SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter Ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12992
NuMED HOME HEALTH CARE, INC.
(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1711764
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
5770 Roosevelt Blvd., Suite, 700, Clearwater, FL 34620
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 524-3227
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [ X ] Yes
[ ] No
The number of shares outstanding of the Issuer's common stock at $.001 par
value as of November 5, 1996 was 4,903,916 (exclusive of Treasury Shares).
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, March 31,
1996 1996
ASSETS
Current assets:
Cash and cash equivalents $ 931,514 $ 1,494,860
Cash deposits securing contractual
arrangements 1,917,014 1,417,014
----------- -----------
2,848,528 2,911,874
Accounts receivable 5,213,266 4,788,715
Notes receivable 0 106,966
Inventories 26,274 26,274
Prepaids and other current assets 223,753 201,224
----------- -----------
Total current assets 8,311,821 8,035,053
Property and equipment, net of accumulated
depreciation of $162,317 and $117,459,
respectively 234,294 259,138
Goodwill, net of amortization of $1,296,478
in and $1,103,018 in 1995 4,850,657 4,991,154
Other intangibles assets, net of accumulated
amortization of $ 996,574
and $926,187 respectively 133,238 203,627
Other 32,236 32,109
----------- -----------
Total assets $13,562,246 $13,521,081
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 1,050,940 $ 550,117
Accrued expenses 1,990,576 1,943,306
Short term portion on line of credit 927,291 20,000
Current portion of notes payable-
acquisitions 176,501 167,852
----------- -----------
Total current liabilities 4,145,308 2,681,275
Long term obligations:
Other 21,554 21,999
Notes payable-acquisitions, less
current portion 551,243 637,028
----------- -----------
Total long term obligations 572,797 659,027
----------- -----------
Total liabilities 4,718,105 3,340,302
Stockholders' equity:
Preferred stock, authorized 2,000,000,
no shares issued or outstanding 0 0
Common stock, $.001 par value, authorized
48,000,000 shares, 5,010,219 shares
issued 5,010 5,010
Additional paid-in capital 10,708,661 10,708,176
Treasury stock, 106,303 and 46,023 shares,
respectively, at cost (212,424) (68,138)
Accumulated deficit (1,657,106) (464,269)
----------- -----------
Total stockholders' equity 8,844,141 10,180,779
----------- -----------
Total liabilities and stockholders'
equity $13,562,246 $13,521,081
========== ==========
Note: The balance sheet at March 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
See notes to consolidated financial statements.
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Operations
Six Months Ended September 30,
1996 1995
Net revenues $12,565,513 $11,586,345
Direct expenses 9,736,908 8,662,352
---------- ----------
Gross profit 2,828,605 2,923,993
General and administrative expenses:
Salaries and benefits 1,731,912 1,573,235
Operating expenses 384,755 330,507
Professional fees 144,775 78,301
Legal fees 114,162 54,736
Occupancy expenses 390,771 345,253
Insurance 170,918 109,817
Amortization and depreciation 302,611 311,766
Bad debt expense 32,548 5,583
---------- ----------
Total general and administrative 3,272,452 2,809,198
---------- ----------
Operating income (loss) (443,847) 114,795
Other revenues (expenses):
Interest income 59,683 52,002
Interest expense (38,786) (13,822)
Estimated contractual
settlement-FYE 6/30/95 (197,342) 0
Estimated contractual settlement-
FYE 6/30/96 (567,658) 0
Other 6,874 (13,776)
---------- ----------
Total other revenues, net (737,229) 24,404
---------- ----------
Income (loss) before income taxes (1,181,076) 139,199
Income tax (benefit) expense 11,761 3,097
---------- ----------
Net income (loss) after income taxes $(1,192,837) $ 136,102
========== ==========
Per share:
Net income (loss) after income taxes $ (0.24) $ 0.03
========== ==========
Shares used in computing per
share information 4,950,130 4,936,223
See notes to consolidated financial statements
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended September 30,
1996 1995
Net revenues $ 6,140,838 $6,060,153
Direct expenses 4,868,902 4,548,467
---------- ---------
Gross profit 1,271,936 1,511,686
General and administrative expenses:
Salaries and benefits 839,030 819,622
Operating expenses 195,348 175,867
Professional fees 41,757 54,702
Legal fees 10,191 27,640
Occupancy expenses 196,017 182,693
Insurance 94,494 47,197
Amortization and depreciation 149,942 161,920
Bad debt expense 18,150 0
---------- ---------
Total general and administrative 1,544,929 1,469,641
---------- ---------
Operating income (loss) (272,993) 42,045
Other revenues (expenses):
Interest income 26,841 26,342
Interest expense (26,147) (6,109)
Estimated contractual settlement-
FYE 6/30/95 (197,342) 0
Estimated contractual settlement-
FYE 6/30/96 (567,658) 0
Other 7,142 (9,976)
---------- ---------
Total other revenues, net (757,164) 10,257
---------- ---------
Income (loss) before income taxes (1,030,157) 52,302
Income tax (benefit) expense 8,452 (11,006)
---------- ---------
Net income (loss) after income taxes $(1,038,609) $ 63,308
========== =========
Per share:
Net income (loss) after income taxes $ (0.21) $ 0.01
========== =========
Shares used in computing per
share information 4,933,336 4,936,223
See notes to consolidated financial statements
<PAGE>
<TABLE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
Six Months Ended September 30, 1996 and Year Ended March 31, 1996
<CAPTION>
Unrealized
Gain
Additional (Loss) on
Common Stock Paid-in Accumulated Marketable Treasury Stock
Shares Dollars Capital (Deficit) Securities Shares Dollars Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at March 31,
1995 5,010,219 $5,010 $10,665,403 ($573,764) ($51,686) (409,020) ($492,000) $9,552,963
Net income 109,495 109,495
Unrealized gain on
marketable
securities 51,686 51,686
Other 6,000 6,000
Acquisition of
assets from
Rehab America, Inc. 32,637 297,715 358,114 390,751
Shares issued under
Employee Stock
Purchase
Plan 3,275 81,282 97,772 101,047
Purchase treasury
shares (21,000) (38,038) (38,038)
Private placement
of restricted
stock for
consulting
services 861 5,000 6,014 6,875
---------- -------- --------- --------- --------- -------- --------- ----------
Balance at
March 31, 1996 5,010,219 $5,010 $10,708,176 ($464,269) $0 (46,023) ($68,138) $10,180,779
Net income (loss) (1,192,837) (1,192,837)
Exercise of options 171 10,000 12,030 12,201
Purchase of
treasury shares (100,000) (201,000) (201,000)
Shares issued
under Employee
Stock Purchase
Plan 314 29,720 44,684 44,998
---------- -------- --------- --------- --------- -------- --------- ----------
Balance at
September 30, 1996 5,010,219 $5,010 $10,708,661 ($1,657,106) $0 (106,303) ($212,424) $8,844,141
========= ====== =========== ========== ========= ======== ========= ==========
</TABLE>
See notes to consolidated financial statements
<PAGE>
NuMED Home Health Care, Inc. and Subsidiaries
Consolidated Statements of Cash Flow
Six Months Ended September 30,
1996 1995
Cash flows from operating activities
Net Income (loss) $(1,192,837) $ 136,102
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 302,610 311,766
Cash deposits securing contractual
arrangements (500,000) (142,014)
Loss on sale of marketable securities 0 9,235
Loss on sale or disposal of property,
plant and equipment 268 4,540
(Decrease) increase in cash due to
net changes in operating assets
and liabilities:
Accounts receivable - trade (440,657) (821,168)
Prepaid expenses and other assets (22,529) (170,505)
Deferred charges or other long term
assets (125) 28,188
Accounts payable and accrued expenses 500,637 912,429
---------- ---------
Net cash provided by (used in ) operating
activities (1,352,633) 268,573
Cash flows from investing activities
Sale of marketable securities held for sale 0 40,965
(Purchase) of property and equipment, net (14,187) (72,273)
Acquisition of assets from Rehab America,
Inc., net of cash acquired 0 (5,124,818)
Other 0 1,000
Purchase of accounts receivable from factor 0 (242,327)
---------- ---------
Net cash (used in) investing activities (14,187) (5,397,453)
Cash flows from financing activities
Proceeds from short-term borrowings 1,662,388 202,384
Payments of short-term borrowings (735,848) (330,869)
Payments of long-term borrowings (86,231) (9,530)
Proceeds from issuance of stock 44,998 47,144
Purchase of treasury stock (201,000) 0
Exercise of options 12,201 0
(Issuance) collection of note receivable 106,966 (100,000)
---------- ---------
Net cash (used in) provided by financing
activities 803,474 (190,871)
---------- ---------
Increase (Decrease) in cash and cash
equivalents (563,346) (5,319,751)
Cash and cash equivalents at beginning
of year 1,494,860 7,406,142
---------- ---------
Cash and cash equivalents at end of
period $ 931,514 $ 2,086,391
========== =========
Non cash transactions:
Common stock issued for acquisition of
assets from Rehab America, Inc.
(275,000 shares) $ - $ 360,938
Common stock issued for consulting
services (22,715 shares) $ - $ 29,813
Common stock issued for consulting
services (5,000 shares) $ - $ 6,875
---------- ---------
$ - $ 397
========== =========
See notes to consolidated financial statements
<PAGE>
NuMED Home Health Care Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
September 30, 1996
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six
month periods ended September 30, 1996 are not necessarily indicative of
the results that may be expected for the year ending March 31, 1997. For
further information, refer to the consolidated financial statements and
footnotes included in the Company's and Subsidiaries' Form 10-KSB for the
year ended March 31, 1996.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Net Revenues for the three and six months ended September 30, 1996
increased by 1% or $81,000 and 8% or $980,000, respectively over the same
periods one year ago. The acquisition of Parke Home Health Care, Inc.
(Parke) effective January 1, 1996 accounted for an increase of $548,000
and $1,100,000 respectively, for the three and six month periods. The
remaining business experienced a decrease of $467,000 and $120,000 which
was primarily attributable to decreased volume in both the Home Health and
Rehabilitation Therapy divisions. New contracts as well as existing
business were negatively affected by the uncertainty as a result of
pending discussions and consideration of an extraordinary transaction
involving the potential sale of the Company.
The Health Care Financing Administration (HCFA) has issued
reimbursement guidelines (salary equivalency) for physical therapy
services. Similar guidelines for occupational and speech therapy services
are pending, but have not yet been published. Recently, HCFA has
instructed its intermediaries to scrutinize payments for occupational and
speech therapy services using prudent buyer guidelines which generally
state that a health care provider should not pay in excess of market rates
for comparable services. The Company expects that under the general
direction of HCFA, fiscal intermediaries will continue to aggressively
scrutinize payments related to therapy service not yet subject to salary
equivalency.
One of NuMED Rehabilitation's key customers is currently undergoing a
Medicare audit in connection with professional contract therapy services
provided to its patients by NuMED Rehabilitation. The customer's fiscal
intermediary, in its interpretation of the Medicare prudent buyer
guidelines, has concluded that the cost of certain professional contract
therapy services provided by NuMED Rehabilitation exceeded these
guidelines. Management believes that the fiscal intermediary conducting
this audit has applied an overreaching and erroneous interpretation of
applicable reimbursement guidelines. Nonetheless, the Company is required
to record an estimated aggregate reserve of $765,000 for the potential
disallowance of these costs for two years identified in the Medicare
audit. The estimated settlement for the first year (customer's fiscal
year ending June 30, 1995) of the contract which is currently being
audited is approximately $197,000. The estimated settlement for to the
second year (customer's fiscal year ending June 30, 1996) of the contract
which is still unaudited is approximately $568,000. The Company was
contractually obligated to repay this key client the amount of Medicare
disallowed costs. During the second quarter of fiscal 1997, NuMED paid
$511,000 to this customer, representing disallowed costs for the most
recently audited cost report. In addition, the Company has secured a
$500,000 letter of credit for future potential disallowances (see
Liquidity and Capital Resources). There is no guarantee that the
intermediary will reconsider its position and settle based on the
estimated calculations. An adverse determination by the fiscal
intermediary could require NuMED Rehabilitation to further revise its
estimate and could have a material adverse effect on the Company's
financial position, liquidity and results of operations.
Direct Expenses increased approximately 7% and 12%, respectively, for
the three and six months ended September 30, 1996. As a percentage of Net
Revenues, Direct Expenses increased 4% to 79% and 2% to 77%, respectively
as compared to 75% for the same periods one year ago. For the three
months ended September 30, 1996, Direct Expenses, as a percentage of Net
Revenues, for the Home Health Division increased 4% to 73% while Direct
Expenses for NuMED Rehabilitation increased 6% to 87% of its net revenues.
For the six months ended September 30, 1996, Direct Expenses as a
percentage of Net Revenues for the Home Health Division increased 2% to
72% of its Net Revenues while Direct Expenses for NuMED Rehabilitation
increased 2% to 72% of its Net Revenues.
The increase in Direct Expenses as a percentage of Net Revenues for
NuMED Rehabilitation was generally attributable to three primary factors.
First, during the fourth quarter of fiscal 1996 and during the six months
ended September 30, 1996, NuMED Rehabilitation experienced the loss of
several long-term staffing contracts. While numerous lost contracts have
been replaced, new contracts were difficult to obtain prior to the
termination (in August, 1996) of discussions involving the potential sale
of the Company. NuMED Rehabilitation employees staffing terminated
contracts were re-assigned to other facilities pending the acquisition of
new staffing agreements to replace terminated contracts. Second, NuMED
Rehabilitation initiated efforts to hire employees to replace more
expensive contract staff currently necessary to meet staffing demands.
The aggregate effect of reassigning existing employees and integrating new
staff diminished overall efficiencies for NuMED Rehabilitation's
professional therapists during the six months ended September 30, 1996.
Third, the mix of revenue between occupational, physical and speech
therapy shifted during the three months ended September 30, 1996.
Physical therapy revenue, which generally yields lower gross margins than
either occupational or speech therapy, constituted a larger percentage of
net revenues during the second quarter of fiscal 1997 as compared to the
same period one year ago.
Direct Expenses as a percentage of Net Revenues in the Home Health
Division also increased as business was negatively impacted by the prior
discussions pertaining to the sale of the Company. This was primarily due
to the fact that a significant portion of employees in the Home Health
Division are full time. As a result, staffing costs did not decrease with
diminished business.
Gross Profit as a percentage of Net Revenues for the three month
period ending September 30, 1996 decreased to 21% of Net Revenues as
compared to 25% for the same period a year ago. Gross Profit as a
percentage of net revenue for the six month period ending September 30,
1996 decreased to 22% of Net Revenues as compared to 25% for the same
period a year ago. The decrease in gross profit margin was a result of
the increase in Direct Expenses.
General and Administrative expenses for the three and six months
ended September 30, 1996 increased $75,000 or 5% and $463,000 or 16%
compared to the same periods one year ago. The overall increase is
attributable to the acquisition of Parke ($118,000 for the three months
ended September 30, 1996 and $208,000 for the six months ended September
30, 1996) in addition to certain unusual and non-recurring legal and
professional fees incurred in connection with the defense of class action
litigation (see Part II, Item 1 - "Legal Proceedings") and the proposed
acquisition of the Company by CCF Health Care Ventures, Inc. Salaries and
benefits also increased as a result of the addition of administrative
positions to support the Company's anticipated growth during fiscal 1997.
As a result of the foregoing, the Company experienced a net loss of
approximately $1,039,000 (consisting of $274,000 from operations and
$765,000 from the estimated contractual settlement for the customer's
years ending June 30, 1995 and June 30, 1996) for the three months ended
September 30, 1996 and $1,193,000 for the six months ended September 30,
1996 as compared to net income of $63,000 and $136,000, respectively for
the same periods one year ago. Excluding the effect of the estimated
contractual settlement and expenses associated with the potential sale,
the Company would have incurred a loss of $274,000 for the three month
period ending September 30, 1996 and a loss of $283,000 for the six month
period ending September 30, 1996.
Liquidity and Capital Resources
The Company's working capital and current ratio were $4,167,000 and
2:0, respectively as of September 30, 1996 as compared to $5,354,000 and
3:0, respectively, as of March 31, 1996. Both working capital and the
current ratio have decreased as a result of operating losses, the payment
of the estimated Medicare settlement described above and the establishment
of a letter of credit also described above.
Cash from Operations decreased $1,354,000 for the six months ended
September 30, 1996 primarily due to the net loss and transactions related
to the estimated Medicare settlement.
As previously discussed, a fiscal intermediary conducting a Medicare
audit of one of NuMED Rehabilitation's key customers has indicated its
position that the cost of certain professional contract therapy services
provided by NuMED Rehabilitation exceeded the limits mandated by Medicare
prudent buyer principles. Management believes that the position taken by
the auditing fiscal intermediary is erroneous and intends to vigorously
contest any determination that disallows any portion of the fees paid to
NuMED Rehabilitation for professional services rendered in this case.
There can be no assurance that NuMED Rehabilitation will prevail in its
position on this matter. However, the Company has established an
estimated reserve of $765,000. In addition, the Company has secured a one
year $500,000 letter of credit, expiring on September 30, 1997, for future
potential disallowances. This letter of credit is secured by a
Certificate of Deposit. The Company's customer may utilize funds from the
letter of credit upon notification of additional adjustments by the
intermediary. An adverse determination by the fiscal intermediary could
require NuMED Rehabilitation to revise its estimate and further reimburse
this customer which could have a material adverse effect on the Company's
financial position, liquidity and results of operations.
The Company has a line of credit in the amount of $1.0 million.
Interest on this line accrues at a rate equal to the lender's certificate
of deposit rate plus 1.75%. The line of credit is secured by a $1.0
million certificate of deposit. Approximately $359,000 of this line was
utilized to pay the cash portion of the purchase price of the capital
stock of Parke. Approximately $201,000 was used to repurchase 100,000
shares of the Company's common stock on August 23, 1996 at a purchase
price of $2.01 per share. $439,000 of additional credit was utilized to
fund working capital and collaterize the letter of credit in connection
with the foregoing Medicare audit. The outstanding balance is due and
payable no later February 28, 1998.
The Company also has a $275,000 and a $150,000 line of credit.
Interest on the $275,000 line of credit accrues at a rate equal to the
lender's certificate of deposit rate plus 2%. Interest on the principal
balance outstanding on the $150,000 line of credit accrues at the prime
rate of interest plus 1/2%. Any outstanding balances existing under
either of the foregoing lines of credit are secured by accounts receivable
or certificates of deposit and other cash accounts. As of September 30,
1996, $25,000 was outstanding on the $150,000 line of credit and $262,000
was outstanding on the $275,000 line of credit. The Company is in
material compliance with all debt covenants under its lines of credit.
Parke Home Health Care currently has two lines of credit for $100,000
and $50,000. Interest accrues on each of the lines at the prime rate of
interest plus 1%. Any outstanding balances existing under either of the
foregoing lines of credit are secured by substantially all of Parke's
assets. As of September 30, 1996, there were no amounts outstanding under
either of Parke's lines of credit. Parke Home Health Care is in material
compliance with all debt covenants under its lines of credit.
The aggregate availability under all of the Company's various lines
of credit was approximately $288,000 at September 30, 1996.
Also, in connection with the Parke acquisition, the Company financed
50% of the acquisition with two 30 month term loans payable to the
previous owners of Parke. The aggregate outstanding principal balance on
the notes at September 30, 1996 was approximately $321,000. Interest
accrues on the Parke loans at the rate of eight percent (8%) per annum and
is secured by the outstanding stock of Parke purchased by the Company.
The Company's net income has been and will continue to be impacted
significantly by the non-cash charge of amortization expense of goodwill
and intangible assets of the Company. At September 30, 1996, net goodwill
and intangible assets of the Company were approximately $5.0 million.
The amortization of goodwill and intangible assets in the future will
decrease net income or increase any net loss.
The Company intends to implement a management information system for
its entire operation in fiscal 1997. The cost of the system is estimated
at $1.0 million of which $550,000 will be expended during the remainder of
fiscal 1997. Management intends to finance the system either with a lease
or with the use of existing cash over a period of 12-60 months. The
Company has entered into a contract totaling $142,000 for partial
installation. Twenty five percent of the contract was due at execution
and the remaining balance is payable in four installments with the last
payment due on March 1, 1997.
The Company is aggressively pursuing additional business and has
successfully replaced certain contracts lost during the prior discussions
involving the potential sale of the Company. In addition, the Company is
undertaking cost containment measures and evaluating alternative financing
arrangements to meet both its short and long-term cash requirements.
There can be no assurance that such containment measures will be
successful or that additional financing will be available. As a result,
it is uncertain at this time whether the Company will have sufficient
capital to meet its working capital needs during the immediate 12 month
period.
Part II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On January 31, 1996, Robin Fernhoff, individually and on behalf of
all others similarly situated filed a class action in the United States
District Court for the Middle District of Florida, Tampa Division against
NuMED Home Health Care, Inc., Jugal K. Taneja and A.T. Brod & Co., Inc.
(Case No. 96-200-CIV-T-21C). The plaintiff alleged that failure to
disclose the net capital position of A.T. Brod & Co., Inc. caused the
disclosure in the Company's prospectus dated February 8, 1995, to be
materially misleading. The plaintiff also alleged violations of Section
11 and 12(2) of the Securities Act of 1933, 15 U.S.C. Sections 77k and 77l
respectively, and sought damages on behalf of the class.
In response to the complaint, the Company filed its answer and a
corresponding motion to dismiss. On July 25, 1996, the United States
District Court for the Middle District of Florida, Tampa Division, granted
the Company's motion dismissing the complaint in its entirety. In
response, the Plaintiff filed a subsequent motion to alter or amend the
judgment granting the Company's motion to dismiss. The Court has not yet
ruled on this motion. Management believes that the action is frivolous
and without merit and intends to vigorously contest any restated
allegations.
Items 2 through 5. - Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
10(a) Amendment to Employment Contract by and between the Company
and Jugal Taneja dated September 30, 1996
10(b) Amendment to Employment Contract by and between the Company
and Susan Carmichael dated September 30, 1996
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the quarter ended September 30, 1996.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NuMED Home Health Care, Inc.
Date: November 11,1996 By: /s/Jugal K. Taneja
Jugal K. Taneja
Chairman of the Board,
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
10(a) Amendment to Employment Contract by and between the Company
and Jugal Taneja dated September 30, 1996
10(b) Amendment to Employment Contract by and between the Company
and Susan Carmichael dated September 30, 1996
27 Financial Data Schedule
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is made and
entered into this 30th day of September, 1996, by and between NuMED Home
Health Care, Inc., a Nevada corporation ("NuMED" or the "Company") and
Jugal K. Taneja ("Executive") currently holding the position of Chief
Executive Officer.
WHEREAS, NuMED and Executive entered into an Employment Agreement
("Agreement") dated September 1, 1995, which Agreement remains in full
force and effect; and
WHEREAS, NuMED and Executive believe that it is in the best interest
of NuMED to Amend the Agreement in order to eliminate certain provisions
that might be deemed contrary to the Company's present interest; and
WHEREAS, Executive is willing to eliminate the provision in question
in order to enhance the Company's long-term marketability;
NOW THEREFORE, in consideration of the terms and conditions set forth
in this Amendment, the parties agree as follows:
1. Section 7.8 of the Agreement is hereby deleted from the
Agreement and its terms and conditions are null and void.
2. The Executive acknowledges that NuMED owes no obligation to
Executive pursuant to Section 7.8 of the Agreement during the
time such provision was in effect.
3. In consideration for eliminating Section 7.8 and the obligations
imposed thereby, NuMED hereby awards to Executive Five Hundred
and Forty Thousand (540,000) warrants for the Company's Common
Stock on the following terms:
a. the warrant price is Two Dollars and
Seventy-Five Cents ($2.75) per share;
b. the warrants may be exercised at any time
during the term of the Agreement or any
extension or renewal of the Agreement; and,
c. any warrant outstanding and unexercised when
the term of the Employment Agreement, or any
extension thereof, concludes, is forfeited
and the executive has no rights thereto.
4. This Amendment encompasses the entire Amendment of the Agreement
by the parties to the Agreement and is the writing called for in
Section 11.1 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above-written.
EXECUTIVE NuMED HOME HEALTH CARE, INC.
/s/ Jugal K. Taneja By:/s/ Susan J. Carmichael
Jugal K. Taneja
Date: 9/30/96 Date: 9/30/96
<PAGE>
No. _______________ 540,000 Common Shares
COMMON STOCK PURCHASE WARRANT
NuMED HOME HEALTH CARE, INC.
Incorporated Under the Laws of the State of Nevada
This certifies that, for value received, Jugal K. Taneja, the
registered holder hereof or registered assigns (the "Holder"), is entitled
to purchase from NuMED Home Health Care, Inc., a Nevada corporation (the
"Company"), at any time after October 1, 1996 and prior to the termination
of the Employment Agreement dated September 1, 1995 by and between the
Holder and the Company, as amended by the First Amendment to the
Employment Contract dated October 1, 1996 (collectively referred herein at
the "Employment Agreement"), at the purchase price of $2.75 per share (the
"Warrant Price") the number of shares of Common Stock of the Company (the
"Common Stock"), which is equal to the number of Warrants set forth above.
The number of shares purchasable upon exercise of this Warrant and the
Warrant Price per share shall be subject to adjustment from time to time
as set forth below. Warrants which are unexercised and outstanding on the
expiration date or termination date of the Employment Agreement shall
expire and be cancelled and retired. This Warrant does not entitle any
Holder hereof to any of the rights of a shareholder of the Company.
1. Exercise. This Warrant may be exercised in whole or in part by
presentation of this Warrant with the Purchase Form attached to this
Warrant duly executed and simultaneous payment of the Warrant Price
(subject to adjustment) at the principal office of the Company. Payment of
such price shall be made at the option of the Holder hereof in cash or by
check or wire transfer, or any combination thereof. Upon any partial
exercise of this Warrant, there shall be countersigned and issued to the
Holder hereof a new Warrant in respect of the shares of Common Stock as to
which this Warrant shall not have been exercised. No fractional shares
will be issued upon the exercise of this Warrant, but the Company shall
pay the cash value of any fraction upon the exercise of one or more
Warrants.
2. Reservation of Warrant Shares. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the
exercise of the rights of purchase represented by the outstanding
Warrants. The Transfer Agent for the Common Stock and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon
the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose.
3. Adjustment of Warrant Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of each
Warrant and the Warrant Price shall be subject to adjustment from time to
time upon the happening of certain events, as hereinafter defined.
3.1 Mechanical Adjustments. The number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price
shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares
of Common Stock or make a distribution in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company, the number of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to
receive the kind and number of Warrant Shares or other
securities of the Company which the Holder would have owned or
have been entitled to receive after the happening of any of the
events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without
any charge to such holders, entitling them (for a period
expiring within thirty (30) days after the record date mentioned
below) to subscribe for or purchase shares of Common Stock at a
price per share which is lower at the record date mentioned
below than the then current market price per share of Common
Stock (as defined in paragraph (d) below), the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant
shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be (i) the number of
shares of Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be (ii) the number of shares of
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of shares which the
aggregate offering price of the total number of shares of Common
Stock so offered would purchase at the then current market price
per share of Common Stock (as defined in paragraph (d) below).
Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute to all holders of
its shares of Common Stock evidences of its indebtedness or
assets (excluding cash dividends or distributions payable out of
consolidated earnings or earned surplus and dividends or
distributions referred to in paragraph (a) above) or rights,
options or warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of
Common Stock (excluding those referred to in paragraph (1)
above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall
be determined by multiplying the number of Warrant Shares
theretofore purchasable upon the exercise of each Warrant, by a
fraction, of which the numerator shall be (i) the then current
market price per share of Common Stock (as defined in paragraph
(d) below) on the date of such distribution, and of which the
denominator shall be (ii) the then current market price per
share of Common Stock, less the then fair value (as determined
by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences
of indebtedness so distributed or of such subscription rights,
options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of distribution
retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(d) For the purpose of any computation under this Section,
the current or closing market price per share of Common Stock at
any date shall be the average of the daily closing prices for
fifteen (15) consecutive trading days commencing twenty (20)
trading days before the date of such computation. The closing
price for each day shall be the last reported sale price or, in
case no such reported sale takes place on such day, the average
of the closing bid and asked prices for such day, in either case
on the principal national securities exchange on which the
shares are listed or admitted to trading, or if they are not
listed or admitted to trading on any national securities
exchange, but are traded in the over-the-counter market, the
average of the representative closing bid and asked quotations
for the Common Stock on NASDAQ or any comparable system, or if
the Common Stock is not listed on NASDAQ or a comparable system,
the average of the closing bid and asked prices as furnished by
two members of the National Association of Securities Dealers,
Inc. selected from time to time by the Company for that purpose.
(e) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least 1% in the
number of Warrant Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which by reason
of this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-
thousandth of a share.
(f) Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as herein provided,
the Warrant Price payable upon exercise of each Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be
the number of Warrant Shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of Warrant Shares so
purchasable immediately thereafter.
(g) In case the Company shall sell and issue shares of
Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding (i) shares, rights,
options, warrants or convertible or exchangeable securities
issued in any of the transactions described in paragraphs (a),
(b) or (c) of this Section, (ii) shares issuable upon exercise
of stock options granted or to be granted to employees or
directors of the Company, provided that the number of shares so
excluded shall not exceed in the aggregate 200,000 shares,
subject to adjustment under the terms of such stock options,
(iii) the Warrant Shares, (iv) warrants to acquire shares of the
Common Stock issued to any underwriter of the Company's common
stock offered in a public offering; or (v) shares issued to
shareholders of any corporation which is acquired by, merged
into or becomes part of the Company or a subsidiary of the
Company in an arm's length transaction between the Company and
one or more unaffiliated third parties in proportion to their
stock holdings of any such corporation immediately prior to such
merger, upon such merger), at a price per share of Common Stock
(determined, in the case of such rights, options, warrants or
convertible or exchangeable securities, by dividing (i) the
total amount received or receivable by the Company in
consideration of the sale and issuance of such rights, options,
warrants or convertible or exchangeable securities, plus the
total consideration payable to the Company upon exercise or
conversion or exchange thereof, by (ii) the total number of
shares of Common Stock covered by such rights, options, warrants
or convertible or exchangeable securities) lower than the then
current market price per share of the Common Stock (as defined
in paragraph (d) above), then the Warrant Price shall be reduced
to a price (calculated to the nearest cent) determined by
multiplying the Warrant Price in effect immediately prior
thereto by a fraction, the numerator of which shall be (i) an
amount equal to the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such sale and issuance
plus (B) the number of shares of Common Stock which the
aggregate consideration received (determined as provided below)
for such sale or issuance would purchase at such current market
value per share, and the denominator of which shall be (ii) the
total number of shares of Common Stock outstanding immediately
after such sale and issuance. Such adjustment shall be made
successively whenever such an issuance is made. The number of
Warrant Shares purchasable upon the exercise of each Warrant
shall be that number determined by multiplying the number of
Warrant Shares issuable upon exercise immediately prior to such
adjustment by a fraction, of which the numerator is the Warrant
Price in effect immediately prior to such adjustment and the
denominator is the Warrant Price as so adjusted. For the
purposes of such adjustments, the shares of Common Stock which
the holder of any such rights, options, warrants, or convertible
or exchangeable securities shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the
date of such sale and issuance and the consideration received by
the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the consideration
or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares
of Common Stock covered thereby. In case the Company shall sell
and issue shares of Common Stock or rights, options, warrants or
convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock, for a
consideration consisting, in whole or in part, of property other
than cash or its equivalent, then in determining the "price per
share of Common Stock" and the "consideration received by the
Company" for purposes of the first sentence of this paragraph
(g), the Board of Directors shall determine, in its discretion,
the fair value of said property, and such determinations, if
made in good faith, shall be binding upon all Holders.
(h) For the purpose of this subsection 3.1, the term
"shares of Common Stock" shall mean (i) the class of stock
designated as the Common Stock of the Company at the date of
this Agreement, or (ii) any other class of stock resulting from
successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at
any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders shall become entitled to
purchase any shares of the Company other than shares of Common
Stock, thereafter the number of such other shares so purchasable
upon exercise of each Warrant and the Warrant Price of such
shares shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in
paragraphs (a) through (g), inclusive, above.
(i) Upon the expiration of any rights, options, warrants
or conversion or exchange privileges, if any thereof shall not
have been exercised, the Warrant Price and the number of shares
of Common Stock purchasable upon the exercise of each Warrant
shall, upon such expiration, be readjusted and shall thereafter
be such as it would have been had it been originally adjusted
(or had the original adjustment not been required, as the case
may be) as if (A) the only shares of Common Stock so issued were
the shares of Common Stock, if any, actually issued or sold upon
the exercise of such rights, options, warrants or conversion or
exchange rights and (B) such shares of Common Stock, if any,
were issued or sold for the consideration actually received by
the Company upon such exercise plus the aggregate consideration,
if any, actually received by the Company for the issuance, sale
or grant of all of such rights, options, warrants or conversion
or exchange rights whether or not exercised, provided, further,
that no such readjustment shall have the effect of increasing
the Warrant Price by an amount in excess of the amount of the
adjustment initially made in respect to the issuance, sale or
grant of such rights, options, warrants or conversion or
exchange rights.
3.2 Voluntary Adjustment by the Company. The Company may at its
option, at any time during the term of the Warrants, reduce the then
current Warrant Price to any amount deemed appropriate by the Board
of Directors of the Company.
3.3 Preservation of Purchase Rights Upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with
or merger of the Company into another corporation or in case of any
sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the Company
or such successor or purchasing corporation, as the case may be,
shall execute an agreement that each Holder shall have the right
thereafter upon payment of the Warrant Price in effect immediately
prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he
would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale or conveyance had such Warrant
been exercised immediately prior to such action. Such agreement shall
provide for adjustments, which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 3. The
provisions of this Section 3.3 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
4. Assignment and Successors. This Warrant shall be assignable by
each of the Company and Holder. All covenants and provisions of this
Agreement by or for the benefit of the Company or the Holder shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
5. Merger or Consolidation of the Company. The Company will not
merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the
Company) shall expressly assume the due and punctual performance and
observance of each and every covenant and condition of this Agreement to
be performed and observed by the Company.
6. Applicable Law. This Agreement and each Warrant issued hereunder
shall be governed by and construed in accordance with the laws of the
State of Florida without giving effect to principles of conflict of laws.
7. Entire Agreement/Amendment. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
undertakings of every kind and nature between the parties with respect to
the subject matter of this Agreement. Except as amended by this Amendment,
all other provisions of the Agreement shall remain in full force and
effect. The Agreement or this Amendment shall not be further changed,
modified, cancelled or amended except by writings signed by both parties.
8. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Witness the facsimile seal of the Company and the facsimile
signatures of its duly authorized officers.
/s/ Jugal K. Taneja NuMED Home Health Care, Inc.
Jugal K. Taneja
By:/s/ Susan J. Carmichael
Chief Executive Officer
Attest:/s/ Kimberlee Andrews
<PAGE>
NuMED HOME HEALTH CARE, INC.
WARRANT PURCHASE FORM
Number of Warrants exercised ______________________________.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for, and to purchase
thereunder, shares of the stock provided for therein, and requests that
certificates for such shares be issued in the name of:
(Please Print Name, Address and Social Security No.)
and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant Certificate for the balance remaining of
the shares purchasable under the within Warrant Certificate be registered
in the name of the undersigned Holder or his Assignee as below indicated
and delivered to the address stated below.
DATED: _________________, 199__
Name of Warrantholder or Assignee:____________________________________
(Please Print)
Address:
Signature:
Signature Guaranteed: NOTE: The above signature must correspond
with the name as written upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatever, unless
this Warrant has been assigned.
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is made and
entered into this 30th day of September, 1996, by and between NuMED Home
Health Care, Inc., a Nevada corporation ("NuMED" or the "Company") and
Susan J. Carmichael ("Executive") currently holding the position of
President.
WHEREAS, NuMED and Executive entered into an Employment Agreement
("Agreement") dated September 1, 1995, which Agreement remains in full
force and effect; and
WHEREAS, NuMED and Executive believe that it is in the best interest
of NuMED to Amend the Agreement in order to eliminate certain provisions
that might be deemed contrary to the Company's present interest: and
WHEREAS, Executive is willing to eliminate the provision in question
in order to enhance the company's long-term marketability;
NOW THEREFORE, in consideration of the terms and conditions set forth
in this Amendment, the parties agree as follows:
1. Section 7.7 of the Agreement is hereby deleted from the
Agreement and its terms and conditions are null and void.
2. The Executive acknowledges that NuMED owes no obligation to
Executive pursuant to Section 7.7 of the Agreement during the
time such provision was in effect.
3. In consideration for eliminating Section 7.7 and the obligations
imposed thereby, NuMED hereby awards to Executive Two Hundred
Seventy Thousand (270,000) warrants for the Company's Common
Stock on the following terms:
a. the warrant price is Two Dollars and
Seventy-five Cents ($2.75) per share;
b. the warrants may be exercised at any time
during the term of the Agreement or any
extension or renewal of the Agreement; and,
c. any warrant outstanding and unexercised when
the term of the Employment Agreement, or any
extension thereof, concludes, is forfeited
and the executive has no rights thereto.
4. This Amendment encompasses the entire Amendment of the Agreement
by the parties to the Agreement and is the writing called for in
Section 11.1 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above-written.
EXECUTIVE NuMED HOME HEALTH CARE, INC.
/s/ Susan J. Carmichael By:/s/ Jugal K. Taneja
Susan J. Carmichael
Date: 9/30/96 Date: 9/30/96
<PAGE>
No. _________________ 270,000 Common Shares
COMMON STOCK PURCHASE WARRANT
NuMED Home Health Care, Inc.
Incorporated Under the Laws of the State of Nevada
This certifies that, for value received, Susan J. Carmichael, the
registered holder hereof or registered assigns (the "Holder"), is entitled
to purchase from NuMED Home Health Care, Inc., a Nevada corporation (the
"Company"), at any time after October 1, 1996 and prior to the termination
of the Employment Agreement dated September 1, 1995 by and between the
Holder and the Company, as amended by the First Amendment to the
Employment Contract dated October 1, 1996 (collectively referred herein as
the "Employment Agreement"), at the purchase price of $2.75 per share (the
"Warrant Price") the number of shares of Common Stock of the Company (the
"Common Stock"), which is equal to the number of Warrants set forth above.
The number of shares purchasable upon exercise of this Warrant and the
Warrant Price per share shall be subject to adjustment from time to time
as set forth below. Warrants which are unexercised and outstanding on the
expiration date or termination date of the Employment Agreement shall
expire and be cancelled and retired. This Warrant does not entitle any
Holder hereof to any of the rights of a shareholder of the Company.
1. Exercise. This Warrant may be exercised in whole or in part by
presentation of this Warrant with the Purchase Form attached to this
Warrant duly executed and simultaneous payment of the Warrant Price
(subject to adjustment) at the principal office of the Company. Payment of
such price shall be made at the option of the Holder hereof in cash or by
check or wire transfer, or any combination thereof. Upon any partial
exercise of this Warrant, there shall be countersigned and issued to the
Holder hereof a new Warrant in respect of the shares of Common Stock as to
which this Warrant shall not have been exercised. No fractional shares
will be issued upon the exercise of this Warrant, but the Company shall
pay the cash value of any fraction upon the exercise of one or more
Warrants.
2. Reservation of Warrant Shares. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the
exercise of the rights of purchase represented by the outstanding
Warrants. The Transfer Agent for the Common Stock and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon
the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose.
3. Adjustment of Warrant Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of each
Warrant and the Warrant Price shall be subject to adjustment from time to
time upon the happening of certain events, as hereinafter defined.
3.1 Mechanical Adjustments. The number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price
shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares
of Common Stock or make a distribution in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by
reclassification of its shares of Common Stock other securities
of the Company, the number of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to
receive the kind and number of Warrant Shares or other
securities of the Company which the Holder would have owned or
have been entitled to receive after the happening of any of the
events described above, had such Warrant been exercised
immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if
any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without
any charge to such holders, entitling them (for a period
expiring within thirty (30) days after the record date mentioned
below) to subscribe for or purchase shares of Common Stock at a
price per share which is lower at the record date mentioned
below than the then current market price per share of Common
Stock (as defined in paragraph (d) below), the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant
shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be (i) the number of
shares of Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and
of which the denominator shall be (ii) the number of shares of
Common Stock outstanding on the date of issuance of such rights,
options or warrants plus the number of shares which the
aggregate offering price of the total number of shares of Common
Stock so offered would purchase at the then current market price
per share of Common Stock (as defined in paragraph (d) below).
Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such rights, options or
warrants.
(c) In case the Company shall distribute to all holders of
its shares of Common Stock evidences of its indebtedness or
assets (excluding cash dividends or distributions payable out of
consolidated earnings or earned surplus and dividends or
distributions referred to in paragraph (a) above) or rights,
options or warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of
Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall
be determined by multiplying the number of Warrant Shares
theretofore purchasable upon the exercise of each Warrant, by a
fraction, of which the numerator shall be (i) the then current
market price per share of Common Stock (as defined in paragraph
(d) below) on the date of such distribution, and of which the
denominator shall be (ii) the then current market price per
share of Common Stock, less the then fair value (as determined
by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences
of indebtedness so distributed or of such subscription rights,
options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of distribution
retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(d) For the purpose of any computation under this Section,
the current or closing market price per share of Common Stock at
any date shall be the average of the daily closing prices for
fifteen (15) consecutive trading days commencing twenty (20)
trading days before the date of such computation. The closing
price for each day shall be the last reported sale price or, in
case no such reported sale takes place on such day, the average
of the closing bid and asked prices for such day, in either case
on the principal national securities exchange on which the
shares are listed or admitted to trading, or if they are not
listed or admitted to trading on any national securities
exchange, but are traded in the over-the-counter market, the
average of the representative closing bid and asked quotations
for the Common Stock on NASDAQ or any comparable system, or if
the Common Stock is not listed on NASDAQ or a comparable system,
the average of the closing bid and asked prices as furnished by
two members of the National Association of Securities Dealers,
Inc. selected from time to time by the Company for that purpose.
(e) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least 1% in the
number of Warrant Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which by reason
of this paragraph (e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-
thousandth of a share.
(f) Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as herein provided,
the Warrant Price payable upon exercise of each Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be
the number of Warrant Shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of Warrant Shares so
purchasable immediately thereafter.
(g) In case the Company shall sell and issue shares of
Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding (i) shares, rights,
options, warrants or convertible or exchangeable securities
issued in any of the transactions described in paragraphs (a),
(b) or (c) of this Section, (ii) shares issuable upon exercise
of stock options granted or to be granted to employees or
directors of the Company, provided that the number of shares so
excluded shall not exceed in the aggregate 200,000 shares,
subject to adjustment under the terms of such stock options,
(iii) the Warrant Shares, (iv) warrants to acquire shares of the
Common Stock issued to any underwriter of the Company's common
stock offered in a public offering; or (v) shares issued to
shareholders of any corporation which is acquired by, merged
into or becomes part of the Company or a subsidiary of the
Company in an arm's length transaction between the Company and
one or more unaffiliated third parties in proportion to their
stock holdings of any such corporation immediately prior to such
merger, upon such merger), at a price per share of Common Stock
(determined, in the case of such rights, options, warrants or
convertible or exchangeable securities, by dividing (i) the
total amount received or receivable by the Company in
consideration of the sale and issuance of such rights, options,
warrants or convertible or exchangeable securities, plus the
total consideration payable to the Company upon exercise or
conversion or exchange thereof, by (ii) the total number of
shares of Common Stock covered by such rights, options, warrants
or convertible or exchangeable securities) lower than the then
current market price per share of the Common Stock (as defined
in paragraph (d) above), then the Warrant Price shall be reduced
to a price (calculated to the nearest cent) determined by
multiplying the Warrant Price in effect immediately prior
thereto by a fraction, the numerator of which shall be (i) an
amount equal to the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such sale and issuance
plus (B) the number of shares of Common Stock which the
aggregate consideration received (determined as provided below)
for such sale or issuance would purchase at such current market
value per share, and the denominator of which shall be (ii) the
total number of shares of Common Stock outstanding immediately
after such sale and issuance. Such adjustment shall be made
successively whenever such an issuance is made. The number of
Warrant Shares purchasable upon the exercise of each Warrant
shall be that number determined by multiplying the number of
Warrant Shares issuable upon exercise immediately prior to such
adjustment by a fraction, of which the numerator is the Warrant
Price in effect immediately prior to such adjustment and the
denominator is the Warrant Price as so adjusted. For the
purposes of such adjustments, the shares of Common Stock which
the holder of any such rights, options, warrants, or convertible
or exchangeable securities shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the
date of such sale and issuance and the consideration received by
the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the consideration
or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares
of Common Stock covered thereby. In case the Company shall sell
and issue shares of Common Stock or rights, options, warrants or
convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock, for a
consideration consisting, in whole or in part, of property other
than cash or its equivalent, then in determining the "price per
share of Common Stock" and the "consideration received by the
Company" for purposes of the first sentence of this paragraph
(g), the Board of Directors shall determine, in its discretion,
the fair value of said property, and such determinations, if
made in good faith, shall be binding upon all Holders.
(h) For the purpose of this subsection 3.1, the term
"shares of Common Stock" shall mean (i) the class of stock
designated as the Common Stock of the Company at the date of
this Agreement, or (ii) any other class of stock resulting from
successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at
any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders shall become entitled to
purchase any shares of the Company other than shares of Common
Stock, thereafter the number of such other shares so purchasable
upon exercise of each Warrant and the Warrant Price of such
shares shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in
paragraphs (a) through (g), inclusive, above.
(i) Upon the expiration of any rights, options, warrants
or conversion or exchange privileges, if any thereof shall not
have been exercised, the Warrant Price and the number of shares
of Common Stock purchasable upon the exercise of each Warrant
shall, upon such expiration, be readjusted and shall thereafter
be such as it would have been had it been originally adjusted
(or had the original adjustment not been required, as the case
may be) as if (A) the only shares of Common Stock so issued were
the shares of Common Stock, if any, actually issued or sold upon
the exercise of such rights, options, warrants or conversion or
exchange rights and (B) such shares of Common Stock, if any,
were issued or sold for the consideration actually received by
the Company upon such exercise plus the aggregate consideration,
if any, actually received by the Company for the issuance, sale
or grant of all of such rights, options, warrants or conversion
or exchange rights whether or not exercised, provided, further,
that no such readjustment shall have the effect of increasing
the Warrant Price by an amount in excess of the amount of the
adjustment initially made in respect to the issuance, sale or
grant of such rights, options, warrants or conversion or
exchange rights.
3.2 Voluntary Adjustment by the Company. The Company may at its
option, at any time during the term of the Warrants, reduce the then
current Warrant Price to any amount deemed appropriate by the Board
of Directors of the Company.
3.3 Preservation of Purchase Rights Upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with
or merger of the Company into another corporation or in case of any
sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the Company
or such successor or purchasing corporation, as the case may be,
shall execute an agreement that each Holder shall have the right
thereafter upon payment of the Warrant Price in effect immediately
prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he
would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale or conveyance had such Warrant
been exercised immediately prior to such action. Such agreement shall
provide for adjustments, which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 3. The
provisions of this Section 3.3 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
4. Assignment and Successors. This Warrant shall be assignable by
each of the Company and Holder. All covenants and provisions of this
Agreement by or for the benefit of the Company or the Holder shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
5. Merger or Consolidation of the Company. The Company will not
merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the
Company) shall expressly assume the due and punctual performance and
observance of each and every covenant and condition of this Agreement to
be performed and observed by the Company.
6. Applicable Law. This Agreement and each Warrant issued hereunder
shall be governed by and construed in accordance with the laws of the
State of Florida without giving effect to principles of conflict of laws.
7. Entire Agreement/Amendment. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
undertakings of every kind and nature between the parties with respect to
the subject matter of this Agreement. Except as amended by this Amendment,
all other provisions of the Agreement shall remain in full force and
effect. The Agreement or this Amendment shall not be further changed,
modified, cancelled or amended except by writings signed by both parties.
8. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Witness the facsimile seal of the Company and the facsimile
signatures of its duly authorized officers.
/s/ Susan J. Carmichael NuMED Home Health Care, Inc.
Susan J. Carmichael
By:/s/ Jugal K. Taneja
Chief Executive Officer
Attest:/s/ Kimberlee Andrews
<PAGE>
NuMED HOME HEALTH CARE, INC.
WARRANT PURCHASE FORM
Number of Warrants exercised ______________________________.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for, and to purchase
thereunder, shares of the stock provided for therein, and requests that
certificates for such shares be issued in the name of:
(Please Print Name, Address and Social Security No.)
and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant Certificate for the balance remaining of
the shares purchasable under the within Warrant Certificate be registered
in the name of the undersigned Holder or his Assignee as below indicated
and delivered to the address stated below.
DATED: _________________, 199__
Name of Warrantholder or Assignee:____________________________________
(Please Print)
Address:
Signature:
Signature Guaranteed: NOTE: The above signature must correspond
with the name as written upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatever, unless
this Warrant has been assigned.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 931,514
<SECURITIES> 0
<RECEIVABLES> 5,213,266
<ALLOWANCES> 0
<INVENTORY> 26,274
<CURRENT-ASSETS> 8,311,821
<PP&E> 396,611
<DEPRECIATION> (162,317)
<TOTAL-ASSETS> 13,562,246
<CURRENT-LIABILITIES> 4,145,308
<BONDS> 0
0
0
<COMMON> 5,010
<OTHER-SE> 8,839,131
<TOTAL-LIABILITY-AND-EQUITY> 13,562,246
<SALES> 0
<TOTAL-REVENUES> 12,565,513
<CGS> 0
<TOTAL-COSTS> 9,736,908
<OTHER-EXPENSES> 3,272,452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,181,076)
<INCOME-TAX> 11,761
<INCOME-CONTINUING> (1,192,837)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,192,837)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> 0
</TABLE>
