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SUPPLEMENT DATED SEPTEMBER 28, 1995 TO PROSPECTUS DATED APRIL 28, 1995
1,000,000 COMMON SHARES
SUNRISE PRESCHOOLS, INC.
The second paragraph on the front cover page of the Prospectus dated
April 28, 1995 is amended and replaced in its entirety as follows:
Each Warrant was originally exercisable for one Common Share at a price
of $5.00 per share, subject to adjustment under certain circumstances. On
September 21, 1995, the Company announced that it had extended the expiration
date of the Warrants through November 6, 1995 (the "Warrant Expiration Date")
and reduced the exercise price of each exercisable warrant to $1.00 for the
period remaining prior to the Warrant Expiration Date. As conditions to
extension of the Warrant and reduction of the exercise price, the Company has
provided that each holder of Warrants may exercise only one of each sixteen
Warrants held, and that the Warrants will be non-transferable for their
remaining term. Exercises of the Warrants into less than whole share increments
will not be accepted. The exercise of the Warrants in accordance with the terms
described above is also subject to effective registration of the underlying
shares or an available exemption from registration in the state of such holder's
residence. Holders of Warrants electing to exercise their Warrants prior to the
Warrant Expiration Date may revoke such election, so long as notice of such
revocation is received by the Company on or prior to the Warrant Expiration
Date. All Warrants exercised and not revoked on or prior to the Warrant
Expiration Date will be accepted by the Company and the Common Shares issuable
upon the exercise of such Warrants will be delivered to the respective holders
of Warrants as soon as practicable after the Warrant Expiration Date. Assuming
all of the eligible Warrants are exercised, the proceeds to the Company are
estimated to be approximately $62,500, prior to expenses associated with the
registration of the Common Shares and the extension and reduction of the
exercise price of the Warrants. The proceeds will be allocated to the Company's
working capital for general corporate purposes.
To the extent that any statement in this Prospectus Supplement
conflicts with a statement contained in the Prospectus, the statement in this
Prospectus Supplement shall control.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY
PERSONS ABLE TO SUSTAIN A TOTAL LOSS OF THEIR INVESTMENT. SEE "RISK FACTORS."
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY NOR HAS THE COMMISSION OR ANY
SUCH AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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SUPPLEMENTAL INFORMATION
The Prospectus is further amended to include the following additional
information:
HOLDINGS OF OFFICERS AND DIRECTORS
The following officers, directors and affiliates of the Company own
Warrants:
<TABLE>
<CAPTION>
Number of Warrants
Name and Title Beneficially Held
-------------- ------------------
<S> <C>
James R. Evans 16,300(1)
Chairman of the Board and President
Barbara L. Owens 2,300(2)
Executive Vice President, Director, Secretary and Treasurer
Robert A. Rice 35,000
Director
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</TABLE>
(1) Of Mr. Evans' 16,300 Warrants, 300 of such Warrants are held in a
trust for the benefit of Mr. Evans' children, of which Mr. Evans is
the trustee. Mr. Evans acquired 16,000 of the Warrants he owns in the
open market on September 22, 1995 at a price of $0.15 per Warrant.
(2) Of Ms. Owens' 2,300 Warrants, 150 of such Warrants are held in a trust
for the benefit of Ms. Owens' children, of which Ms. Owens is the
trustee.
MARKET FOR COMMON STOCK AND WARRANTS
Trading activity with respect to the Company's Common Stock has been
limited and the volume of transactions should not of itself be deemed to
constitute an "established public trading market." A public trading market
having the characteristics of depth, liquidity and orderliness depends upon the
existence of market makers as well as the presence of willing buyers and
sellers, which are circumstances over which the Company does not have control.
The Common Stock is quoted in the National Daily Quotation Service
("Pink Sheets") published daily by the National Quotation Bureau, Inc. under
the symbol SUNR. Quotations are also available for the Common Stock through
the Electronic Bulletin Board operated by the National Association of
Securities Dealers, Inc. under the symbol 3SUNR. The following table sets forth
the high and low bid prices for the Common Stock based on closing transactions
during each specified period as reported by the National Quotation Bureau, Inc.,
which prices reflect inter-dealer prices without retail mark- up, mark-down or
commission and may not necessarily represent actual transactions:
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<TABLE>
<CAPTION>
Fiscal 1995 Bid Fiscal 1994 Bid
-------------------------------------- -----------------------------------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
First Quarter $1.375 $1.000 $1.000 $.750
Second Quarter 1.688 .938 1.250 .875
Third Quarter 1.563 1.125 1.500 .750
Fourth Quarter 2.625 1.250 1.625 .875
</TABLE>
Until September 22, 1995, at which time the Warrants became
non-transferable, the Warrants were quoted in the Pink Sheets under the symbol
SUNRW and on the Electronic Bulletin Board under the symbol 3SUNRW. The
following table sets forth the high and low bid prices for the Warrants based on
closing transactions for each specified period as reported by the National
Quotation Bureau, Inc.
<TABLE>
<CAPTION>
Fiscal 1995 Bid Fiscal 1994 Bid
-------------------------------------- -----------------------------------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
First Quarter $.188 $.063 $.188 $.063
Second Quarter .188 .063 .188 .063
Third Quarter .375 .063 .188 .063
Fourth Quarter .375 .063 .250 .125
</TABLE>
PURPOSE OF PROPOSAL TO WARRANTHOLDERS
The Company has announced that it has entered into a letter of intent
to undertake a public offering of securities. In connection with planning for
such offering, the Company decided to make a proposal to the Warrantholders
which would result in the final disposition of the Warrants. Accordingly, the
Company has reduced the exercise price of the Warrants and extended their
expiration date through November 6, 1995, all as described in this Prospectus
Supplement. The Company had extended the expiration date of the Warrants
several times over the past several years. The Company believes that this final
extension through November 6, 1995 in combination with the reduction in the
exercise price of the Warrants will provide Warrantholders an opportunity to
benefit from exercise of a portion of their Warrants.
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