SCHNECK WELTMAN HASHMALL & MISCHEL LLP
1285 Avenue of the Americas
New York, New York 10019
Tel 212-956-1500
Fax 212-956-3252
May 8, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20001
Attn: Sarah L. Cunningham, Esq.
Re: Response USA, Inc.
Registration Statement on Form S-3
File No. 333-19527
Dear Sir or Madam:
We file herewith Amendment No. 2 to the Registration
Statement on Form S-3 of Response USA, Inc. (the "Company"),
relating to the exercise of currently outstanding warrants (the
"Registration Statement"). The following numbered responses
correspond to the Staff's letter of comment dated April 4, 1997.
1. The Registration Statement has been revised to include
the material portions from our original response letter as well
as the additionally requested disclosure.
2. The Registration Statement has been revised to include
recent developments.
3. The disclosure has been revised to include the
specified filings.
4. The comment concerning the age of the financial
statements is acknowledged.
5. An updated consent is provided with the Amendment.
Should you require any additional information, please
contact the undersigned at (212) 956-1500.
Very truly yours,
/s/THOMAS A. ROSE
Thomas A. Rose
Enclosures
cc: Richard M. Brooks, Esq.
Mr. Alan Cohen
As filed with the Securities and Exchange Commission on May 9, 1997
Registration No. 333-19527
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
AMENDMENT NO. 2 TO
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
RESPONSE USA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-3088639
(State or Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
11-H Princess Road
Lawrenceville, New Jersey 08648
(609) 896-4500
(Address, Including Zip Code, and Telephone Number, Including
Area Code. of Registrant's Principal Executive Offices)
Richard M. Brooks, President
Response USA, Inc.
11-H Princess Road
Lawrenceville, New Jersey 08648
(609) 896-4500
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
___________
Copies to:
Felice F. Mischel, Esq.
Thomas A. Rose, Esq.
Schneck Weltman Hashmall & Mischel LLP
1285 Avenue of the Americas
New York, New York 10019
(212) 956-1500
Approximate date of proposed sale to the public: From time to
time after the effective date of this registration statement, as
determined by market conditions.
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 of 1933, please check
the following box and list the Securities Act of 1933 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 of 1933, check the following box and
list the Securities Act of 1933 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. [ ]
CALCULATION OF REGISTRATION FEE
-------------------------------
Proposed
Title of Proposed Maximum
Each Class Maximum Aggregate Amount of
of Securities Amount Offering Offering Regis-
To Be To Be Price Per Price Per tration
Registered Registered Security Security Fee
- -----------------------------------------------------------------------------
Common Stock, par 1,233,381 $ 1.75 $ 2,158,417 $ 654.07
value $.008 per
share ("Common Stock"),
to be issued upon
exercise of outstanding
Class A Redeemable Common
Stock Purchase Warrants
Common Stock to be 1,481,950 $ 1.75 $ 2,593,412 $ 785.88
issued upon exercise
of outstanding Class B
Redeemable Common
Stock Purchase Warrants
Common Stock to be 1,319,864 $ 1.75 $ 2,309,762 $ 699.93
sold by selling
stockholders
Total Registration Fee $ 2,139.88
The registration fee is calculated pursuant to Rule 457(c) of the
Securities Act of 1933 by taking the closing high bid price of the
Registrant's common stock, par value $.008 per share, on May 7, 1997, as
reported on The Nasdaq SmallCap Market.
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 Securities and
Exchange Commission, acting pursuant to said Section 8(a) may determine.
RESPONSE USA, INC.
1,233,381 Shares of Common Stock Issuable upon Exercise
of Class A Redeemable Common Stock Purchase Warrants,
1,481,950 Shares of Common Stock Issuable upon Exercise
of Class B Redeemable Common Stock Purchase Warrants and
1,319,864 Shares of Common Stock
This Prospectus relates to the sale of 2,715,331 shares of common stock,
$.008 par value per share (the "Common Stock"), of Response USA, Inc. (the
"Company"). Of such shares of Common Stock (i) 1,233,381 shares are issuable
upon the exercise of 3,700,142 currently outstanding class A Common Stock
purchase warrants ("Class A Warrants"), (ii) 1,481,950 shares of Common Stock
are issuable upon the exercise of 4,445,848 currently outstanding class B
Common Stock purchase warrants (the "Class B Warrants," and collectively with
the Class A Warrants, the "Warrants"), and (iii) 1,319,864 shares of
previously outstanding shares of Common Stock to be sold by selling
stockholders. Each three Class A Warrants are exercisable to purchase one
share of Common Stock for an aggregate exercise price of $2.50, through July
31, 1997, or such later date as may be determined by the Company. Each three
Class B Warrants are exercisable to purchase one share of Common Stock for an
aggregate exercise price of $3.25, through July 31, 1997, or such later date
as may be determined by the Company. Commencing on August 1, 1997 (or such
later date as may be determined by the Company, through the October 19, 1998
expiration date of the Warrants, each share of Common Stock will be issuable
upon the exercise of ten Warrants (together with the payment of the exercise
price of $4.50 for the Class A Warrants and $5.50 for the Class B Warrants).
The Warrants were issued in connection with the Company's initial public
offering. The exercise prices of the Warrants were previously reduced in
order to encourage holders to exercise them. The Common Stock to be sold by
the selling stockholders was issued to them in connection with the
acquisition by the Company of stock or assets of unaffiliated entities.
There can be no assurance that all or any part of the Warrants will be
exercised. All expenses incurred in connection with this offering are being
borne by the Company (which expenses are estimated to be approximately
$30,000). The Company will also pay a fee of 5% of the exercise price of
each Warrant exercised, provided (i) the market price of the Common Stock on
the date the Warrant was exercised was greater than the Warrant exercise
price on that date, (ii) the exercise price of the Warrant was solicited by a
member of the NASD, (iii) the Warrant was not held in a discretionary
account, (iv) the disclosure of compensation arrangements was made both at
the time of this Offering and at the time of exercise of the Warrant, (v) the
solicitation of the exercise of the Warrant was not a violation of
Regulation M under the Securities Exchange Act of 1934, and (vi) the
solicitation agent is designated in writing as the soliciting NASD member.
The Common Stock, Class A Warrants and Class B Warrants are traded on
The Nasdaq SmallCap Market ("Nasdaq"), under the symbol RUOK, RUOKW and
RUOKZ, respectively. On May 7, 1997, as reported by Nasdaq, the closing bid
price for the Common Stock, Class A Warrants and Class B Warrants was $1.8125,
$.50 and $.125, respectively.
_________________________________
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF
RISK AND SHOULD NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS." (PAGE 5)
_________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 8, 1997
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission, Washington, D.C. (the "Commission") a Registration
Statement on Form S-3 under the Securities Act of 1933 (the
"Act") with respect to the securities offered by this Prospectus.
For further information with respect to the securities offered
hereby, reference is made to the Registration Statement and to
the exhibits listed in the Registration Statement.
The Company is subject to the information requirements
of the Securities Exchange Act of 1934 and in accordance
therewith files reports, proxy statements and other information
with the Commission. Reports, Proxy Statements and other
information can be inspected and copies made at the public
reference facilities of the Commission, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as
the following Regional Offices: 7 World Trade Center, New York,
New York, 10007, and Room 1204 Everett McKinley Dirksen Building,
219 South Dearborn Street, Chicago, Illinois, 60604. Copies can
also be obtained at prescribed rates from the Commission's Public
Reference Section, Judiciary Plaza, 450 Fifth Avenue, N.W.,
Washington, D.C. 20549. The Commission also maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrant's that file
electronically.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for its fiscal
year ended June 30, 1996 (including Amendments No. 1 and 2
thereto), the Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1996 (including Amendments No. 1 and 2
thereto), the Quarterly Report on Form 10-QSB for the quarter
ended December 31, 1996 (including Amendments No. 1 and 2
thereto), and the description of the Company's Common Stock
contained in its Registration Statement on Form S-3 filed with
the Commission on April 11, 1996, as amended, and the Company's
Reports on Form 8-K, dated as of September 30, 1996, and March
12, 1997, all of which have been previously filed with the
Commission, are incorporated in this Prospectus by reference.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date hereof and prior to the termination of the offering made
hereby are also incorporated by reference herein and made a part
hereof from the date of filing of such documents. Any statement
contained in a document incorporated by reference herein is
modified or superseded for all purposes to the extent that the
statement contained in this Prospectus or in any other
subsequently filed document which is incorporated by reference
modifies or replaces such statement. The Company will provide
without charge to each person, including any beneficial owner, to
whom a copy of this Prospectus is delivered, upon the written or
oral request of such person, a copy of all documents incorporated
herein by reference (not including the exhibits to such
documents, unless such exhibits are specifically incorporated by
reference in such documents).
PROSPECTUS SUMMARY
The following is a summary of certain information
contained in this Prospectus and is qualified in its entirety by
the more detailed information, Consolidated Financial Statements
and Notes thereto appearing elsewhere in this Prospectus.
The Company
Response USA, Inc. (the "Company"), through its wholly-owned
subsidiaries, Response Ability Systems, Inc. ("Systems") and
Emergency Response Systems, Inc. ("ERS"), markets a personal
emergency response system, ("PERS") which enables users, such as
elderly or disabled persons, to transmit a distress signal using
a portable transmitter which is part of the PERS. When activated
by the pressing of a button, the transmitter sends a radio signal
to a receiving base installed in the user's home. The receiving
base relays the signal over telephone lines to a monitoring
station which provides continuous monitoring services. The
monitoring station personnel verify the nature of the emergency
and contact the appropriate emergency authorities in the user's
area. The Company, through its wholly-owned subsidiary United
Security Systems, Inc. ("USS"), is also engaged in the sale,
installation, continuous monitoring and maintenance of electronic
security systems.
Systems commenced operations in 1985 and, by 1987, had
sold over 4,000 franchises in 42 states for the distribution of
PERS. Systems marketed the franchises to individuals who
purchased such franchises as a part-time business or second
source of income. The Company believes such franchisees were
poorly capitalized. Systems incurred substantial losses in its
franchise operations as costs to establish, maintain, promote and
service the franchise network exceeded the revenues from the sale
of the franchises. Such losses resulted in Systems filing a
petition for reorganization under Chapter 11 of the Federal
Bankruptcy Act in October 1987. While in reorganization, Systems
discontinued its franchise sales operations, and the Company has
no intention of resuming new franchise sales, although a number
of its original franchisees are still actively utilizing the
Company's monitoring and purchasing its PERS. Since the
confirmation of Systems' Plan of Reorganization in January 1990,
Systems has devoted substantial efforts to broadening and
diversifying its marketing programs to sell PERS units through
national pharmacy chains including Revco D.S., Inc and K-Mart
pharmacies, rather than direct marketing.
The Company sells its PERS products directly to the
consumer and through franchisees in the United States and a
distributor in Canada under the "Instant Response" and "Response
Ability" trade names. The Company also sells and leases PERS
through its institutional division to hospitals and home health
care agencies. In addition, the Company provides monitoring
services through a third-party monitoring station located in
Euclid, Ohio, to tens of thousands of users of the Company's
PERS. The Company also sells PERS and related accessories, which
are manufactured by a contractor located in Florida, to
independent home alarm and other vendors under private label
programs.
The Company's electronic security business utilizes
electronic devices installed in customers' businesses and
residences to provide detection of events, such as intrusion or
fire, surveillance and control of access to property. The
detection devices are monitored by the same third-party
monitoring station which monitors the Company's PERS units. In
some instances, commercial customers may monitor these devices at
their own premises or the devices may be connected to local fire
or police departments. The products and services marketed in the
electronic security services industry range from residential
systems that provide basic entry and fire protection to more
sophisticated commercial systems. USS commenced operation in
March 1994, upon the acquisition of substantially all of the
assets of two companies engaged in the electronic security
business.
The Company, then known as Larsen Software Corporation
and originally incorporated in Utah in June 1984 for the purpose
of acquiring computer software, consummated an intra-state
offering in 1985 in which it issued 184,642 shares of common
stock and received proceeds of $25,850 which were utilized
principally to pay accounting and administrative costs. The
Company, which changed its state of incorporation to Nevada in
September 1989, did not engage in any significant business
operations until August 1990 when it acquired all of the
outstanding common stock of Systems. In connection with its
acquisition of Systems, the Company changed its name to Lifecall
America, Inc. Systems was incorporated in Delaware in 1985 to do
business as a franchisor of direct sellers of PERS, and engaged
principally in such business until October 1987, when it filed a
petition for reorganization under Chapter 11 of the Federal
Bankruptcy Act. Systems' plan of reorganization (the "Plan of
Reorganization") was confirmed by the U.S. Bankruptcy Court in
January 1990, and became effective in February 1990. In March
1992, the Company changed its name to Response USA, Inc. and its
state of incorporation from Nevada to Delaware. ERS was
incorporated in Delaware in 1994. References to the Company
include Systems, ERS and USS.
The Company's executive offices are located at 11-H
Princess Road, Lawrenceville, New Jersey 08648, and its telephone
number at that address is (609) 896-4500.
Recent Developments
The Company completed a financing agreement with Mellon
Growth Finance, a division of Mellon Bank, N.A. ("Mellon") on
June 30, 1996, providing the Company with a revolving term loan
of up to $15,000,000. As of December 31, 1996, the Company has
drawn upon approximately $8,950,000 of such available credit.
The loan bears interest at 1.75% above Mellon's prime interest
rate and matures on June 30, 2000.
Concurrently with the closing of the Mellon financing,
the Company completed the private placement of 7,500 shares of
1996 Series A Redeemable Convertible Preferred Stock (the "Series
A Preferred Stock"), for an aggregate of $7,500,000. Each share
of Series A Preferred Stock is convertible into shares of Common
Stock, at the sole option of the holder, based upon the following
formula:
The Premium + 1,000
-------------------
Conversion Price
Where (a) the Premium equals 10% multiplied by the number of days
from the date the purchaser deposited funds for the purchase of
the Series A Preferred Stock through and including the date of
conversion divided by 365, and (b) the Conversion Price is equal
to the lesser of (i) 80% of the average closing bid price of the
Common Stock as reported by Nasdaq for the five trading days
preceding the date of conversion, or (ii) $5.00 per share. The
Company may redeem all or any portion of the Premium for cash in
lieu of converting such Premium into shares of Common Stock upon
the foregoing conversion terms. Each holder may, in their sole
discretion, elect to convert up to 50% of the shares of Series A
Preferred Stock held beginning August 16, 1996 and may convert
the balance beginning September 10, 1996. After June 1, 1999,
the Company may require conversion of the Series A Preferred
Stock upon the foregoing conversion terms.
In September 1996, as a result of then current market
conditions for the Common Stock, the Company suspended conversion
of the Series A Preferred Stock. In particular, there was a
dramatic increase in the "short" position for the Common Stock
from July through August, 1996. During this same period, the
price of the Common Stock declined from $7.375 to $4.656. The
Company commenced an investigation into the trading activity,
including discussions with some of the Company's market-makers
and a review of trading activity, the Company could find no basis
for the increase in the short position or the decline in the
price. Lacking any other explanation, and based upon a practice
sometimes used by investors after the purchase of convertible
securities, the Company believed that certain investors may have
been selling the Common Stock short in anticipation of the
effectiveness of the registration statement which registered the
sale of the Common Stock issuable upon conversion of the
Preferred Stock. In the weeks that followed the effectiveness of
the registration statement, the Company received requests for
significant conversions into shares of Common Stock.
The Company believes that it is not in the best interests of
the Company to allow conversions which could result in a further
precipitous drop in the market value of the Common Stock.
Although the Company was concerned about this trading activity,
and in fact retained the services of an expert to review the
trading activity to determine if there were any improprieties,
the Company did not believe that it had a sufficient basis to
advise the Securities and Exchange Commission ("SEC") or The
Nasdaq Stock Market of the source of the trading activity.
Furthermore, the Company was concerned about the impact on the
overall market for its securities. The Company sold the
preferred stock with the belief that the investors in the
offering would hold their preferred stock as an investment rather
than selling at the first opportunity. The unusual trading
activity was not necessarily illegal or improper under the rules
and regulation of either the SEC or Nasdaq.
The Company and certain holders of the Series A Preferred
Stock have been actively negotiating an alternative to the
prescribed conversion. To date there has been no significant
progress in these negotiations.
On January 2, 1997, Lake Management LDC and KA Investments
LDC, each holders of the Preferred Stock, filed a Complaint in
the Court of Chancery of the State of Delaware against the
Company challenging among other things, the Company's decision to
suspend conversion and seeking, among other things, specific
performance under a Certificate of Designation to convert their
Preferred Stock to Common Stock of the Company. The case is
captioned Lake Management LDC and KA Investments LDC v. Response
USA, Inc., Civil Action No. 15449. On February 10, 1997, the
Company responded to the Complaint by filing an Answer, Defenses
and Counterclaim. A Reply to the Counterclaim was filed on March
3, 1997.
On February 18, 1997, Halifax Fund, L.P. ("Halifax"),
another holder of the Preferred Stock, filed a Complaint, a
Motion for a Preliminary Injunction and a Motion for Expedited
Proceedings in the Court of Chancery of the Date of Delaware
against the Company also challenging, among other things, the
Company's decision to suspend conversion and seeking, among other
things, specific performance under a Certificate of Designation
to convert its Preferred Stock to Common Stock. On March 5,
1997, the Court held a conference and denied Halifax's request
for a hearing on its motion for a preliminary injunction. On
March 11, 1997, Halifax filed a second Motion for a Preliminary
Injunction. The Court held a telephonic conference on March 12,
1997 and denied Halifax's request for a hearing on its second
preliminary injunction motion. Halifax filed a motion for
summary judgment to which the Company responded, and the court
has scheduled a hearing on that motion for May 13, 1997.
The Company may use a substantial portion of the proceeds
from the exercise of Warrants, if any, to repurchase some or all
of the outstanding Series A Preferred Stock. The possibility of
such use of the proceeds from the exercise of the Warrants was a
significant factor in the Company's determination to lower the
exercise price of the Warrants. There can be no assurance that
any holders of the Series A Preferred Stock will accept an offer
for repurchase of their shares. Furthermore, the Company may
again permit the conversion of Series A Preferred Stock into
shares of Common Stock at any time. As of December 31, 1996,
6,890 shares of Series A Preferred Stock remain outstanding.
Based on the current market price for the Common Stock and the
original conversion terms of the Series A Preferred Stock, such
shares would convert into an aggregate of 5,295,539 shares of
Common Stock. See "Risk Factors - Conversion of Series A
Preferred Stock."
The Company has been considering a number of additional
alternatives to provide financing for the Company's growing
operations. As of the date hereof, none of these financing
opportunities are probable.
The Offering
Securities Offered 4,035,095 shares of
Common Stock, of which 1,233,381 shares are
issuable upon the exercise of 3,700,142 Class
A Warrants, 1,481,950 shares are issuable
upon the exercise of 4,445,848 Class B
Warrants and 1,319,864 shares are currently
outstanding and offered for resale by selling
stockholders.
Use of Proceeds Assuming all of the Class
A Warrants and Class B Warrants are
exercised, of which there can be no
assurance, the Company will receive an
aggregate of $3,083,452 and $4,816,337,
respectively, less expenses of approximately
$30,000 and any Warrant solicitation fee
which may be paid. The net proceeds from
the sale of Common Stock offered hereby
offered hereby upon the exercise of Warrants
will be used for the possible repurchase of
shares of Series A Preferred Stock and for
working capital purposes. The Company will
not receive any proceeds from the sale of
Common Stock by the selling stockholders.
Risk Factors The securities offered
hereby involve a high degree of risk. See
"RISK FACTORS."
Nasdaq Trading
Symbols Common Stock - RUOK
Class A Warrants - RUOKW
Class B Warrants - RUOKZ
RISK FACTORS
THIS OFFERING INVOLVES SUBSTANTIAL INVESTMENT RISK AND
COMMON STOCK SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD
THE LOSS OF THEIR ENTIRE INVESTMENT. IN EVALUATING AN INVESTMENT
IN THE COMPANY AND ITS BUSINESS PRIOR TO PURCHASE, PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AS
WELL AS OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS:
Unprofitable Operations; Significant Obligations. The
Company incurred losses of $3,030,830, $4,411,898 and $3,887,768
for the years ended June 30, 1995 and June 30, 1996, and the six
months ended December 31, 1996, respectively. The Company is
required to pay the long-term indebtedness of Systems in
connection with Systems Plan of Reorganization, through the year
2000. The Company has funded its operations through various
private placements of its securities, including the sale of the
Series A Preferred Stock, and through debt financing, including
the Mellon financing. In this regard, the Company expects to
incur significant interest expense as a result of the Mellon
financing. In the past, the Company has used external sources of
funding to finance its operations (including its debt service
requirements) and expects to continue to use external sources of
funding for such purpose until the Company's operations become
profitable. However, there can be no assurance that such funds
will continue to be available if needed. The inability to
provide for its working capital needs would seriously inhibit the
Company's development and adversely affect its results of
operations and prospects.
Possible Conversion of Series A Preferred Stock In
September 1996, as a result of then current market conditions for
the Common Stock, the Company suspended conversion of the Series
A Preferred Stock. The Company and certain holders of the Series
A Preferred Stock have been actively negotiating an alternative
to the prescribed conversion. The Company intends to offer to
repurchase some or all of the outstanding Series A Preferred
Stock. There can be no assurance that any holders of the Series
A Preferred Stock will accept an offer for repurchase of their
shares. If the Series A Preferred Stockholders do not accept
such an offer, they may seek to compel the Company to allow
conversion to Common Stock and/or seek monetary damages resulting
from their inability to convert their shares. Furthermore, the
Company may again permit the conversion of Series A Preferred
Stock into shares of Common Stock at any time. Based on the
current market price for the Common Stock and the original
conversion terms of the Series A Preferred Stock, such shares
would convert into an aggregate of [ ] shares of Common Stock.
Consequences of Default under Plan of Reorganization.
The Company's wholly-owned subsidiary, Systems, filed a petition
for reorganization under Chapter 11 of the Federal Bankruptcy Act
in October 1987. Systems' Plan of Reorganization was confirmed
by the U.S. Bankruptcy Court in January 1990, and became
effective in February 1990. The Plan of Reorganization provides
for, among other things, long-term payments totalling
approximately $2.8 million to secured and unsecured pre-petition
creditors and for unpaid state and federal taxes. As of June 30,
1996, deferred payment obligations to such pre-reorganization
creditors totalled $374,058, which are payable in varying
installments (assuming the adherence to the repayment schedule),
through the year 2000, as long as there are no defaults (failure
to make timely payments) under the Plan of Reorganization. In
the event that the Company should default in payment of these
deferred obligations, Systems' pre-reorganization creditors could
seek appropriate relief in the bankruptcy court, the result of
which could range from dismissal or conversion of Systems'
bankruptcy to a Chapter 7 proceeding requiring liquidation of
Systems, or modification of Systems' Plan of Reorganization,
which could have a material adverse effect upon the Company. Any
such modified plan could require the Company to pay more to
prepetition creditors than the amounts required under the
existing Plan of Reorganization. To date, payments under the
Plan of Reorganization have been made in a timely fashion.
Dependence on Key Personnel. The Company believes that
it is dependent to a significant degree on the services of
Richard M. Brooks, its President, Chief Executive and Financial
Officer and Ronald A. Feldman, its Chief Operating Officer. The
Company has purchased key person insurance on the lives of
Messrs. Brooks and Feldman in the amounts of $3,000,000 (payable
to Mellon Bank) and $1,000,000 (payable to the Company)
respectively. There can be no assurance that such insurance
would be sufficient to compensate the Company in the event of the
death of Mr. Brooks or Mr. Feldman. In addition, the Company has
entered into five-year employment agreements with Messrs. Brooks
and Feldman, effective on October 23, 1992, as amended to expire
on June 30, 2000, but there can be no assurance that Mr. Brooks
will remain with the Company during such term or thereafter. In
the event that Mr. Brooks or Mr. Feldman or other key personnel
should die, become incapacitated, resign, otherwise not remain
with the Company or for any other reason be unable to perform
their duties, there can be no assurance that the business and
operations of the Company would not be adversely affected.
Competition and Markets. The personal emergency
response and electronic security services industries are highly
competitive. There are numerous companies of comparable size to,
or larger than, the Company and many smaller companies that sell
PERS and electronic security service equipment and offer
monitoring services. Many of the Company's competitors have
significantly greater financial resources and a larger sales
organization than the Company. In addition, while the Company
generally competes with sellers of PERS and security services,
there are numerous large national and multinational companies,
with far greater resources than the Company, that compete in the
information services industry and the electronic security
services industry. The Company competes for the acquisition of
new accounts on the basis of its reputation in the industry. The
Company also competes in connection with the acquisition of
blocks of existing accounts based on the financial package its
offers the acquirees. There is no assurance that such larger
companies will not attempt to enter the PERS market in the
future, or, if they do, that the Company will be able to compete
successfully.
State and Federal Regulation. As a seller of personal
emergency response units and electronic security systems, the
Company is subject to laws and regulations administered by
various states, the Federal Communications Commission, the Food
and Drug Administration and the Federal Trade Commission. Some
states require licenses or permits to sell PERS and electronic
monitoring systems and to provide security services. In
addition, federal and state regulations, including without
limitation, consumer protection laws, govern the promotion and
advertising activities of the Company and other sellers of the
Company's products and services. The Company's relationship with
its franchisees also is subject to regulation under federal and
state franchise laws. Compliance with such laws and regulations
is costly, and changes in laws and regulations could increase the
cost of compliance and materially affect the Company in other
respects not presently foreseeable. In the past, Systems has
been the subject of enforcement actions brought under state and
federal law to enforce certain of these laws and regulations
concerning the sales of franchises. The Company believes that it
is in compliance with all material state and Federal regulations.
There can be no assurance that the Company will not be subjected
to enforcement actions in the future.
Products Liability and Errors and Omissions. The
Company is subject to claims by customers that a PERS unit was
defective, that the Company has failed to provide monitoring
services as required, or that some action or inaction by the
Company or failure of its products or services has caused or
contributed to injury to the customer. While the Company has
liability insurance which it deems adequate ($1,000,000 per
occurrence and $5,000,000 in the aggregate), there can be no
assurance that the Company will be able to maintain such
insurance or will not be subjected to claims in excess of its
insurance coverage.
Prior Sale of Unregistered Securities. In February
1996, the Company consented to the issuance of an Order
Instituting Proceedings pursuant to the Securities Act of 1933
(the "Securities Act") and the Securities Exchange Act of 1934
and Findings and Order of the Securities and Exchange Commission
(the "Finding"), without admitting or denying any allegations or
facts contained therein. In July 1993, the Company sold 60,000
shares of Common Stock pursuant to what it claimed to be an
exemption from registration under Regulation S of the Securities
Act. The Finding stated that such sales were made under
circumstances in which the Company knew or should have known that
such exemption was not available. Consequently, the Finding
stated, the sales were made in violation of the registration
provisions of the Securities Act. The Company consented to
permanently cease and desist from committing or causing any
violation, and any future violation, of Section 5 of the
Securities Act.
Limitation of Directors' Liability. The Company's
Certificate of Incorporation limits the liability of the
Company's directors for breach of their fiduciary duty of care to
the Company. The effect of this provision is to eliminate the
directors' liability for monetary damages resulting from
negligent or grossly negligent conduct in most situations. A
director remains responsible for damages to the Company resulting
from a breach of his duty of loyalty to the Company, a failure to
act in good faith, intentional misconduct, a knowing violation of
law, receipt of an improper personal benefit, or approval of an
illegal dividend or stock purchase. Liabilities under the
federal securities laws also are not affected by this provision,
as the SEC views such provisions as unenforceable.
Authorization and Discretionary Issuance of Preferred
Stock. The Company's Certificate of Incorporation authorizes the
issuance of "blank check" preferred stock with such designations,
rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue preferred stock
with dividend, liquidation, conversion, voting or other rights
which would adversely affect the voting power or other rights of
the holders of the Company's Common Stock. In the event of
issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company, which could have
the effect of discouraging bids for the Company and thereby
prevent stockholders from receiving the maximum value for their
shares. There can be no assurance that preferred stock of the
Company will not be issued at some time in the future.
Shares Eligible for Future Sale; Market Overhang from
Outstanding Warrants and Options. As of December 31, 1996, the
Company had outstanding 4,130,908 shares of Common Stock,
substantially all of which shares are freely transferable without
restriction or further registration under the Securities Act.
For the "restricted securities," under Rule 144, if certain
conditions are met, persons who satisfy a two year "holding
period" may sell within any three-month period a number of such
shares which does not exceed the greater of one percent of the
total number shares outstanding or the average weekly trading
volume of such shares during the four calendar weeks prior to
such sale. After a three-year holding period is satisfied,
persons who are not "affiliates" of the issuer of the securities
are permitted to sell such shares without regard to these volume
restrictions.
Warrants and options to purchase the following number
of shares of Common Stock are outstanding: (i) 1,233,381 shares
issuable upon exercise of Class A Warrants at a price of $2.50
per share, (ii) 1,481,950 shares issuable upon exercise of Class
B Warrants at a price of $3.50 per share, (iii) 49,700 shares
issuable upon exercise of Class C Warrants, (iv) 2,868,400 shares
issuable upon exercise of options issued to officers, directors
and employees of the Company, (v) 12,500 shares issuable upon
conversion of convertible debentures, (vi) 175,000 shares
issuable upon exercise of the warrants at $4.50 per share, (vii)
1,032,135 shares issuable at a price of $3.25 per share in
connection with the Mellon financing, (viii) 5,295,539 shares
issuable upon conversion of the Series A Preferred Stock (based
on the current price of the Common Stock and assuming the Company
redeems the shares otherwise issuable with respect to the
Premium), assuming the Series A Preferred Stock is not
repurchased by the Company.
No prediction can be made as to the effect, if any,
that sales of shares of Common Stock or the availability of such
shares for sale will have on the market prices of the Company's
securities prevailing from time to time. The possibility that
substantial amounts of currently restricted shares or newly
issued shares of Common Stock into the public market may
adversely affect prevailing market prices for the Common Stock
and could impair the Company's ability to raise capital in the
future through the sale of equity securities.
Nasdaq Maintenance Requirements; Possible Delisting of
Securities from Nasdaq System. The Board of Governors of the
National Association of Securities Dealers, Inc. has established
certain standards for the continued listing of a security on
Nasdaq. The maintenance standards require, among other things,
that an issuer have total assets of at least $2,000,000 and
capital and surplus of at least $1,000,000; that the minimum bid
price for the listed securities be $1 per share; and that the
minimum market value of the "public float" be at least
$1,000,000. A deficiency in either the market value of the
public float or the bid price maintenance standard will be deemed
to exist if the issuer fails the individual stated requirement
for ten consecutive trading days. If an issuer falls below the
bid price maintenance standard, it may remain on Nasdaq if the
market value of the public float is at least $1,000,000 and the
issuer has $2,000,000 in equity. The Company's current Common
Stock price is above $1 per share, however, there can be no
assurance that the Company will continue to satisfy the
requirements for maintaining a Nasdaq listing. If the Company's
securities were excluded from Nasdaq, it would adversely affect
the prices of such securities and the ability of holders to sell
them.
Penny Stock Regulation. In the event that the Company
is unable to satisfy Nasdaq's maintenance requirements, trading
would be conducted in the "pink sheets" or the NASD's Electronic
Bulletin Board. In the absence of the Common Stock being quoted
on Nasdaq, or the Company having $2,000,000 in net tangible
assets, trading in the Common Stock would be covered by Rules 15g-
1 through 15g-6 promulgated under the Securities Exchange Act of
1934 for non-Nasdaq and non-exchange listed securities. Under
such rules, broker/dealers who recommend such securities to
persons other than established customers and accredited investors
must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a
transaction prior to sale. Securities also are exempt from these
rules if the market price is at least $5.00 per share.
The SEC adopted regulations that generally define a
penny stock to be any equity security that has a market price of
less than $5.00 per share, subject to certain exceptions (such
exceptions including an equity security listed on Nasdaq and an
equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in
continuous operation for three years, (ii) net tangible assets of
at least $5,000,000, if such issuer has been in continuous
operation for less than three years, or (iii) average revenue of
at least $6,000,000 for the preceding three years). Unless an
exception is available, the regulations require the delivery,
prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks
associated therewith.
If the Company's Common Stock were subject to the
regulations on penny stocks, the market liquidity for the
Company's Common Stock could be severely affected by limiting the
ability of broker/dealers to sell the Company's Common Stock and
ability of purchasers in this offering to sell their securities
in the secondary market. There is no assurance that trading in
the Company's securities will not be subject to these or other
regulations that would adversely affect the market for such
securities.
Lack of Dividends. The Company has never paid and does
not plan to pay in the foreseeable future any dividends on its
Common Stock, although it is not restricted from doing so.
USE OF PROCEEDS
Assuming all of the Class A Warrants and Class B
Warrants are exercised, of which there can be no assurance, the
Company will receive an aggregate of $3,083,452 and $4,816,337,
respectively, less expenses of approximately $30,000 and any
Warrant solicitation fee which may be paid. The net proceeds
from the sale of Common Stock offered hereby upon exercise of the
Warrants will be used for the possible repurchase of shares of
Series A Preferred Stock and for working capital purposes. Any
proceeds not used for the repurchase of Series A Preferred Stock
will be used for working capital purposes. The Company will not
receive any proceeds from the sale of Common Stock by the selling
stockholders.
PLAN OF DISTRIBUTION
The shares offered hereby may be offered and sold from
time to time by Warrantholders, or by pledgees, donees, transferees
or other successors in interest. Such offers and sales may be made
from time to time on Nasdaq or otherwise, at prices and on terms
then prevailing or at prices related to the then-current market
price, or in negotiated transactions. The methods by which the
shares may be sold may include, but not limited to, the following:
a block trade in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; purchases
by a broker or dealer as principal and resale by such broker or
dealer for its account; an exchange distribution in accordance
with the rules of such exchange; ordinary brokerage transactions
and transactions in which the broker solicits purchasers;
privately negotiated transactions; short sales; and a combination
of any such methods of sale. In effecting sales, brokers or
dealers engaged by the stockholders or Warrantholders may receive
commissions or discounts from the Warrantholders or from the
purchasers in amounts to be negotiated immediately prior to the
sale. The stockholders or Warrantholders may also sell such shares
in accordance with Rule 144 under the Securities Act.
The Company is bearing all of the costs relating to the
registration of the shares. Any commissions, discounts or other
fees payable to the broker, dealer, underwriter, agent or market
maker in connection with the sale of any of the shares will be
borne by the Warrantholders.
Shares Beneficial Ownership
Stockholder Offered Prior to Sale After Sale
- ----------- ------- ------------- ----------
BKR, Inc. 1,094,164 1,094,164 0
John Ives 12,750 12,750 0
Ed Sigler 12,250 12,250 0
Frank Fishman 12,000 12,000 0
Robert Gross 700 700 0
Carlos Raposo 90,000 90,000 0
Michael Seidl 90,000 90,000 0
Bruce Goldenberg, MD TTEE
Bruce D. Goldenberg
Profit Sharing Plan 8,000 8,000 0
LEGAL MATTERS
The validity of the shares of Common Stock and Warrants
under applicable state law will be passed upon for the Company by
Schneck Weltman Hashmall & Mischel LLP, 1285 Avenue of the
Americas, New York, New York 10019.
EXPERTS
The financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Fishbein & Company, P.C.,
Independent Certified Public Accountants, to the extent indicated
in their reports with respect thereto, and are included herein in
reliance upon the authority of said firms as experts in
accounting and auditing in giving said reports.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the Company and to the Selling
Stockholders pursuant to the provisions of the Company's
Certificate of Incorporation, the Company has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted
by such officer, director or controlling person in connection
with the securities being registered, the Company will, unless in
he opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The amount of expenses (other than underwriting
discounts and commissions) in connection with the issuance and
distribution of the shares registered hereby are set forth in the
following table. All the amounts are estimates, except the
registration fee and the NASD filing fee.
Registration Fee $ 2,140
Legal fees and expenses 8,000
Accounting fees and expenses 6,000
Miscellaneous 13,860
-------
Total $ 30,000
Item 15. Indemnification of Directors and Officers.
Article V of the Company's Bylaws provides the
following:
5.1 Right to Indemnification. The Corporation
shall indemnify any person who was or is a party or threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (collectively, a "proceeding"), by reason of the
fact whether civil, criminal, administrative or investigative
(collectively, a "proceeding"), by reason of the fact such person
is or was a director or officer of the Corporation or a
constituent corporation absorbed in a consolidation or merger
(hereinafter, a "constituent corporation"), or is or was serving
at the request of the Corporation or a constituent corporation as
a director, officer, partner, employee or agent of another
corporation, partnership, joint venture or other enterprise or
entity, or is or was a director or officer of the Corporation
serving at its request as an administrator, trustee or other
fiduciary of one or more of the employee benefit plans, if any,
of the Corporation or another entity which may be in effect from
time to time (any such person, an "Authorized Representative"),
against all expenses, liability and loss actually and reasonably
incurred or suffered by such Authorized Representative in
connection with such proceeding, whether or not the indemnified
liability arises or arose from any proceeding by or in the right
of the Corporation, to the extent that such Authorized
Representative is not otherwise indemnified and to the extent
that such indemnification is not prohibited by law as it
presently exists or may hereafter be amended.
5.2 Advance of Expenses. The Corporation shall
pay all reasonable expenses incurred by an Authorized
Representative in defending a Proceeding in advance of the final
disposition of such Proceeding, upon receipt by the Corporation
of a written undertaking by or on behalf of such Authorized
Representative to repay all amounts advanced (without interest
unless a court of competent jurisdiction determined the payment
of interest is required by law) if it shall ultimately be
determined that he is not entitled to be indemnified by the
Corporation.
5.3 Procedure for Determining Permissibility. To
determine whether any indemnification under this Article V is
permissible, the Board by a majority vote of a quorum consisting
of directors not parties to such proceeding may, and on request
of any Authorized Representative seeking indemnification shall be
required to, determine in each case whether the applicable
standards in any applicable statute have been required to,
determine in each case whether the applicable standards in any
applicable statute have been met, or such determination shall be
made (a) the stockholders of the Corporation or (b) by
independent legal counsel in a written opinion if such quorum is
not obtainable, or, even if obtainable, a majority vote of a
quorum of disinterested directors so directs; provided that, if
there has been a change in control of the Corporation between the
time of the action or failure to act giving rise to the claim for
indemnification and the time such claim is made, at the option of
the Authorized Representative seeking indemnification, the
permissibility of indemnification shall be determined by
independent legal counsel. If a claim for indemnification under
this Article is not paid in full within ninety (90) days after a
written claim therefor has been received by the Corporation, the
claimant may file suit to recover the unpaid amount of such
claim, and the Corporation shall have the burden of proving that
the claimant was not entitled to the requested indemnification
under applicable law. The reasonable expenses of any Authorized
Representative in prosecuting a successful claim for
indemnification, and the fees and expenses of any independent
legal counsel engaged to determine permissibility of
indemnification, shall be borne by the Corporation. For purposes
of this paragraph, "independent legal counsel" means legal
counsel other than that regularly or customarily engaged by or on
behalf of the Corporation.
5.4 Proceedings Initiated by Authorized
Representatives. Notwithstanding any other provision of this
Article V, the Corporation shall be requested to indemnify an
Authorized Representative in connection with a proceeding
initiated by such Authorized Representative only if the
proceeding was authorized by the Board.
5.5 Indemnification Not Exclusive; Inuring of
Benefit. The indemnification provided by this Article V shall
not be deemed exclusive of any other right to which one seeking
indemnification may have or hereafter acquired under any statute,
provision of the Certificate of Incorporating, these Bylaws,
agreement, vote of stockholders or disinterested directors of
otherwise, and shall inure to the benefit of the heirs, executors
and administrators of any person.
5.6 Insurance and Other Indemnification. The
Board shall have the power to (i) authorize the Corporation to
purchase and maintain, at the Corporation's expenses, insurance
on behalf of the Corporation and on behalf of others to the
extent that power to do so has not been prohibited by applicable
law, and (ii) give other indemnification to the extent not
prohibited by applicable law.
5.7 Modification or Repeal. Any modification or
repeal of any provision of this Article V shall not adversely
affect any right or protection of an Authorized Representation
existing hereunder with respect to any act or omission occurring
prior to such modification or repeal.
Article Nine of the Company's Certificate of
Incorporation provides the following:
A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for
monetary damages for any breach of fiduciary duty by a director
except for (i) any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. Any repeal or
modification of this paragraph shall not adversely affect any
right or protection of a director of the Corporation existing
hereunder with respect to any act or omission of occurring prior
to such repeal or modification.
If the Delaware General Corporation Law is
hereafter amended to authorize the further elimination or
limitation of the liability of a director, then the liability of
a director of the Corporation shall be eliminated or limited to
the fullest extend permitted by the amended Delaware General
Corporation Law. Any repeal or modification of this paragraph
shall not adversely affect any right or protection of a director
of the corporation existing hereunder with respect to any act or
omission occurring prior to such repeal or modification.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
2(a) - Agreement and Plan of Reorganization dated
August 9, 1990, by and among the Company (Corsica
Capital Corp.), Management of Corsica Capital
Corp. and Lifecall Systems, Inc.(1)
2(b) - Plan and Agreement of Reorganization dated May
13, 1991, by and among the Company, Lifecall
Systems, Inc., Monitor Emergency Alert Lifecall
Systems, Inc., and its sole stockholder(1)
2(c) - Plan and Agreement of Merger dated March 18,
1992 by and between Response USA, Inc. (Delaware)
and Lifecall America, Inc.(1)
2(d) - Delaware Certificate of Ownership and Merger
Merging Response USA, Inc., a Nevada Corporation
with and into its wholly-owned subsidiary Response
USA, Inc., a Delaware corporation(1)
2(e) - Nevada Articles of Merger of Response USA,
Inc. (Formerly Lifecall America, Inc.), a Nevada
corporation, into Response USA, Inc., a Delaware
corporation(1)
3(a) - Certificate of Incorporation of the Company(1)
3(b) - Bylaws of the Company(1)
3(c) - Certificate of Designation of 1996 Series A
Preferred Stock
4(a) - Form of Common Stock Certificate(1)
4(b) - Form of Class A Warrant Certificate(1)
4(c) - Form of Class B Warrant Certificate(1)
4(d) - Form of Class C Warrant Certificate(1)
4(e) - Form of Warrant Agreement(1)
5 - Opinion of Schneck Weltman Hashmall & Mischel
LLP as to legality of securities being registered
10(a) - Lifecall Systems, Inc. Third Amended Plan of
Reorganization with Order affirming Third Amended
Plan of Reorganization dated January 9, 1990(1)
10(c) - Agreement dated October 31, 1991, by and
between Bucks County Bank & Trust Company and
Lifecall Systems, Inc.(1)
10(d) - Distributorship Agreement, dated October 6,
1987 and as amended December 31, 1990,l by and
between Lifecall systems, Inc. and Teck World
Industries, Inc.(1)
10(i) - Emergency Backup Service Agreement dated June
13, 1991, by and between Lifecall Emergency
Response Center, Inc., and the Emergency Response
People, Inc.(1)
10(j) - First Amended and Restated License and Royalty
Agreement dated as of July 1, 1991, by and between
Lifecall Systems, Inc. and the Emergency Response
People, Inc.(1)
10(l) - Master Agreement dated September 6, 1991, by
and between Visiting Nurse Associations of America
and Lifecall Systems, Inc. and attached Member
Agency Form Agreement(1)
10(m) - Agreement dated March 17, 1992 by and between
Synchronal Marketing, Inc. and Lifecall Systems
Inc.(1)
10(s) - Employment Agreement dated August 28, 1992, by
and between the Company and Richard R. Brooks, and
Addendum thereto dated October 1, 1992(1)
10(t) - Employment Agreement dated August 28, 1992, by
and between the Company and Ronald A. Feldman, and
Addendum thereto dated October 1, 1992(1)
10(u) - Consulting Agreement dated January 2, 1992 by
and among the Company, Lifecall Systems, Inc. and
Scott Affrime(1)
10(v) - Consulting Agreement dated May 22, 1986 by and
between LC Products, Inc. and Nevin Jenkins, as
amended(1)
10(w) - Incentive Stock Option Plan of the Company
adopted by the Company's Board on March 18, 1992
and approved by the Company's stockholders on
March 30, 1992(1)
10(x) - Restricted Stock Option Plan of the Company
adopted August 20, 1990, as amended August 30,
1991, January 2, 1992 and March 18, 1992(1)
11 - Calculation of Earnings (Loss) Per Share
22 - Subsidiaries of the Company
24(a) - Consent of Fishbein & Company, P.C.
24(b) - Consent of Schneck Weltman Hashmall & Mischel
(included in Exhibit 5)
1. Filed with the Registrant's registration
statement on Form S-1 (File No. 33-47589), and
incorporated by reference herein.
Item 17. Undertakings.
A. Certificates
The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which it offers or
sells securities, 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 which,
individually or together, represent a fundamental change in
the information set forth in the Registration Statement;
(iii) to include any additional or changed material
information on the plan of distribution; provided, however,
that paragraph (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, to treat each post-
effective amendment as 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 file a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the Offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officer and
controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer has
been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of
the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion
of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in
the City of Lawrenceville and State of New Jersey on the 9th of
May, 1997.
RESPONSE USA, INC
By:/s/RICHARD M. BROOKS
--------------------
Richard M. Brooks,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement on Form S-3 has been signed by
the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/RICHARD M. BROOKS Director, President, Chief May 9, 1997
- -------------------- Executive Officer (Principal
Richard M. Brooks Executive, Financial
Accounting Officer)
/s/RONALD A. FELDMAN Director, Vice President and May 9, 1997
- -------------------- and Chief Operating Officer
Ronald A. Feldman
/s/STUART LEVIN Director May 9, 1997
- ---------------
Stuart Levin
Director
- ---------------
Robert M. Rubin
/s/TODD E. HERMAN Director May 9, 1997
- -----------------
Todd E. Herman
We hereby consent to the use in this Registration Statement on Form S-3
Amendment #2 of Response USA, Inc. of our report dated August 22, 1996
on the consolidated financial statements of Response USA, Inc. contained
in such Registration Statement, and to the reference to us, as appearing
under the headings of "Experts" in Prospectus, which is a part of such
Registration Statement.
Fishbein & Company, P.C.
Elkins Park, Pa.
May 9, 1997
