096 shares purchasable upon exercise of warrants at
$4.50 and $5.50, respectively and 8,333 shares purchasable upon exercise
of options at $8.50 per share.
(14) Includes 13,700 and 10,960 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(15) Includes 90,000 and 72,000 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(16) Includes 25,000 and 20,000 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively and 15,000, 2,500, 250,000 and
25,000 shares purchasable upon exercise of options at $4.44, $7.50, $4.31
and $8.50 per share, respectively.
(17) Includes 3,425 and 2,740 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
8
<PAGE> 10
(18) Includes 15,000 and 15,000 shares purchasable upon exercise of options at
$2.85 and $3.50 per share, respectively and 25,000 and 20,000 shares
purchasable upon exercise of warrants at $4.50 and $5.50 per share,
respectively.
(19) Includes 15,000 shares purchasable upon exercise of options at $4.44 per
share and 2,500 and 2,000 shares purchasable upon exercise of warrants
at $4.50 and $5.50 per share, respectively.
(20) Includes 15,000 shares purchasable upon exercise of warrants at $7.31 per
share.
(21) Includes 7,000 and 5,600 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(22) Includes 18,700 and 14,960 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(23) Includes 9,250 and 7,400 shares purchasable upon exercise of warrants at
$4.50 an $5.50 per share, respectively.
(24) Includes 4,700 and 3,760 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(25) Includes 7,000 and 5,600 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(26) Includes 11,700 and 9,360 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(27) Includes 900 and 720 shares purchasable upon exercise of warrants at $4.50
and $5.50 per share, respectively.
(28) Includes 23,250 and 18,600 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(29) Includes 14,500 and 11,600 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(30) Includes 18,700 and 14,960 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
(31) Includes 3,700 and 2,960 shares purchasable upon exercise of warrants at
$4.50 and $5.50 per share, respectively.
9
<PAGE> 11
PLAN OF DISTRIBUTION
The Series B Warrants and the 1,300,000 shares of Common Stock issuable
upon the exercise of the Series A Warrants and the Series B Warrants will be
issued by the Company in direct transactions with the holders of the rights to
acquire such securities and are expected to be available for public trading on
the Nasdaq Stock Market upon issuance. The Company will pay no commissions or
discounts in connection with such transactions.
The Selling Stockholders have advised the Company that they may elect to
offer for sale and to sell the shares of Common Stock listed herein from time
to time through brokers on the Nasdaq Stock Market, in private transactions,
through the writing of options on the shares, or otherwise (including pursuant
to Rule 144 and in transactions with the Company as consideration for the
exercise price of certain warrants), at market prices prevailing at the time of
sale or at prices and terms then obtainable, in block transactions, negotiated
transactions, or otherwise. Accordingly, sales prices and proceeds to the
Selling Stockholders will depend upon market fluctuations and the manner of
sale.
If the shares are sold through brokers, the Selling Stockholders will pay
brokerage commissions and other charges, including any transfer taxes (which
compensation as to a particular broker dealer might be in excess of customary
commissions). No Selling Stockholder has an agreement with any particular
broker with respect to the price at which the Common Stock will be sold or with
respect to any commissions to be charged. The Selling Stockholders will also
pay the fees and expenses of any counsel retained by them in connection with
this Offering. Except for the payment of such legal fees and expenses,
brokerage commissions and charges, the Company will bear all expenses in
connection with registering the shares of Common Stock offered hereby.
LEGAL MATTERS
Certain legal matters with respect to the legality of the shares of Common
Stock and Series B Warrants offered hereby will be passed upon for the Company
by Harwell Howard Hyne Gabbert & Manner. P.C., Nashville, Tennessee.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration Fee ............... $25,757
Listing Fee .................... 17,500
*Blue Sky fees and expenses ..... 500
*Accounting fees and expenses ... 3,500
*Legal fees and expenses ........ 15,000
*Transfer Agent Fees ............ 500
*Miscellaneous .................. 500
Total ............................ 62,257
</TABLE>
- ----------
*Estimated
INDEMNIFICATION
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Eleventh of the Certificate of Incorporation of the Registrant
sets forth the extent to which officers or directors of the Registrant may be
insured or indemnified against any liabilities which they may incur. The
general effect of such provision is that any person made a party to any action,
suit or proceeding by reason of the fact that he or she is or was a director or
officer of the Registrant will be indemnified by the Registrant against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding, to the fullest extent permitted under the laws
of the State of Delaware. In addition, such provision provides that, in the
Registrant's sole discretion, the Registrant may indemnify employees or agents
against such expenses, judgments, fines and amounts paid in settlement.
SECTION 145 of the Delaware General Corporation Law ("DGCL") applies to
the Registrant and the relevant portion of the DGCL provides as follows:
145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.
(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the
II-1
<PAGE> 13
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem
proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct
set forth in subsections (a) and (b) of this section. Such determination
shall be made (1) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit
or proceeding, or (2) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the shareholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the corporation as authorized in
this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and conditions,
if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation
as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the
corporation" shall include any service as a director, officer,
II-2
<PAGE> 14
employee or agent of the corporation which imposes duties on, or involves
services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
The Registrant maintains insurance for the benefit of the Registrant's
directors and officers and officers and directors of the Registrant's
subsidiaries insuring such persons against certain liabilities, including
liabilities arising under the securities laws.
II-3
<PAGE> 15
ITEM 16. EXHIBITS
The exhibits filed as a part of this registration statement are listed in
the Exhibit Index immediately following the signature page.
ITEM 17.UNDERTAKINGS
The undersigned 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;
(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.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(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 Section 15(d) of the Securities Exchange Report 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, 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, 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, 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.
II-4
<PAGE> 16
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 Baltimore, State of Maryland, on the 13th day of May,
1996.
CAPSTONE PHARMACY SERVICES, INC.
By: /s/ R. Dirk Allison
-------------------------------------
R. Dirk Allison
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears below
hereby appoints R. Dirk Allison and Donald W. Hughes, and each of them, as his
attorneys-in-fact to execute in the name and on behalf of any such person,
individually and in the capacity stated below, and to file all amendments and
post-effective amendments to this Registration Statement, which amendment or
amendments may make such changes and additions in this Registration Statement
as such attorneys-in-fact may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on the dates indicated by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ R. Dirk Allison
- --------------------------- President, Chief Executive Office
R. Dirk Allison and Director (Chief Executive May 13, 1996
Officer)
/s/ Donald W. Hughes
- --------------------------- Vice President, Chief Financial
Donald W. Hughes Officer and Secretary (Chief
Accounting Officer) May 13, 1996
/s/ Allan C. Silber Chairman May 13, 1996
- ---------------------------
Allan C. Silber
/s/ Morris A. Perlis Vice Chairman May 13, 1996
- ---------------------------
Morris A. Perlis
/s/ Joseph Furlong, III Director May 13, 1996
- ---------------------------
Joseph Furlong, III
/s/ John Haronian Director May 13, 1996
- ---------------------------
John Haronian
/s/ Albert Reichman Director May 13, 1996
- ---------------------------
Albert Reichmann
/s/ J. Brendan Ryan Director May 13, 1996
- ---------------------------
J. Brendan Ryan
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Edward Sonshine Director May 13, 1996
- -------------------------------
Edward Sonshine
/s/ Dr. Gail Wilensky Director May 13, 1996
- -------------------------------
Dr. Gail Wilensky
/s/ John E. Zuccotti Director May 13, 1996
- -------------------------------
John E. Zuccotti
</TABLE>
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<S> <C>
4.1 Form of Series B Warrant Certificate*
4.2 Form of Series B Warrant*
5 Opinion of Harwell, Howard, Hyne, Gabbert & Manner, P.C.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Roth and Company
23.3 Consent of Blackman Kallick Bartelstein, LLP
23.4 Consent of Harwell, Howard, Hyne, Gabbert & Manner, P.C. (See Exhibit 5)
24 Power of Attorney (See signature page)
</TABLE>
---------
* To Be Filed By Amendment
<PAGE> 1
Exhibit 5
May 13, 1996
Capstone Pharmacy Services, Inc.
2930 Washington Boulevard
Baltimore, Maryland 21230-1197
Gentlemen:
We have acted as special counsel to Capstone Pharmacy Services, Inc. (the
"Company"), in connection with the registration of 6,418,467 shares of its
common stock, $.01 par value per share and 650,000 Series B Warrants, pursuant
to a registration statement on Form S-3, as filed with the Securities and
Exchange Commission (the "Registration Statement"). This firm hereby consents
to the filing of this opinion as an exhibit to the Registration Statement and
with agencies of such states and other jurisdictions as may be necessary in the
course of complying with the laws of such states and jurisdictions regarding
the offering and sale of the stock in accordance with the Registration
Statement. We also consent to the inclusion of our name in the prospectus
under the heading "Legal Matters."
We have examined originals, or certified or photostatic copies of such
statutes, records, regulations, certificates of the officers of the Company and
of public officials, and such other information as we have deemed necessary for
purposes of rendering this opinion.
In stating our opinion, we have assumed: (i) that all signatures are
genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as copies conform to authentic original documents;
and (ii) that the parties to such documents have the legal right and power
under all applicable laws, regulations and agreements to enter into, execute,
deliver and perform their respective obligations thereunder.
On the basis of such review, but subject to the limitations expressed
herein, we are of the opinion, as of the date hereof, that (i) the securities
being registered for primary issuance by the Registration Statement will, when
issued as contemplated under the Registration Statement, be legally issued,
fully paid and non-assessable, and (ii) the securities being sold by the
Selling Stockholders (as defined in the Registration Statement) will be (or
were), when issued to them, legally issued, fully paid and non-assessable.
Our opinion herein is limited solely to the laws of the United States of
America and the corporate law of the State of Delaware. In rendering the
opinion set forth herein, we have relied upon the documents referenced above
and have made no independent verification or investigation of factual matters
pertaining thereto or to the Company.
Very truly yours,
/s/ HARWELL HOWARD HYNE
GABBERT & MANNER, P.C.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 11, 1996,
included in Capstone Pharmacy Services, Inc.'s Form 10-K for the ten months
ended December 31, 1995, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Baltimore, Maryland
May 9, 1996
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 18, 1995,
included in Capstone Pharmacy Services, Inc.'s Form 8K/A dated December 31,
1995 and to all references to our Firm included in this registration statement.
/s/ Roth & Company
Brooklyn, New York
May 9, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 20, 1996 on
the financial statements of IMD Corporation, included in Capstone Pharmacy
Services, Inc.'s Form 8-K/A for the years ended December 31, 1995, 1994 and
1993 and to all references to our firm included in this registration statement.
/s/ Blackman Kallick Bartelstein, LLP
Chicago, Illinois
May 9, 1996
