US HOMECARE CORP, S-3, 1996-05-30

US HOMECARE CORP
S-3, 1996-05-30
HOME HEALTH CARE SERVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 30, 1996

Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

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U.S. HOMECARE CORPORATION
(Exact name of Registrant as specified in its charter)

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New York 13-2853680
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

750 Main Street
Hartford, Connecticut 06103
(860) 278-7242
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

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G. Robert O'Brien
President, Chief Executive Officer and Director
U.S. HomeCare Corporation
750 Main Street
Hartford, CT 06103
(860) 278-7242

(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)

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Copies to:
Ellen B. Corenswet, Esq.
Luci Staller Altman, Esq.
Brobeck, Phleger & Harrison LLP
1301 Avenue of the Americas
New York, New York 10019

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Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement becomes effective.

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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment 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

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. | |

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. | |

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. | |

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE

====================================================================================================================================
Title of each Class of Proposed Maximum Offering Proposed Maximum Amount of
Security being registered Amount being Registered Price Per Share(1) Aggregate Offering Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value (2) 8,798,058 Shares $2.28125 $20,070,570 $6,921
====================================================================================================================================
</TABLE>

(1) Estimated pursuant to Rule 457(c) solely for the purpose of computing the
registration fee based upon the average of the high and low prices of the
Common Stock, as reported on the Nasdaq National Market as of a date which
is within five business days of the date of this Registration Statement.

(2) Pursuant to Rule 416, there are also being registered such indeterminable
additional securities as may be issued as a result of anti-dilution
provisions.

---------------------------

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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.

================================================================================

<PAGE>

PROSPECTUS

8,798,058 Shares

U.S. HOMECARE CORPORATION

Common Stock

---------------------------

This Prospectus relates to the public offering, which is not being
underwritten, of up to 8,798,058 shares of Common Stock, par value $.01 per
share (the "Common Stock"), of U.S. HomeCare Corporation ("U.S. HomeCare" or the
"Company"). Of these shares, 2,074,996 shares ("Warrant Shares") are issuable by
the Company upon the exercise of outstanding warrants (each, a "Warrant"),
6,571,380 shares ("Preferred Shares") are issuable upon conversion of the
Company's $35.00 6% Convertible Preferred Stock (the "$35.00 Preferred Stock"),
and 151,682 shares ("Dividend Shares") have been issued as of September 30,
1995. The Warrant Shares, Preferred Shares, and Dividend Shares (collectively,
the "Shares") may be offered by holders of the Dividend Shares and by current
holders of the $35.00 Preferred Stock and Warrants who subsequently convert such
$35.00 Preferred Stock or exercise such Warrants (collectively, the "Selling
Shareholders").

The Shares may be offered by the Selling Shareholders from time to time in
transactions on the Nasdaq National Market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). To the extent required, the specific
Shares to be sold, the names of the Selling Shareholders, the public offering
price, the names of any such agent, dealer or underwriter, and any applicable
commission or discount with respect to any particular offer will be set forth in
an accompanying Prospectus Supplement. See "Selling Shareholders" and "Plan of
Distribution."

None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. Upon the issuance of all of the
Warrant Shares, the Company will receive aggregate proceeds of up to $3,631,243.
See "Issuance of the Warrant Shares and Use of Proceeds." The Company has agreed
to bear certain expenses (other than selling commissions and fees and expenses
of certain advisors to the Selling Shareholders) in connection with the
registration of the Shares. The Company has agreed to indemnify certain of the
Selling Shareholders and their affiliates against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Certain of the Selling Shareholders have agreed to indemnify the Company and its
affiliates against certain liabilities, including liabilities under the
Securities Act under certain circumstances.

AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 3.

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The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "USHO." The last reported sale price of the Company's Common
Stock on the Nasdaq National Market on May 17, 1996 was $2.125 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.

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The date of this Prospectus is May 30, 1996

<PAGE>

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company, any Selling Shareholder or by any other person. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any time
subsequent to the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the Shares to any person or by anyone
in any jurisdiction in which such offer or solicitation may not lawfully be
made.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act (the
"Registration Statement") with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and the schedules thereto. For further information
with respect to the Company and such Common Stock, reference is made to the
Registration Statement and exhibits and schedules thereto. Statements contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily complete, and, with respect to any contract or other
document filed as an exhibit to the Registration Statement, each such statement
is qualified in all respects by reference to such exhibit. Copies of the
Registration Statement and the exhibits thereto are on file at the offices of
the Commission and may be obtained upon payment of the prescribed fee or may be
examined without charge at the public reference facilities of the Commission
described below.

The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected, and copies of such material may be obtained upon
payment of the prescribed fees, at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, as well as at the
Commission's Regional Offices at Seven World Trade Center, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained in person from the
Public Reference Section of the Commission at its principal office located at
450 Fifth Avenue, N.W., Washington, D.C. 20549, upon payment of the prescribed
fees.

The Common Stock of the Company is traded on the Nasdaq National Market.
Reports, proxy statements and other information concerning the Company may be
inspected at the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.

INFORMATION INCORPORATED BY REFERENCE

The following document filed with the Commission is hereby incorporated by
reference in this Prospectus and shall be deemed to be part hereof: (1) the
Annual Report of the Company on Form 10-K for the fiscal year ended December 31,
1995 (the "1995 Form 10-K"); (2) the Quarterly Report of the Company on Form
10-Q for the quarter ended March 31, 1996 (the "Form 10-Q"); and (3) the Proxy
Statement of the Company dated May 14, 1996 in connection with the Annual
Meeting of Shareholders to be held on June 6, 1996 (the "Proxy Statement").

All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement incorporated 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 which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any 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 to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by

<PAGE>

reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such document). Requests for such
documents should be submitted in writing to the Secretary, U.S. HomeCare
Corporation, 750 Main Street, Hartford, Connecticut 06103.

THE COMPANY

The Company was incorporated in New York in April 1986. The Company's
principal offices are located at 750 Main Street, Hartford, Connecticut 06103
and its telephone number is (860) 278-7242.

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk and should not be made by any investors who cannot afford the
loss of their entire investment. In addition, this Prospectus contains certain
statements of a forward-looking nature relating to future events or the future
financial performance of the Company. Prospective investors are cautioned that
such statements are only predictions and that actual events or results may
differ materially. In evaluating such statements and in making any investment
decisions, prospective investors should specifically consider the various
factors identified in this Prospectus, including the matters set forth in this
"Risk Factors" section, which could cause actual results to differ materially
from those indicated by such forward-looking statements.

History of Losses and Decline in Revenues

The Company incurred net losses of $1.8 million, $26.8 million and $7.1
million for the years ended December 31, 1995, 1994 and 1993, respectively. In
1995, the Company reported net revenues of $71.2 million compared with net
revenues of $79.1 million in 1994 and $90.1 million in 1993. The Company made
provisions for restructuring, bad debt allowances, and Medicare cost report
adjustments and assessments during 1993 and 1994, which adversely affected
revenues and profits. The provisions for restructuring and Medicare cost report
adjustments and assessments which required cash payments during 1995 that will
continue primarily through 1996. The decline in the Company's net revenues from
1994 to 1995 resulted primarily from a decline of $8.4 million from infusion
therapy services as a result of the implementation of more stringent standards
for accepting new patients and from intense competition in infusion therapy
services. The Company's operating losses and the decline in the Company's
revenues from 1993 to 1994 were primarily attributable to a $2.0 million
reduction in infusion therapy revenues as well as a $9.0 million decline in
revenues from its South Florida operations and development offices, all of which
have been sold or closed. There can be no assurance that the Company's revenues
will increase in the future. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 1995 Form 10-K.

Negative Operating Cash Flow

In order to fund operations during 1994 and 1995, the Company issued
securities and borrowed funds. The cash flow from operations has not been
sufficient to meet its debt service and other obligations. The cash flow from
operations disclosed in the December 31, 1993 and 1994 Consolidated Statement of
Cash Flows were positive, primarily from the sale of receivables pursuant to the
Company's Receivables Purchase and Servicing Agreement (the "Securitization
Program"). Borrowings under the Securitization Program reduced the availability
under the Company's revolving line of credit (the "RLOC"). The Company continues
to operate under severe cash flow pressure primarily because collections of
accounts receivable have not met expectations and extraordinary payments have
been required for professional fees, continuing Medicare settlements in Florida
and cash requirements related to closed operations. Although the Company has
reduced on-going overhead and has slowed payments to vendors since 1994,
operating cash out-flows continued to outpace in-flows through 1995. In the
event that the Company experiences continuing negative cash flow, the Company
may need additional external financing to meet its working capital requirements.
There can be no assurance that the Company will have sufficient funds to pay its
debt obligations when they become due in March 1997 or to pay vendors on a
timely basis or that it will achieve positive

<PAGE>

operating cash flow in the future. See "Management's Discussion and Analysis of
Financial Condition" and "Results of Operations" in the 1995 Form 10-K.

History of Noncompliance with Financial Covenants under the Company's Financing
Facilities

The Company's $9.0 million RLOC and its $3.0 million subordinated credit
facility (the "Subordinated Credit Facility") include certain financial
covenants. Should the Company fail to comply with any of these covenants, the
banks and the Connecticut Development Authority (the "CDA"), which guaranteed
the Subordinated Credit Facility, would have the right to declare the amounts
outstanding under the RLOC and the Subordinated Credit Facility, as well as the
amounts outstanding under the Securitization Program, immediately due and
payable upon notice. Several times in the past, the Company has not been in
compliance with certain of these covenants but obtained waivers from the banks.
If the Company does not remain in compliance with its financial covenants in the
future, there can be no assurance that the banks will grant waivers or otherwise
refrain from declaring a default under the RLOC, the Credit Facility or the
Securitization Program. No assurance can be given that if the banks declared the
Company to be in default of its obligations to them, the Company would be able
to obtain a substitute line of credit or other additional external financing or
that, if obtained, such financing would be on terms favorable to the Company.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the 1995 Form 10-K.

Possible Need for Additional Financing

The Company relies on accounts receivable financing to fund working capital
for current operations. If the Company continues to experience negative cash
flow, the Company may need additional external financing to meet its working
capital requirements. There can be no assurance that such financing will be
available when needed or, if available, that it will be available on terms
acceptable to the Company.

Collectibility of Accounts Receivable; Adequacy of Billing and Collections
Process

The Company wrote off or reserved significant amounts with respect to its
accounts receivable in 1995 largely related to its closed operations. During
1995, the Company revised its methodology for determining appropriate reserves
for uncollectible accounts, which was $3.0 million at December 31, 1995. The
Company has also increased the amount of allowances and contractual discounts it
records with respect to certain infusion therapy receivables, which reserves are
based on the Company's estimate of collectible amounts. However, there can be no
assurance that actual collections of accounts receivable will not differ from
the amounts recorded and/or the projected timing of those collections.
Furthermore, the Company has experienced problems with its billing and
collection systems and procedures and has begun to upgrade its systems. There
can be no assurance that such upgrade will be successfully accomplished or, if
accomplished, will improve collections. Failure to collect existing and future
accounts receivable could result in further cash flow problems. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in 1995 Form 10-K.

Relationships with Referral Sources

The development and growth of the Company's business depends to a
significant extent on its ability to establish and maintain close working
relationships with home care and social service agencies, hospitals, clinics,
nursing homes, physicians and physician groups, health maintenance organizations
and other health care providers. There can be no assurance that the Company's
existing relationships with these referral sources will be successfully
maintained or that additional relationships will be successfully developed and
maintained. In March 1994, VNS HomeCare ("VNS"), a non-profit home health care
institution in New York City, informed the Company that it intended to reduce
the Company's overall caseload. Consequently, the Company's net revenues
attributable to VNS declined from $11.9 million (13%) for the year ended
December 31, 1993 to $8.8 million (11%) for the year ended December 31, 1994,
and to $6.2 million (8.7%) for the year ended December 31, 1995. The Company has
met

<PAGE>

with VNS representatives to address VNS' concerns and to review the Company's
performance. The Company's performance ratings with VNS have improved
significantly and the Company believes that its VNS caseload has stabilized and
may increase over time. However, there can be no assurance that this will occur
or that net revenues from this relationship will return to their previous
levels. The Company's continuing financial difficulties may also adversely
affect its relationships with referral sources in the future.

Uncertainties Associated with the Company's Restructuring Program

In the third quarter of 1994, the Company adopted a restructuring plan to
improve profitability and competitiveness and established a restructuring
reserve of $7.65 million to reflect the estimated costs of implementing this
plan. The restructuring plan encompassed management changes, additional equity
financing, cessation of Florida operations, consolidation of the Company's
infusion therapy operations and closing of development offices. Even with the
sale of the Florida operations which was consummated in December 1995, the
Company may incur additional liabilities or be required to make further
adjustments to its financial statements as a result of its past operations in
Florida. In addition, the costs associated with closing the development offices
and certain of its pharmacy operations could prove to be greater than
anticipated. There can be no assurance that the Company will be able to fully
implement its restructuring plan or that, even if successfully implemented, such
strategy will ultimately prove effective in returning the Company to
profitability.

Dependence on Reimbursement by Third Party Payors

A substantial portion of the Company's revenues are derived from
government-sponsored health care programs, particularly New York State Medicaid
and the federal Medicare program. Although direct payments from New York State
Medicaid are not significant, the Company derives significant revenues
indirectly from the Medicaid program through contracts with local government
agencies, such as the Department of Social Services of Westchester County, and
through referrals from Medicare-certified non-profit institutions such as VNS.
As a result, the Company would likely be adversely affected by any rate freezes,
payment delays, cutbacks in coverage or any other adverse actions taken by New
York State and there can be no assurance that such actions will not be taken in
the future.

Governmental and third-party payors have taken extensive steps intended to
contain or reduce payments made to health care providers such as the Company.
These steps have included, among others, changes in reimbursement methodologies,
changes in services covered, increased utilization review of services,
negotiated prospective or discounted contract pricing and adoption of a
competitive bid approach to service contracts. Managed care and related cost
containment efforts are expected to continue in the future. Home health care,
which is generally less costly than hospital-based care, has generally
benefitted from many of these cost containment efforts. As expenditures in the
home health care market continue to grow, however, initiatives aimed at reducing
the cost of health care delivery at non-hospital sites are increasing. For
example, several state Medicaid programs, in an effort to contain the cost of
health care and in light of state budgetary constraints, have reduced their
payment rates and have narrowed the scope of covered services. Such initiatives
are expected to continue in the future. A significant change in coverage or a
reduction in payment rates for the types of health care services provided by the
Company could have a material adverse effect upon the Company's business and
results of operations.

For each office in which the Company is certified to participate in the
Medicare program, the Company is required to file annual cost reports to
establish its reimbursement rate per Medicare visit for that office. Such
reimbursement rates are subject to audit and retroactive adjustment by the
Medicare fiscal intermediaries for the geographic areas in which the Company's
Medicare-certified offices are located. The Company's Medicare cost reports for
its now discontinued Florida operations were audited by Aetna, the Florida
Medicare fiscal intermediary, for fiscal years (which end June 30 of each year)
through 1993 and, for fiscal year 1993, Aetna made material adjustments to the
Company's reimbursement rate per visit. As a result, the Company was assessed
significant amounts for overpayments made by Aetna for visits that were
disallowed for reimbursement and had its prospective reimbursement rate reduced
based on that audit. These actions had a material adverse effect on the
Company's financial condition and results of operations in 1993 and 1994. The
cost reports filed by the Company for the fiscal

<PAGE>

year ended June 30, 1994, the calendar year ended December 31, 1994 (on July 1,
1994, the Company commenced filing cost reports on a calendar year basis) and
the calendar year ended December 31, 1995 have not yet been settled with Aetna
or with any of the Company's other fiscal intermediaries for its other
operations. The Company took certain actions which it believes lessened the
likelihood that it will experience material adjustments to its unaudited cost
reports for its Medicare operations. These actions include the creation in the
third quarter of 1994 of a $380,000 reserve for future cost report adjustments
and a series of interim cost reports filed during the course of calendar 1995
which in certain cases resulted in adjustments to its prospective reimbursement
rates for calendar 1995. However, there can be no assurance that audits of the
fiscal 1994 and calendar 1994 and 1995 cost reports will not result in future
material assessments against the Company or reductions in revenues recorded and
not yet reimbursed.

Part of the Company's strategy is to increase its business with third party
payors involved in managed care, such as health maintenance organizations and
preferred provider organizations. An increase in these contracts could reduce
the profit margin for the Company's business because managed care payors
typically reimburse at lower rates and limit service coverage to a greater
extent than other non-governmental third party payors, such as indemnity
insurance providers. The Company is unable to predict how quickly, if at all,
its managed care business will increase and whether increased business in this
segment will have a material effect on the Company's business or results of
operations.

Potential Adverse Effect of Litigation

In July 1993, in HIPS v. USHC Infusion, et al., Index No. 117835/93
(Supreme Court, State of New York, New York County), Home Infusion
Pharmaceutical Services, Inc. ("HIPS") sued, on a motion for summary judgment in
lieu of complaint, to enforce the payment of promissory notes in the face amount
of $4.5 million and approximately $880,000 in consulting fees in connection with
the acquisition (the "Acquisition") of assets (or an interest therein) from HIPS
and its affiliate Abel Health Management Services, Inc. (collectively
"HIPS/Abel") and their principal, Edward J. Abel ("Abel"). In September 1994,
the Court denied HIPS's motion for summary judgment and instructed HIPS to bring
a plenary suit on the promissory notes. In October 1994, HIPS brought such a
suit and Abel joined in the suit, seeking payment on the consulting agreement.
In November 1994, the Company answered the complaint and counterclaimed for
rescission of the Acquisition, fraudulent inducement, fraud, breach of contract,
breach of the covenant of good faith and fair dealing, and for a declaratory
judgment relieving it of any further purported obligations in connection with
the Acquisition. In September 1995, HIPS moved to dismiss certain of the
Company's counterclaims. On February 29, 1996 the Court denied HIPS's motion,
except that it struck the Company's request for the imposition of punitive
damages. Although the Company believes that its position in the HIPS/Abel
litigation is meritorious, the ultimate outcome of this matter cannot presently
be determined and there can be no assurance that such outcome would not have a
material adverse effect on the Company's operations and financial condition. A
reserve has been established in the Company's consolidated financial statements
for specified amounts in connection with the resolution of this matter.

A second litigation proceeding, Kingsland Associates v. Abel Health
Management Services, Inc. and U.S. HomeCare Infusion Therapy Products
Corporation, Index No. 14294/93 (Supreme Court of the State of New York, Nassau
County), also arises from the Acquisition. Based on the Asset Purchase Agreement
provision regarding USHC Infusion's assumption of certain liabilities in
connection with the Acquisition, Abel Health Management Services, Inc. ("AHMS")
has impleaded USHC Infusion into these cases brought by Kingsland Associates
("Kingsland") in connection with AHMS's abandonment of three suites of offices.
Kingsland has also asserted a claim directly against USHC Infusion. Kingsland
seeks damages in excess of $50,000, approximately $325,000 in rent, attorneys'
fees and rent escalation amounts. USHC Infusion filed an answer on November 5,
1993, asserting, among other defenses, that because of AHMS's breaches of
contract and torts in connection with the Acquisition, as alleged in USHC
Infusion, et al. v. HIPS, USHC infusion is not liable to AHMS and therefore is
not liable to Kingsland. In August 1995, AHMS moved to dismiss certain of USHC
Infusion's affirmative defenses. On March 22, 1996, the Court granted the motion
in part, denied it in part, certified the case for trial, and ordered AHMS to
participate in certain discovery noticed by the Company. In so doing, the Court
upheld the same defenses that were upheld in the HIPS litigation.

<PAGE>

In consideration for the Company's original acquisition of Reliable Nurses
Aides of Westchester, Inc. in 1986, the Company issued to the sellers a series
of 9% convertible subordinated debentures. The Company asserted a claim against
the sellers in connection with the acquisition, relating to the financial
statement presentation of certain items, and in connection therewith withheld
$284,000 of principal payments plus interest to offset such claim. The sellers
filed suit against the Company and the sellers' accountants in December 1988
seeking payment of amounts due including interest at a rate of 9% per annum from
June 1987 (Smith, Katz and Cole v. U.S. HomeCare Corporation, et al., Supreme
Court of the State of New York, Nassau County). The suit is currently in the
pre-trial discovery phase. The Company does not believe that the resolution of
this matter will have a material adverse effect on the Company's consolidated
financial statements.

Government Regulation

The Company and the health care industry generally are subject to extensive
and frequently changing state and federal regulation governing the dispensing,
distributing and compounding of prescription products, the provision of home
health care services and home infusion services, the licensing of branch
offices, certification of home health agencies and the licensing of
professionals. In addition, state and federal fraud and abuse laws prohibit,
among other things, the payment of remuneration for patient or business
referrals. New laws and regulations are enacted from time to time to regulate
new and existing services and products in the home health care industry, and any
changes in the laws or regulations or new interpretations of existing laws or
regulations could have an adverse effect on the Company's methods and costs of
doing business. Further, failure by the Company to comply with applicable laws
could adversely affect the Company's ability to continue to provide, or receive
reimbursement for, its services from Medicare, Medicaid and other third party
payors and also could subject the Company and its officers to civil and criminal
penalties.

In New York State, a certificate of need ("CON") must be obtained in order
to be certified to participate in the Medicare and Medicaid programs. The
Company does not have CONs covering its metropolitan New York branches and is
therefore not certified as a Medicare provider for such branches. A majority of
the Company's business in metropolitan New York is therefore derived as a
subcontractor to Medicare-certified and Medicaid- certified agencies such as
VNS. In upstate New York (which was an acquired operation) the Company does have
CONs.

The Company is also subject to laws and regulations pertaining to the
environment, health and safety. If the Company were found to be in violation of
any such laws and regulations, it could have a material adverse effect on its
business and financial condition.

Limitation on Net Operating Loss Carryforwards

At December 31, 1995, the Company estimated that for United States federal
income tax purposes, it had consolidated net operating loss carryforwards of
approximately $21.0 million. The availability of these carryforwards to offset
future taxable income of the Company, if any, is subject to various limitations
under the Internal Revenue Code (the "Code"). In particular, the Company's
ability to utilize such carryforwards would be restricted due to the occurrence
of an "ownership change" within the meaning of Section 382 of the Code. Any
"ownership change" pursuant to Section 382 of the Code will result in
limitations on the Company's ability to utilize its net operating loss
carryforwards to offset taxable income, including the timing of such
utilization. In February 1995, the Company completed the offering of $35.00
Preferred Stock which it believes did not result in an "ownership change."

Health Care Reform

Political, economic and regulatory influences are likely to lead to
fundamental change in the health care industry in the United States. Numerous
proposals for comprehensive reform of the nation's health care system have been
introduced in Congress. Many approaches have been considered, including mandated
basic health care

<PAGE>

benefits, controls on health care spending through limitations on the growth of
private health insurance premiums and Medicare and Medicaid spending, the
creation of large insurance purchasing groups and fundamental changes to health
care delivery systems. In addition, some of the states in which the Company
operates are considering various health care reform proposals. The Company
anticipates that Congress and state legislatures will continue to review and
assess alternative health care delivery systems and payment methodologies, and
that public debate of these issues will continue in the future. Due to
uncertainties regarding the ultimate features of reform initiatives and their
enactment and implementation, the Company cannot predict which, if any, reforms
will be adopted, when they may be adopted, or what impact they may have on the
Company. In addition, the cost and service considerations which have generated
proposals for health care reform have also resulted in, and are expected to
continue to result in, strategic realignments and combinations in the health
care industry which may, over time, have a significant impact on the Company's
strategic direction and results of operations. The actual announcement of reform
proposals and the investment communities' reaction to such proposals,
announcements by competitors and payors of their strategies to respond to reform
initiatives and general industry conditions have produced and may continue to
produce volatility in the trading and market price of the Company's Common Stock
and for securities of health care companies generally.

Ability to Attract Key Management and Dependence on Health Care Professionals

The Company's future success will depend in large part on its ability to
attract and retain senior management personnel and branch-level management. In
addition, the Company is highly dependent on its staff of professional nurses
and its other health care professionals and paraprofessionals. Competition for
qualified management personnel and health care professionals and
paraprofessionals is strong. The inability to attract, retain or motivate
management and sufficient numbers of qualified health care professionals and
paraprofessionals could adversely affect the Company's business and prospects.
Although the Company has been generally able to meet its staffing requirements
for professional nurses and other health care staff, the Company has experienced
occasional staffing shortages at certain of its offices, and an increase in
competition, or a decline in its ability to meet its staffing needs in the
future could have a material adverse effect on the Company's profitability and
on the Company's ability to maintain or increase its patient base at certain or
all of its branch offices.

Liability and Insurance

The Company's services subject it to liability risk. Malpractice claims may
be asserted against the Company if its services are alleged to have resulted in
patient injury or other adverse effects. The Company has from time to time been
subject to such suits in the ordinary course of its business. There can be no
assurance that future claims will not be made or that such claims, if made, will
not materially and adversely affect the Company's business or financial
condition. The Company currently maintains liability insurance in the amount of
$2.0 million per occurrence and $6.0 million in the aggregate. There can be no
assurance that the coverage limits of the Company's insurance policies will be
adequate. In addition, while the Company has been able to obtain liability
insurance in the past, such insurance varies in cost, is difficult to obtain and
may not be available in the future on acceptable terms or at all. A successful
claim against the Company in excess of the Company's insurance coverage could
have a material adverse effect upon the Company's business and financial
condition. Claims against the Company, regardless of their merits or eventual
outcome, also may have a material adverse effect upon the Company's reputation
and business.

Competition

The home health care market is highly competitive and is divided among a
large number of providers, some of which are national providers, but most of
which are either regional or local providers. Certain of the Company's
competitors and potential competitors have significantly greater financial,
technical and marketing and sales resources than the Company and may, in certain
locations, possess licenses or certificates (for example, CONs in New York
State) that permit them to provide services that the Company cannot currently
provide. There can be

<PAGE>

no assurance that the Company will not encounter increased competition in the
future that could limit the Company's ability to maintain or increase its
business and could adversely affect the Company's operating results.

Potential Volatility of Stock Price

There has been significant volatility in the market prices of securities of
the Company and of health care companies in general. The Company believes
factors such as legislative and regulatory developments and quarterly variations
in financial results have caused the market price of its Common Stock to
fluctuate substantially. In addition, the stock market has experienced
volatility that has particularly affected the market prices of many health care
service companies' stocks and that often has been unrelated to the operating
performance of such companies. These market fluctuations may adversely affect
the price of the Common Stock.

Dividends Unlikely

The Company has never declared or paid any cash dividends on its capital
stock. In addition, the Company's RLOC and 9% convertible subordinated
debentures prohibit the payment of cash dividends on the Company's capital stock
without prior consent. The Company currently intends to retain all earnings for
the operation and expansion of its business and does not anticipate paying any
cash dividends in the foreseeable future. The Company has paid dividends on its
outstanding $35.00 Preferred Stock with Common Stock.

<PAGE>

SELLING SHAREHOLDERS

The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Shareholders as of April 30, 1996.
Except as indicated, none of the Selling Shareholders has had a material
relationship with the Company within the past three years other than as a result
of the ownership of the Shares or other securities of the Company. The Shares
offered by this Prospectus may be offered from time to time by the Selling
Shareholders. See "Plan of Distribution."

<TABLE>
<CAPTION>
Beneficial Ownership
After Offering(1)
--------------------------
Number of Shares Number of Shares
Beneficially Owned Registered Number
Name of Selling Shareholder Prior to Offering for Sale Hereby(2) of Shares Percent
- --------------------------- ----------------- ------------------ --------- -------
<C> <C> <C> <C> <C>
1501 L. C. 15,839 15,296 543 *

ABDM Partners 165,522(3) 160,343(3) 5,179 *

A.J.P.V. CO. 95,046 91,784 3,262 *

Arthur T. Anderson 105,608 101,982 3,626 *

Mansour I. Y. Badr 66,204(4) 64,133(4) 2,071 *

George L. Ball 84,486 81,586 2,900 *

Susan Huffard Ball 42,242 40,793 1,449 *

Bank of Butterfield & Son Ltd. 15,839 15,296 543 *
#681899

Judith Berman 15,839 15,296 543 *

Ghulam Bombaywala 31,680 30,594 1,086 *

David Bromberg 11,361 10,972 389 *

The Gene F. Bruyette Living Trust, 21,119 20,396 723 *
Gene F. Bruyette, Trustee

Lewis W. Caspe 42,242 40,793 1,449 *

John T. Cater 15,839 15,296 543 *

E. Dean Catlett and Joann 21,119 20,396 723 *
Catlett

Michael S. Chadwick 6,333 6,118 215 *

The Chase Manhattan Bank, N.A. 425,000(5) 425,000(5) -- *

Ray C. Childress and 21,119 20,396 723 *
Kara S. Childress

Melville Lockert Cody 4,222 4,078 144 *

Courtney Lyle Cohn 54,323 52,459 1,864 *

Ann Lindsay Cohn 54,323 52,459 1,864 *

Morton A. Cohn 295,705 285,553 10,152 *

Connecticut Development Authority 750,000(6) 750,000(6) -- *

Dale W. Conrad and Reba J. 21,119 20,396 723 *
Conrad, JTWROS

</TABLE>

<PAGE>

David W. Cook 31,680 30,594 1,086 *

Creditanstalt Bankverein 325,000(7) 325,000(7) -- *

Thomas W. Custer 21,119 20,396 723 *

William M. DeArman 23,102 22,379 723 *

Delaware Charter Guarantee 31,680 30,594 1,086 *
& Trust Custodian FBO Michael
W. Mitchell, IRA DTD 1/27/95

Delaware Charter Guarantee 15,839 15,296 543 *
& Trust Custodian FBO James T.
Ulmer Jr., IRA DTD 4/6/93

Delaware Charter Guarantee 31,680 30,594 1,086 *
& Trust Custodian FBO Bruce
Van Horn IRA DTD 3/17/94

Donald L. Dell Trustee 21,119 20,396 723 *
Donald L. Dell Revocable Trust
dated 6/8/93

Louis Del Homme 54,323 52,459 1,864 *

John E. Drury 330,936 319,553 11,383 *

Wayne B. Duddlesten 63,363 61,189 2,174 *

Don L. Fitch 15,839 15,296 543 *

Frost Family I, Ltd. 221,218 203,966 17,252 *

Emilio A. Fusco or Mary G. Fusco, 63,363 61,189 2,174 *
JTWROS

Jerald Gibbs 15,839 15,296 543 *

Courtney C. Gibson 21,119 20,396 723 *

William N. Goodwin 21,119 20,396 723 *

Tolar N. Hamblen, III 15,839 15,296 543 *

John V. Hazleton, Jr. 20,839 15,296 5,543 *

Edward F. Heil, Trustee for 31,680 30,594 1,086 *
Edward F. Heil, Jr. Irrevocable Trust
Agreement #2 dated 12/1/83

Edward F. Heil, Trustee for 31,680 30,594 1,086 *
Karen Heil Irrevocable Trust
Agreement #2 dated 12/1/83

Edward F. Heil, Trustee for 31,680 30,594 1,086 *
Sandra Heil Irrevocable Trust
Agreement #2 dated 12/1/83
</TABLE>

<PAGE>

Huffard Family Partnership 31,680 30,594 1,086 *

Scott Hunsaker 15,839 15,296 543 *

Miles A. Hutson 15,839 15,296 543 *

IGI Holdings, Inc. 83,258(8) 80,670(8) 2,588 *

J-All Partnership 126,729 122,379 4,350 *

Jules I. Epstein, Trustee 15,100 14,582 518 *
J.E. Consulting Services Ltd.
Employees' Profit Sharing Trust

Arthur W. Johnson/Gaynor D. Johnson 54,323 52,459 1,864 *

Samuel A. Jones 21,119 20,396 723 *

Kenneth A. Laningham, trustee, 52,803 50,991 1,812 *
K.A.L. Trust Agreement No. 1
U.A.D. 03-03-93

Susan K. Keller 21,119 20,396 723 *

Richard N. Laminack and 15,839 15,296 543 *
Mary E. Laminack

Neil Lande Custodian for 31,680 30,594 1,086 *
Caroline Lande

Neil Lande Custodian for 31,680 30,594 1,086 *
Lynne Lande

Neil Lande Custodian for 31,680 30,594 1,086 *
Sara Lande

Neil Lande Custodian for 31,680 30,594 1,086 *
Stephen Lande

Frederick C. Lane 82,474(9) 48,104(9) 34,370 *

Robert W. Lary 21,119 20,396 723 *

Michael P. Lawlor and 21,119 20,396 723
Helen Lawlor

Kenneth L. & Linda P. Lay 31,680 30,594 1,086 *

J.C. Ledet 15,100 14,582 518 *

Kenneth C. Leung 15,839 15,296 543 *

Earle S. Lilly 31,680 30,594 1,086 *

Roger P. Lindstedt 105,046 91,784 13,262 *

Robert A. Lurie 31,680 30,594 1,086 *

Dennis P. Lynch 185,381(10) 179,581(10) 5,800 *

</TABLE>

<PAGE>

Milton T. Maddox 15,839 15,296 543 *

MAK International Investment 83,258(11) 80,670(11) 2,588 *
Company Limited

Megabank of Arapahoe F.B.O. 15,839 15,296 543 *
Gordon G. Burr, IRA

Ed McAninch 31,680 30,594 1,086 *

William T. McCaffrey 33,292(12) 32,258(12) 1,034 *

Kirby Cohn McConnell 31,680 30,594 1,086 *

W. Wallace McDowell, Jr. 81,102(13)(14) 32,077(13) 49,025 *

James M. McGinley 21,119 20,396 723 *

Nancy Goins McNeil 15,839 15,296 543 *

Hermann Merkin 66,204(15) 64,133(15) 2,071 *

Dr. Harold E. Milkey, D.M.D. 12,670 12,237 433 *

Brooke A. Mitchell 31,680 30,594 1,086 *

Caroline S. Mitchell 15,839 15,296 543 *

Elizabeth A. Mitchell 15,839 15,296 543 *

Katherine B. Mitchell 15,839 15,296 543 *

Michael W. Mitchell IRA 31,680 30,594 1,086 *

Donald F. Moorehead, Jr. 21,119 20,396 723 *

George Moorehead IRA 21,083 20,360 723 *

George O. Moorehead SEP 15,875 15,332 543 *

Ben T. Morris 15,839 15,296 543 *

Averell H. Mortimer 17,317 16,724 593 *

G. William Moseley 316,607 323 316,284 3.6

G. Robert O'Brien 550,543(16)(17) 31,323(16) 519,220 5.6

Thomas J. O'Haren 63,363 61,189 2,174 *

John M. O'Quinn 295,705 285,553 10,152 *

John A. Pinto 63,363 61,189 2,174 *

Anaka K. Prakash 31,680 30,594 1,086 *

David Preisler 21,119 20,396 723 *

Prima Partners L.P. 658,027(18) 637,049(18) 20,978 *

Leroy E. Quigley 21,119 20,396 723 *

</TABLE>

<PAGE>

Leonard Rauch 52,803 50,991 1,812 *

Chris C. Reidel 13,230(19) 12,817(19) 413 *

John S. Reiland 21,119 20,396 723 *

Richard K. and Pamela Gaye 21,119 20,396 723 *
Anderson Reiling TIC

Mary E. Reynolds 15,839 15,296 543 *

William C. Robbins 31,680 30,594 1,086 *

Rosen Family Trust 42,242 40,793 1,449 *

Robert Roten & Carole Roten 60,406 58,333 2,073 *
Co-TTEE's FBO Robert &
Carole Roten Living Trust
U.A.D. 1-16-91

Ronald L. Russel Sr. and 60,216 58,150 2,066 *
Shirley J. Russel

Nolan Ryan 31,680 30,594 1,086 *

Sanders Morris Mundy, Inc. 474,999(20) 474,999(20) -- *

Brad D. Sanders 21,119 20,396 723 *

Bret D. Sanders 21,119 20,396 723 *

Christine M. Sanders 21,119 20,396 723 *

Don A. Sanders 666,982(21)(22) 566,877(22) 100,105 1.2

Katherine U. Sanders 179,535 173,371 6,164 *

Laura K. Sanders 21,119 20,396 723 *

Quinlan Quiros Schnitzer 31,680 30,594 1,086 *

Bruce Slovin 63,363 61,189 2,174 *

Sherri D. Spicer 54,323 52,459 1,864 *

Sherri D. Spicer, Trustee 15,839 15,296 543 *
Lindsey Spicer #1 Trust

State Street Bank & Trust FBO 48,347(23) 30,594 17,753 *
Hadley C. Ford IRA T25422

Dr. Michael W. Stavinoha 15,100 14,582 518 *

Theo Patricia Story 52,803 50,991 1,812 *

Neil B. Strauss 31,680 30,594 1,086 *

Donald S. Taylor 31,680 30,594 1,086 *

Dr. Steven D. Thompson 30,181 29,146 1,035 *
</TABLE>

<PAGE>

Jack T. Trotter 63,363 61,189 2,174 *

Dr. Bruce Van Horn 31,680 30,594 1,086 *

Tony Vallone 31,680 30,594 1,086 *

Gerrit Vreeland 30,202 29,166 1,036 *

Stan Wallace 15,839 15,296 543 *

George M. Waluk 31,680 30,594 1,086 *

Edward L. Whalen 15,839 15,296 543 *

Linett Wilkerson 15,839 15,296 543 *

Leonard Stanley Wolowiec 45,304 43,750 1,554 *

Total.......................... 10,033,052 8,798,058 1,234,994

</TABLE>

- -----------------------------

(1) The figures for the number of shares and the percentage of shares
beneficially owned by the Selling Shareholders after the offering are based
on the assumption that all of the Selling Shareholders will sell all of the
shares registered for sale hereby. See "Plan of Distribution."

(2) The number of shares of Common Stock listed for each Selling Shareholder,
other than The Chase Manhattan Bank, N.A. ("Chase"), Connecticut
Development Authority ("CDA") and Creditanstalt Bankverein
("Creditanstalt"), includes the shares of Common Stock which will be issued
if, and when, the Selling Shareholder converts its $35.00 Preferred Stock
to Common Stock. This number of shares of Common Stock also includes the
shares of Common Stock issued through September 30, 1995 as dividends on
the $35.00 Preferred Stock. Chase, CDA and Creditanstalt do not hold $35.00
Preferred Stock.

(3) Includes 12,500 shares of Common Stock issuable upon exercise of a Warrant.

(4) Includes 5,000 shares of Common Stock issuable upon exercise of a Warrant.

(5) All 425,000 shares of Common Stock are issuable upon exercise of a Warrant.

(6) All 750,000 shares of Common Stock are issuable upon exercise of a Warrant.

(7) All 325,000 shares of Common Stock are issuable upon exercise of a Warrant.

(8) Includes 6,249 shares of Common Stock issuable upon exercise of a Warrant.

(9) Includes 3,750 shares of Common Stock issuable upon exercise of a Warrant.

(10) Includes 14,000 shares of Common Stock issuable upon exercise of a Warrant.

(11) Includes 6,249 shares of Common Stock issuable upon exercise of a Warrant.

<PAGE>

(12) Includes 2,499 shares of Common Stock issuable upon exercise of a Warrant.

(13) Includes 2,501 shares of Common Stock issuable upon exercise of a Warrant.

(14) Also includes 16,667 shares of Common Stock issuable upon exercise of a
stock option. Mr. McDowell is a director of the Company.

(15) Includes 5,000 shares of Common Stock issuable upon exercise of a Warrant.

(16) Includes 1,250 shares of Common Stock issuable upon exercise of a Warrant.

(17) Includes 500,000 shares of Common Stock issuable upon exercise of a stock
option. Mr. O'Brien is a director and officer of the Company.

(18) Includes 37,499 shares of Common Stock issuable upon exercise of a Warrant
issued to Prima Management Corp, the general partner of Prima Partners,
L.P. Two directors of the Company are officers, directors and shareholders
of Prima Management Corp. and special limited partners of Prima Partners,
L.P.

(19) Includes 999 shares of Common Stock issuable upon exercise of a Warrant.

(20) All 474,999 shares of Common Stock are issuable upon exercise of a Warrant.

(21) Includes 2,501 shares of Common Stock issuable upon exercise of a Warrant.

(22) Includes 40,000 shares of Common Stock as to which Mr. Sanders expressly
disclaims beneficial ownership. Does not include 20,901 shares of Common
Stock over which Mr. Sanders has dispositive power but does not have
beneficial ownership.

(23) Includes 16,667 shares of Common Stock issuable upon exercise of a stock
option. Mr. Ford is a director of the Company.

* Less than 1%.

All of the Shares being offered hereby were acquired by the Selling
Shareholders from the Company in private placement transactions. The Warrants
were acquired by Chase, CDA and Creditanstalt in connection with the Company's
financings. Assuming the exercise of all the corresponding Warrants and
conversion of all of the shares of $35.00 Preferred Stock, the Warrant Shares
and Preferred Shares will be acquired by the Selling Shareholders at a purchase
price per share of $1.75. The Shares are being included in this offering as a
result of certain contractual arrangements with the Selling Shareholders. The
Company has agreed to bear certain expenses (other than placement agent fees and
expenses of certain advisors to the Selling Shareholders) in connection with the
registration of the Shares. All of the Dividend Shares were acquired by the
Selling Shareholders as dividends on the $35.00 Preferred Stock at prices based
upon the market price of the Common Stock during a period prior to payment of
such dividends.

The sale of Shares by "affiliates" (as such term is defined in Rule 144(a)
under the Securities Act) are subject to the volume and manner of sale
restrictions set forth in Rule 144. The Company has agreed to prepare and file
such amendments and supplements to the Registration Statement as may be
necessary to keep this Registration Statement effective for not less than three
years or until two-thirds of certain of the Shares have been sold pursuant to
the terms hereof.

<PAGE>

PLAN OF DISTRIBUTION

The Sh res offered hereby are being offered directly by the Selling
Shareholders. The Company will not receive any proceeds from the sale of any of
the Shares by the Selling Shareholders. The sale of the Shares may be effected
by the Selling Shareholders from time to time in transactions on the Nasdaq
National Market, in negotiated transactions, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).

At the time a particular offer of Shares is made, to the extent required, a
supplemental Prospectus will be distributed which will set forth the number of
Shares being offered and the terms of the offering including the name or names
of any underwriters, dealers or agents, the purchase price paid by any
underwriter for the Shares purchased from Selling Shareholders, any discounts,
commissions and other items constituting compensation from the Selling
Shareholders and any discounts, commissions or concessions allowed or reallowed
or paid to dealers.

In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with by the Company and the Selling
Shareholders.

The sale of Shares by affiliates are subject to the volume and manner of
sale restrictions set forth in Rule 144.

The Selling Shareholders and any broker-dealers, agents or underwriters
that participate with the Selling Shareholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Selling Shareholder Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The Company has
agreed to indemnify certain Selling Shareholders and their affiliates against
certain liabilities, including liabilities under the Securities Act. Certain
Selling Shareholders have agreed to indemnify the Company and its affiliates
against certain liabilities, including liabilities under the Securities Act.

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to the Common Stock of the Company for a
period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, each Selling Shareholder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Shareholders.

The Company has agreed to bear certain expenses (other than selling
commissions and fees and expenses of certain advisors to the Selling
Shareholders) in connection with the registration of the Shares.

ISSUANCE OF THE WARRANT SHARES AND USE OF PROCEEDS

The Warrant Shares are issuable upon the exercise of outstanding Warrants.
The aggregate gross proceeds that the Company could receive on the exercise of
all of the corresponding Warrants is $3,631,243. The Company intends to use any
net proceeds from the exercise of the Warrants for general corporate purposes,
including working capital. None of the proceeds from the sale of the Shares will
be received by the Company.

<PAGE>

LEGAL MATTERS

The validity of the Shares offered hereby will be passed upon for the
Company by Brobeck, Phleger & Harrison LLP, New York, New York.

EXPERTS

The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given their authority as
experts in accounting and auditing.

<PAGE>

8,798,058 Shares

U.S. HomeCare Corporation

Common Stock

PROSPECTUS

May 30, 1996

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

The following table sets forth an estimate of the expenses to be incurred
by the Company in connection with the issuance and distribution of the
securities being registered:

Amount to
Be Paid
-------

Registration Fee-- SEC ..................................... $ 6,447
Legal Fees and Expenses .................................... 15,000
Accounting Fees and Expenses ............................... 6,900
Miscellaneous .............................................. 1,653
-------
Total ...................................................... $30,000
=======

Item 15. Indemnification of Directors and Officers

Reference is made to Article IX of the Registrant's Restated Certificate of
Incorporation filed as Exhibit 3(a) to the Registrant's Registration on Form S-1
(Registration No. 33-40288), Article VI of the Registrant's ByLaws filed as
Exhibit 3(b) to the Registrant's Registration on Form S-1 (Registration No.
33-40288) and Sections 717 through 720 of the New York Business Corporation Law.

Item 16. Exhibits

The following is a list of Exhibits filed as part of the Registration
Statement:

4.1 Specimen Certificate for Shares of Registrant's Common Stock.

4.2 Provisions of the Restated Certificate of Incorporation and By-laws of the
Registrant defining the rights of holders of Common Stock of the
Registrant, incorporated herein by reference to Exhibit 3(a) to the
Registrant's Registration Statement on Form S-1 (Registration No. 33-40288)
and to Exhibit 3(b) to the Registrant's Registration Statement on Form S-1
(Registration No. 33-40288).

5. Opinion and Consent of Brobeck, Phleger & Harrison LLP.

23.1 Consent of Deloitte & Touche LLP, independent certified public accountants.

23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed
as Exhibit 5).

24. Powers of Attorney.

Item 17. Undertakings

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 payment by the Registrant of expenses 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 against the
Registrant 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

II-1

<PAGE>

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.

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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective 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.

(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.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1993, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1993, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1993, each post-effective amendment that contains a form of prospectus 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.

II-2

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Hartford, State of Connecticut, on May 28, 1996.

U.S. HOMECARE CORPORATION

By: /s/ G. Robert O'Brien
-------------------------------
G. Robert O'Brien
President, Chief Executive
Officer and Director

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on May 28, 1996.

Signature Title

By: /s/ G. Robert O'Brien President, Chief Executive Officer
---------------------------- and Director
G. Robert O'Brien

By: /s/Stephen H. Matheson Vice President, Finance and Chief
---------------------------- Financial Officer (Principal
Stephen H. Matheson Financial and Accounting Officer)

By: /s/Jay C. Huffard Director
----------------------------
Jay C. Huffard

By: /s/W. Wallace McDowell, Jr. Director
----------------------------
W. Wallace McDowell, Jr.

By: /s/W. Edward Massey Director
----------------------------
W. Edward Massey

By: /s/Shawkat Raslan Director
----------------------------
Shawkat Raslan

By: /s/Susan S. Robfogel Director
----------------------------
Susan S. Robfogel

By: /s/John R. Gunn Director
----------------------------
John R. Gunn

By: /s/Hadley C. Ford Director
----------------------------
Hadley C. Ford

*By:
---------------------------- Attorney-in-Fact
Stephen H. Matheson

II-3

<PAGE>

EXHIBIT INDEX

Exhibit
No. Description Page
--- ----------- ----
<S> <C> <C>
4.1 Specimen Certificate for Shares of Registrant's Common Stock...................................

4.2 Provisions of the Restated Certificate of Incorporation and By-laws of the Registrant defining the
rights of holders of Common Stock of the Registrant, incorporated herein by reference to Exhibit
3(a) to the Registrant's Registration Statement on Form S-1 (Registration No. 33-40288) and to
Exhibit 3(b) to the Registrant's Registration Statement on Form S-1 (Registration No.
33-40288)......................................................................................

5. Opinion and Consent of Brobeck, Phleger & Harrison LLP.........................................

23.1 Consent of Deloitte & Touche LLP, independent certified public accountants.....................

23.2 Consent of Brobeck Phleger & Harrison LLP (included in the opinion filed as Exhibit 5).........

24. Powers of Attorney.............................................................................
</TABLE>

[THE FOLLOWING MATERIAL REPRESENTS A PRINTED STOCK CERTIFICATE SPECIMEN]

US
HomeCare
Care is our Only Concern

- --------------------- ---------------------
NUMBER SHARES
US 1787
- --------------------- ---------------------

U.S. HomeCare Corporation
Incorporated under the laws of the State of New York

COMMON STOCK COMMON STOCK
SEE REVERSE FOR
CERTAIN DEFINITIONS CUSIP 911819 10 0

- --------------------------------------------------------------------------------
This certifies that

SPECIMEN

is the owner of

- --------------------------------------------------------------------------------

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE, OF
U.S. HomeCare Corporation

transferable on the books of the Corporation in person or by duly authorized
attorney upon surrender of this certificate properly endorsed. This certificate
is not valid unless countersigned and registered by the Transfer Agent and
Registrar.

Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

[U.S. HOMECARE CORPORATION CORPORATE SEAL]
1976
NEW YORK

/s/ Sandra L. Lauer /s/ W. Edward Massey
Secretary President

----------

COUNTERSIGNED AND REGISTERED
FIRST CHICAGO TRUST COMPANY
OF NEW YORK

TRANSFER AGENT
AND REGISTRAR,

Authorized Officer

<PAGE>

U.S. HOMECARE CORPORATION

The following abbreviations, when used in the inscriptions on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.

<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT--...........Custodian..........
(Cust) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to Minors

JT TEN -- as joint tenants with right of
survivorship and not as tenants Act ..........................
in common (State)
</TABLE>

Additional abbreviations may also be used though not in the above list.

For the value received, ____________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________

________________________________________________________________________________

________________________________________________________________________________
Please print or typewrite name and address of assignee

________________________________________________________________________________

_________________________________________________________________________ Shares

represented by the within Certificate, and do hereby irrevocably constitute and

appoint ________________________________________________________________________

Attorney to transfer the said shares on the books of the within-named

Corporation with full power of substitution in the premises.

Dated, _________________________

______________________________________

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

May 28, 1996

U.S. HomeCare Corporation
750 Main Street
Hartford, CT 06103

Re: Registration Statement on Form S-3
----------------------------------

Gentlemen and Ladies:

We have examined the Registration Statement on Form S-3 filed by you with
the Securities and Exchange Commission (the "Commission") on May 28, 1996, in
connection with the registration under the Securities Act of 1933, as amended,
of 8,798,058 shares of your Common Stock (the "Shares"). The Shares include
2,074,996 shares ("Warrant Shares") issuable by the Company upon the exercise of
outstanding warrants (the "Warrants"), 6,571,380 shares ("Preferred Shares")
issuable upon conversion of the Company's $35.00 6% Convertible Preferred Stock
("$35.00 Preferred") and 151,682 shares ("Dividend Shares") issued as of
September 30, 1995. The Warrant Shares, Preferred Shares and Dividend Shares are
being offered by certain stockholders of the Company. As your counsel, we have
examined the proceedings taken and are familiar with the proceedings proposed to
be taken by you in connection with the transactions described in the
Registration Statement.

We have examined such records and documents and have made such examination
of laws as we considered necessary to form a basis for the opinion set forth
herein. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies
thereof.

Based upon and subject to the foregoing, it is our opinion, upon conclusion
of the proceedings being taken or contemplated by us, as your counsel, to be
taken prior to the issuance of the Warrant Shares and Preferred Shares and upon
completion of the proceedings being taken in order to permit the issuance or
sale of the Warrant Shares and Preferred Shares and the Dividend Shares to be
carried out in accordance with the securities laws of the various states where
required, the Warrant Shares and Preferred Shares, when issued and sold in
accordance with the terms of the Warrants or the $35.00 Preferred and in the

<PAGE>

U.S. HomeCare Corporation
May 28, 1996
Page 2

manner described in the Registration Statement, and the Dividend Shares, when
sold in the manner described in the Registration Statement, will be legally and
validly issued, fully paid and nonassessable.

We hereby consent to the use of our name in the Registration Statement
under the caption "Legal Matters" in the related Prospectus and consent to the
filing of this opinion as an exhibit thereto.

Very truly yours,

/S/BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP

INDEPENDENT AUDITOR'S CONSENT

We consent to the incorporation be reference in this registration styatement of
U.S. HomeCare Corporation on Form S-3 of our report dated March 22, 1996,
including an emphasis paragraph, and appearing in the Annual Report on Form 10-K
of U.S. HomeCare Corporation for the year ended December 31, 1995 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
New York, New York

May 28, 1996

POWER OF ATTORNEY

We the undersigned directors and/or officers of U.S. HomeCare Corporation
(the "Company"), hereby severally constitute and appoint G. Robert O'Brien,
Chief Executive Officer and President and Stephen H. Matheson, Chief Financial
Officer, Vice President Finance and each of them individually, with full powers
of substitution and resubstitution, our true and lawful attorneys, with full
powers to them and each of them to sign for us, in our names and in the
capacities indicated below, the Registration Statement on Form S-3 filed with
the Securities and Exchange Commission, and any and all amendments to said
Registration Statement (including post-effective amendments) and any
Registration Statement filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, in connection with the registration under the Securities Act
of 1933, as amended, of equity securities of the Company, and to file or cause
to be filed the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or could
do in person, and hereby ratifying and confirming all that said attorneys, and
each of them, or their substitute or substitutes, shall do or cause to be done
by virtue of this Power of Attorney.

This Power of Attorney may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Power of Attorney.

WITNESS our hands on this 28th day of May, 1996.

By: /s/Jay C. Huffard Chairman of the Board
------------------------
Jay C. Huffard

By: /s/G. Robert O'Brien Chief Executive Officer, President
------------------------ and Director (Principal Executive
G. Robert O'Brien Officer)

By: /s/Stephen H. Matheson Vice President Finance and Chief
------------------------ Financial Officer (Principal
Stephen H. Matheson Financial and Accounting Officer)

By: /s/W. Wallace McDowell, Jr. Director
------------------------
W. Wallace McDowell, Jr.

By: /s/W. Edward Massey Director
------------------------
W. Edward Massey

By: /s/Shawkat Raslan Director
------------------------
Shawkat Raslan

By: /s/Susan S. Robfogel Director
------------------------
Susan S. Robfogel

By: /s/John R. Gunn Director
------------------------
John R. Gunn

By: /s/Hadley C. Ford Director
------------------------
Hadley C. Ford