As filed with the Securities and Exchange Commission
on September 18, 1996
Registration No. 333-____________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________________
INTERNATIONAL NURSING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Colorado 7362 84-1123311
(State of Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Classification Code Number) Identification No.)
Robin M. Bradbury
Suite 400 Suite 400
360 South Garfield Street 360 South Garfield Street
Denver, Colorado 80209 Denver, Colorado 80209
(303) 393-1515 (303) 393-1515
(Address and telephone number (Address and telephone number
of principal executive offices) of agent for service)
Copies to:
Thomas J. Moore, Esq.
Steven E. Segal, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
633 Seventeenth Street, Suite 2800
Denver, Colorado 80202
(303) 291-2600
Approximate date of proposed sale to the public: From time to time after
the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or 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 (the "Securities Act"), other than securities being offered only in
connection with dividend or interest reinvestment plans, please 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: [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Title of Each Offering
Class of Amount Price Proposed Maximum Amount of
Securities to to be per Aggregate Registration
be Registered Registered Security Offering Price Fee
Common Stock, 8,293,133 $2.735(1) $22,681,718.76(1) $7,821.28
par value $.001 shares
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the average of the bid and asked prices of
the Company's Common Stock on the Nasdaq SmallCap Market on September 11,
1996.
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.
____________________
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
____________________
PRELIMINARY PROSPECTUS DATED SEPTEMBER 18, 1996, SUBJECT TO COMPLETION
8,293,133 Shares
INTERNATIONAL NURSING SERVICES
Common Stock
This Prospectus relates to an aggregate of 8,293,133 shares (the
"Shares") of Common Stock, par value $.001 (the "Common Stock"), of
International Nursing Services, Inc. ("International Nursing" or the
"Company"), which may be offered and sold from time to time for the account
of the persons who are identified herein under the heading "Selling
Shareholders" and any other person who obtains the right to sell Shares
hereunder (the "Selling Shareholders"). Certain of the Shares are issuable
or may be issuable to certain of the Selling Shareholders upon (i)
conversion of shares of the Company's 1996 Convertible Preferred Stock, par
value $10,000.00 per share (the "1996 Preferred Stock"), (ii) exercise of
certain warrants to purchase shares of Common Stock at an exercise price of
$2.50 per share (the "Unit Warrants"), (iii) Shares acquired upon
conversion or exercise of additional shares of 1996 Preferred Stock or Unit
Warrants acquired pursuant to the exercise of certain options (the "Unit
Options") received by the purchasers of the 1996 Preferred Stock and Unit
Warrants, and (iv) exercise of certain other warrants to purchase shares of
Common Stock at prices ranging from $1.88 to $2.06 (the "Warrants"). In
addition, certain of the Shares are currently held directly by certain of
the Selling Shareholders. THE COMPANY WILL NOT RECEIVE ANY PROCEEDS FROM
THE SALE OF ANY SHARES. The Company will receive the amount of the
respective exercise prices upon the exercise, if any, of any Unit Warrants
or Warrants. The Company may also receive the amount of the exercise price
payable pursuant to the exercise of any Unit Options and any subsequent
exercise of Unit Warrants acquired pursuant to the exercise of the Unit
Options. See "Background of the Offering," "Use of Proceeds," "Selling
Shareholders" and "Plan of Distribution."
The Shares may be sold from time to time directly by the Selling
Shareholders or by pledgees, donees, assignees, transferees or other
successors in interest. Alternatively, the Shares may be offered from time
to time by the holders to or through brokers or dealers who may act solely
as agent, or who may acquire Shares as principal. The distribution of the
Shares may be effected in one or more transactions that may take place on
the Nasdaq SmallCap Market, including block trades, ordinary broker's
transactions, privately negotiated transactions or through sales to one or
more broker/dealers for resale of such securities as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Usual and customary or specifically
negotiated brokerage fees, commissions or discounts may be paid by these
holders in connection with any such sales, which such fees, commissions or
discounts may be deemed to be "underwriting compensation" within the
meaning of the Securities Act of 1933, as amended (the "1933 Act"). In
connection with such sales, the Selling Shareholders and any participating
brokers or dealers may be deemed "underwriters" as such term is defined in
the 1933 Act. The Company's Common Stock is traded on the Nasdaq SmallCap
Market (symbol: NURS). On September 16, 1996, the closing bid price per
share of Common Stock as quoted on the Nasdaq SmallCap Market was $2-15/16.
_____________________________
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
_____________________________
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 ____________, 1996
No dealer, salesman or other person or entity has been authorized to give
any information or to make any representations not contained in or
incorporated by reference in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or by any other person or entity. All
information contained herein is as of the date of this Prospectus. Neither
the delivery of this Prospectus, nor any sale, distribution or resale made
hereunder shall, under any circumstances, create any implication that there
has been no change in the business or affairs of the Company or in the
facts herein set forth since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, and at the Commission's regional
offices located at 7 World Trade Center, 13th Floor, New York, NY 10048 and
500 West Madison Street, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington DC 20549 at prescribed
rates. The Company's reports, proxy statements and other information filed
with the Commission may also be inspected at the office of the National
Association of Securities Dealers, Inc., 7135 K Street, N.W., Washington,
DC 20006, on which the Company's Common Stock and other securities are
listed for trading.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits thereto) (collectively,
the "Registration Statement") under the 1933 Act with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the Rules and Regulations of the Commission.
For further information, reference is made to the Registration Statement.
Each summary in this Prospectus of information included in the Registration
Statement or any exhibit thereto is qualified in its entirety by reference
to such information or exhibit. The Registration Statement and the
exhibits thereto can be inspected and copied at the public reference
facilities and regional offices of the Commission referenced above. The
Company intends to publish annual reports with financial information having
been examined and reported upon, with an opinion expressed, by an
independent certified public accountant.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference and made a part of this Prospectus:
(1) The Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995;
(2) The Quarterly Report on Form 10-QSB for the quarter ended June
30, 1996;
(3) The Quarterly Report on Form 10-QSB for the quarter ended March
31, 1996;
(4) The Current Report on Form 8-K/A filed September 17, 1996 and the
Current Reports on Form 8-K dated July 17, 1996, April 20, 1996, April 17,
1996, January 24, 1996, January 11, 1996 and January 5, 1996.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of
this Prospectus and prior to the termination of this offering, shall be
deemed to be incorporated by reference and made a part of this Prospectus.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document that also is
or is deemed to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person to whom a
copy of this Prospectus is delivered (including any beneficial holder),
upon the written or oral request of such person, a copy of any or all of
the documents that have been incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such copies should be
directed to: Robin M. Bradbury, Suite 400, 360 South Garfield Street,
Denver, CO 80209, telephone number (303) 393-1515.
RISK FACTORS
An investment in the Common Stock is highly speculative and should
only be considered by those persons or entities who can afford to lose
their entire investment. In addition to the other information contained in
this Prospectus, the following risk factors should be carefully considered
in evaluating the Company and its business and an investment in shares of
the Company's Common Stock. The order in which the following risk factors
are presented does not indicate the relative magnitude of the risks
described. Certain statements contained in this Prospectus or in documents
incorporated by reference into this Prospectus may constitute forward-
looking statements as defined under the Private Securities Litigation
Reform Act of 1995 in that they relate to events or transactions that have
not occurred, expectations or estimates of the Company, growth strategies
or business plans of the Company or other events or facts that have not yet
occurred. The following risk factors contain discussions of important
factors that should be considered by prospective investors related to
forward-looking statements included in this Prospectus and in the documents
incorporated by reference into this Prospectus. These important factors,
among others, may cause actual results to differ materially from the
results expressed or implied by the forward-looking statements.
Prior Operating Losses of International Nursing; Lack of Working Capital
International Nursing reported net losses of ($335,000) and
($5,487,000) for the years ended December 31, 1995 and 1994, respectively.
At June 30, 1996, International Nursing had an accumulated deficit of
($5,571,000) and a working capital deficit of ($604,000). The Company has
had no quarterly operating profits except for a minimal operating profit in
the first quarter of 1996. There is no assurance that International
Nursing will achieve a specific level of revenues, or that the Company will
operate profitably in the future.
The Company may experience significant fluctuations in future
operating results due to a number of factors including, among others, the
effect of regulatory and legislative developments on the Company, pricing
trends in the flexible staffing industry, availability of qualified medical
personnel, reductions in demand for the Company's interim or home care
staff due to competition, regulation and other factors, the ability of
management to coordinate and implement a marketing strategy, costs
associated with maintenance of quality control standards, and success of
the Company's management in diversifying interim staffing and home care
operations. The impact of any of these factors could cause operating
results to decline significantly from prior periods. Any significant
decrease in revenues for any reason would have an immediate adverse impact
on the Company's operating results and its ability to operate profitably.
No assurances can be given that the Company will be able to obtain
sufficient debt or equity financing, or on acceptable terms, to enable the
Company to meet its cash needs.
Need For Additional Financing
The Company had negative working capital of $(604,000) at June 30,
1996. The current operation of the Company's business and the ability of
the Company to continue to expand may depend upon its ability to obtain
additional financing. The Company is meeting its current cash flow needs
through the sale of equity and the financing of accounts receivable under
terms which have resulted in significant financing costs to the Company.
While the Company has recently renegotiated its accounts receivable
financing agreement to more favorable terms, there can be no assurance that
additional financing will be available to the Company. In the absence of
financing, there can be no assurance that the Company can continue to sell
equity to finance its operations, if necessary.
Government Health Care Reform Proposal; Uncertainty in Health Care Industry
Several programs have been proposed to reform the United States health
care system. Some of these programs contain proposals to increase
government involvement in health care, lower reimbursement rates and
otherwise change the operating environment for the Company's customers.
Health care facilities may react to these proposals and the uncertainty
surrounding such proposals by curtailing the use of flexible staff. The
Company cannot predict with any certainty what impact, if any, proposals
for health care reforms might have on the Company's business. As part of
health care reform, recent federal and certain state legislative proposals
have included provisions extending health insurance benefits to temporary
employees. Due to the wide variety of national and state proposals
relating to health care presently under consideration, the impact of such
proposals cannot be predicted.
The health care industry is subject to changing political, economic
and regulatory influences that may affect the procurement practices and
operations of hospitals and other health care facilities. During the past
several years, the health care industry has been subject to an increase in
government regulation of, among other things, reimbursement rates and
certain capital expenditures. In addition, major third party payors of
hospital services (insurance companies, Medicare and Medicaid) have
significantly revised payment procedures in an effort to contain health
care costs. These and other factors affecting the health care industry may
have a significant adverse impact on the Company's operating results.
Dependence on Customer Relationships; Absence of Customer and Care giver
Contracts
The Company's business is dependent on its ability to establish and
maintain close working relationships with hospitals, clinics, nursing
homes, physician groups, assisted living facilities, health maintenance
organizations, educational institutions, third party payors and other
referral sources, and with care givers providing services on behalf of the
Company. Although the Company has established customer and care giver
relationships in the markets in which it presently operates, there can be
no assurance these relationships will continue. None of the contracts by
and between the Company and its customers is exclusive, and these contracts
do not obligate the customers to utilize a designated number of interim or
home care staff for any specific period of time. Although certain customer
contracts provide that the Company will be the first interim staffing firm
contacted by the hospital, this "first call" right does not guarantee that
the Company will achieve a specific level of, or any, revenues as a result
of such right. Likewise, contracts between the Company and its care givers
are non-exclusive and do not obligate the care giver to render services for
any specific period of time. Accordingly, it is possible that the Company
may not be able to meet customer demand for qualified personnel, or that it
can do so on a cost-efficient basis.
Regulation and Dependence on Certifications
The Company's health care business is subject to extensive and
frequently changing regulation by federal, state and local authorities.
Regulation imposes a significant compliance burden on the Company,
including state licensing and federal and state eligibility standards for
certification as a Medicare and Medicaid provider. In almost half the
states, in addition to licensing, home care providers must receive a
certificate of need ("CON") from the state in order to directly provide
Medicare and Medicaid services. CON requirements and restrictions vary
substantially from state to state. The Company currently subcontracts its
staff to several CON providers doing business in the State of New York,
which is the only CON state in which the Company now conducts business.
The Company considers the CON providers to which it subcontracts as sources
of referrals, although there is no assurance the Company will continue to
receive referrals from CON providers. The Company's inability to obtain or
renew any license, CON or certification could adversely affect the
Company's operations.
The Company's home care business has been certified by the Health Care
Financing Administration ("HCFA") to allow the Company to receive
reimbursement for nursing services and supplies from Medicare. The Company
estimates that approximately ten percent of the Company's 1995 and six
months ended June 30, 1996 revenues were accounted for by home care
services, with the majority of home care reimbursements coming from
Medicare and Medicaid. The Company is subject to continuing financial,
audit and other requirements imposed by HCFA and the State of Colorado in
order to maintain its certification. The Company has been in material
compliance with the financial, audit and other requirements imposed by HCFA
and the State of Colorado in the past, although there is no assurance the
Company will be successful in continuing to meet these requirements. In
the future, the Company may seek to become certified by other states for
the purpose of receiving Medicare or Medicaid reimbursements for home care
or other services. The Company also anticipates seeking accreditation from
the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO")
to evidence the Company's commitment to high service standards. There is
no assurance such certification will be received. In the future, it is
possible that home care providers may be required to obtain JCAHO or other
certifications, the receipt of which by the Company is not assured. The
loss of any of the Company's existing certifications or the loss of or
failure to obtain any certifications required in the future could have a
material adverse effect on the Company's financial position and operations.
Competition
The market for interim staffing and home care services is highly
competitive. Many of the Company's existing and potential competitors have
substantially greater financial, marketing and personnel resources than the
Company and have established reputations in the flexible staffing industry.
Accordingly, the Company is at a disadvantage in competing with such
entities. It is likely that the current trend toward increased
consolidation in the health care industry will accelerate. Some of the
Company's larger competitors may gain an additional advantage by offering
enterprise-wide interim staffing for health care facilities.
In addition, the Company's operations depend, to a significant degree,
on its ability to recruit qualified health care personnel. The Company
faces competition from other companies in recruiting qualified health care
personnel and there is no assurance that qualified personnel will be
available to the Company in the future or the costs at which such personnel
might be available. The failure of the Company to recruit qualified
personnel, or a significant increase in the Company's cost of such
personnel, could have a material adverse effect on the Company's financial
position and operations. There can be no assurance the Company will be
able to continue to compete successfully in the markets in which it is
active or in any markets it enters in the future.
Effect of Reimbursement Policies
Management estimates that approximately 8% of the Company's revenues
are accounted for by reimbursements from federal and state
government-sponsored reimbursement programs and approximately 92% are
accounted for by payments from hospitals, nursing homes and other third
party payors. In recent years, federal and state governments and insurance
companies have sought earlier discharge of patients following the
performance of medical procedures. The trend toward early discharge may
have a negative effect on the demand for certain types of interim staffing
at hospitals. As of December 31, 1995 and June 30, 1996, approximately 90%
of the Company's revenues were accounted for by interim staffing services
and approximately 10% of revenues were accounted for by home care services.
Management anticipates that the Company's services, and the source of its
revenues, will continue to reflect health care industry trends, including
those concerning reimbursement policies. Should the Company be
unsuccessful, for any reason, in adjusting its mix of services in response
to changes in reimbursement policies, the Company's business could be
adversely affected.
Dependence on Key Personnel
The Company's success depends to a significant extent on John P.
Yeros, Chairman of the Board and Chief Executive Officer, of the Company.
The loss of the services of Mr. Yeros could have an adverse effect on the
Company. The Company has entered into an employment agreement with Mr.
Yeros that includes noncompetition covenants. The Company's future success
will depend in part upon its continuing ability to attract and retain
highly qualified personnel to manage the future growth of the Company.
There can be no assurance the Company will be successful in attracting and
retaining such personnel.
Fluctuations in Operating Results and Cash Flow
Results of operations and the Company's cash flow have fluctuated and
may continue to fluctuate significantly from quarter to quarter. Various
factors may affect the results of operations, including hospital budgetary
cycles, increased competition for qualified medical personnel, patient
admission fluctuations and seasonality. Likewise, the Company's cash flow
may fluctuate due to the adoption by hospitals and third party payors of
new or revised reimbursement policies, the cost and availability of
accounts receivable financing, extension of more favorable credit terms to
key customers and various other factors. Should the Company encounter
delays in collecting from third party payors or its customers for any
reasons, the Company's results of operations and cash flow may be
materially adversely affected.
Ability to Manage Growth; Acquisition Strategy
As part of its business strategy, the Company intends to pursue rapid
growth, including possible acquisitions of related and complementary
businesses. The Company's growth strategy will require expanded client
services and support, increased personnel throughout the Company, expanded
operational and financial systems and the implementation of new control
procedures. There can be no assurance the Company will be able to manage
expanded operations effectively. Moreover, failure to implement financial
and other systems and to add resources could have a material adverse impact
on the Company's results of operations and financial condition. The
Company's acquisitions could involve a number of risks, including the
diversion of management's attention to the assimilation of the companies to
be acquired, unforeseen difficulties in the acquired operations, adverse
short-term effects on the Company's operating results, amortization of
acquired intangible assets and dilution in the ownership interest of
shareholders as a result of issuance of additional Common Stock or
preferred stock. The Company's limited working capital may prevent the
Company from concluding other acquisitions for cash and may require the
Company to seek to pay for acquisitions through stock issuances or by
obtaining other financing, of which there is no assurance. There is no
assurance the Company will be successful in consummating any acquisition
transactions or the terms on which such acquisitions might be consummated.
Personnel Risks
Flexible staff providers, such as the Company, are in the business of
employing people and placing them in the workplace of other businesses.
Attendant risks of such activity include possible claims of discrimination
and harassment, employment of illegal aliens, unqualified or unlicensed
medical personnel and other similar claims. The Company has policies,
guidelines and screening procedures in place to reduce its exposure to
these risks. However, a failure to follow these policies and guidelines
may result in negative publicity and the payment by the Company of money
damages or fines. Although the Company historically has not had any
significant problems associated with these risks, there can be no assurance
that the Company will not experience such problems in the future. The
Company may be the subject of litigation for injuries or damages caused by
the acts of its staff. While the Company maintains insurance providing
coverage for certain negligent acts in an amount the Company believes is
customary for the industry, there can be no assurance the Company's
insurance policies will be sufficient so as to offset any claims received.
Moreover, costs of insurance may escalate beyond anticipated levels, or
certain types of losses may be uninsurable or may exceed coverage. Any
substantial uninsured loss suffered by the Company would have a material
adverse effect on the Company.
Control By Existing Shareholders
The Company's executive officers, directors and their affiliates in
the aggregate, beneficially own approximately 139,000 shares, or 3% of the
Company's outstanding shares of Common Stock (21% assuming the exercise of
their currently exercisable options to purchase the Company's Common Stock,
exercise of Warrants by the Selling Shareholders and conversion of the
Preferred Stock). These shareholders, if acting together, may be able to
control most matters requiring approval by the shareholders of the Company,
including the election of a majority of the directors. The voting power of
these shareholders under certain circumstances could have the effect of
delaying or preventing a change in control of the Company, even if such a
change in control would be beneficial to the Company's shareholders.
Future Sales of Common Stock
A substantial number of the Company's outstanding shares of Common
Stock are "restricted securities" and may in the future be sold in
compliance with Rule 144 adopted under the Act. Rule 144 generally
provides that beneficial owners of shares who have held such shares for two
years may sell within a three-month period a number of shares not exceeding
1% of the total outstanding shares or the average trading volume of the
shares during the four calendar weeks preceding such sale. Future sales of
restricted Common Stock under Rule 144 could negatively impact the market
price of the Common Stock. In addition, the Common Stock registered hereby
may be sold from time to time in one or more transactions that may take
place on the Nasdaq SmallCap Market, including block trades, ordinary
broker's transactions, privately negotiated transactions or through sales
to one or more broker/dealers for resale of such securities as principals,
at market prices prevailing at the time of such sale, at prices related to
such prevailing prices or at negotiated prices. Future sales of such
Common Stock could negatively impact the market price of the Common Stock.
See "Plan of Distribution."
Stock Issuable Pursuant to Options, Warrants and Representative's Warrants
At the date hereof, the Company has reserved an aggregate of
approximately 11,045,729 shares of Common Stock for issuance upon the
exercise of outstanding options, Unit Warrants, and Warrants, upon the
conversion of the 1996 Preferred Stock and exercise of securities
underlying Unit Options. The exercise prices of the options and warrants
presently outstanding range from $.63 per share to $6.00 per share. During
the terms of the outstanding options, Warrants, Unit Options, Unit Warrants
and 1996 Preferred Stock, the holders are given the opportunity to profit
from a rise in the market price of the Common Stock, and the exercise of
any options or warrants may dilute the book value per share of the Common
Stock. The existence of the options, conversion rights, or any of the
warrants may adversely affect the terms on which the Company may obtain
additional equity financing. Moreover, the holders of such securities are
likely to exercise their rights to acquire Common Stock at a time when the
Company would otherwise be able to obtain capital on terms more favorable
than could be obtained through the exercise or conversion of such
securities.
Preferred Stock Attributes
Each share of Preferred Stock is convertible at any time, unless
previously redeemed, at the option of the holder into 8,000 shares of
Common Stock (subject to adjustment if the price of the Common Stock falls
below $1.67 per share for five consecutive trading days prior to
conversion). In the event of liquidation, dissolution or winding up of the
Company, outstanding shares of 1996 Preferred Stock will be entitled to
receive $10,000 per share, together with any accrued and unpaid dividends.
Dividends on the 1996 Preferred Stock will accrue at the annual rate of
10%, are cumulative from the date of first issuance, and will be paid
quarterly in arrears commencing 90 days after issuance. Should the Company
liquidate, dissolve or wind up, the liquidation preferences granted to the
holders of the Preferred Stock may operate to the significant disadvantage
of holders of the Common Stock. Moreover, cumulative dividends payable on
the 1996 Preferred Stock may adversely affect the Company's cash flow and
working capital. The redemption of the 1996 Preferred Stock could also
significantly reduce the Company's working capital should the Company elect
to redeem the 1996 Preferred Stock and have the legal and financial ability
to do so.
Volatility of Stock Price; Noncompliance with Nasdaq Listing Requirements
Since commencing trading on the Nasdaq SmallCap Market, the Company's
Common Stock has experienced significant price fluctuations. Factors such
as quarterly fluctuations in results of operations, negative announcements
by the Company or others, regulatory, legislative or other developments
affecting the Company or the health care industry generally, market
conditions specific to the health care industry and general market
conditions may cause the market price of the Common Stock to fluctuate,
perhaps substantially. The conversion of the 1996 Preferred Stock into
Common Stock or exercise of the Warrants may also cause significant price
fluctuations in the Common Stock. In addition, in recent years the stock
market has experienced significant price and volume fluctuations. These
fluctuations, which are often unrelated to the operating performance of
specific companies, have had a substantial effect on the market price for
many health care related companies. Factors such as those cited above, as
well as other factors which may be unrelated to the operating performance
of the Company, may adversely affect the price of the Common Stock.
The regulations of the National Association of Securities Dealers,
Inc. require that stocks listed on the Nasdaq SmallCap Market have (i) a
minimum bid price per share of $1 or (ii) maintain a market value of public
float of $1 million and have $2 million in capital and surplus. The
Company currently meets the listing requirements. However, there can be no
assurance that the Company will continue to meet such requirements or
otherwise continue to be listed on the Nasdaq SmallCap Market. If the
Company's Common Stock is no longer listed on the Nasdaq SmallCap Market,
there can be no assurance that there will be a market for the Company's
Common Stock or other equity securities, or as to the liquidity or
sustainability of any such market.
Description of Common Stock; Absence of Common Stock Dividends
Each share of Common Stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the
election of directors. All shares of Common Stock are equal to each other
with respect to liquidation rights and dividend rights. There are no
preemptive rights to purchase any additional Common Stock. In the event of
liquidation, dissolution or winding up of the Company, holders of the
Common Stock will be entitled to receive on a pro rata basis all assets of
the Company remaining after satisfaction of all liabilities and preferences
of the outstanding 1996 Preferred Stock.
Although the Company is required to pay dividends on the 1996
Preferred Stock, the Company does not anticipate paying any cash dividends
on the Common Stock in the foreseeable future. Any payment of cash
dividends on the Common Stock in the future will be dependent upon the
Company's financial condition, results of operations, current and
anticipated cash requirements, plans for expansion, as well as other
factors that the Board of Directors deems relevant. The Company
anticipates that any future financing agreements will prohibit the payment
of Common Stock dividends without the prior written consent of the
Company's lender(s).
Payments Relating to Stock Price Guarantee
In connection with the Company's acquisition of Ellis Home Health
Services, Inc. ("Ellis") in April 1996, the Company issued 256,250 shares
of Common Stock to the former owner of Ellis. The Company guaranteed that
the seller of Ellis would receive at least $4.00 per share on the sale of
these shares, and if the shares were sold for less than the $4.00 per
share, the Company agreed to either issue additional shares or pay the
shortfall in cash. Through August 31, 1996, the former owner of Ellis had
sold a number of shares of Common Stock below the $4.00 guaranteed price.
This has resulted in the Company owing the former owner of Ellis, pursuant
to the guarantee, approximately $262,000 as of such date, and the Company
has previously paid the former owner of Ellis approximately $60,000. Cash
payments by the Company pursuant to this guarantee will adversely affect
the Company's cash flow and could have a material adverse effect on the
Company's financial position.
THE COMPANY
The Company provides skilled nursing, rehabilitation and other medical
personnel for flexible staffing in home care and in a broad spectrum of
health care and educational facilities. The Company's flexible interim
staffing services are provided through a pool of approximately 1,000 care
givers including licensed and registered nurses, rehabilitation,
respiratory and therapists, medical social workers, home care aides and
other unlicensed personnel. The Company's flexible, interim staff
currently serve over 500 hospitals, clinics, nursing homes, physician
groups, assisted living facilities, health maintenance organizations and
other health care institutions, a variety of educational facilities and
individual home care clients. The Company's skilled nursing and
rehabilitation personnel provide patient care on a daily or per-shift basis
in health care and educational facilities and through long-term travel
nursing arrangements with hospitals and other institutions. The Company's
personnel also provide home care on a shift, daily or long-term basis to
patients restricted to the home. The Company's interim staff currently
serves patients in New York, Texas, Colorado and five other states and the
Company's home care staff serves patients in New York and Colorado.
The Company was incorporated in the State of Colorado in April 1988
and has been engaged in the interim staffing business since its inception.
Its principal executive offices are located at 360 South Garfield Street,
Suite 400, Denver, Colorado, and its telephone number is (303) 393-1515.
BACKGROUND OF THE OFFERING
This offering relates to the registration for resale of up to
8,293,133 Shares which are issuable or may be issuable to certain of the
Selling Shareholders upon (i) conversion of shares of the 1996 Preferred
Stock, (ii) exercise of the Unit Warrants, which were issued as part of
units with the 1996 Preferred Stock, (iii) conversion or exercise,
respectively, of shares of 1996 Preferred Stock or Unit Warrants obtained
upon exercise of Unit Options, and (iv) exercise of the Warrants. In
addition, 220,133 of the Shares are currently held directly by certain of
the Selling Shareholders, which such Shares were issued to such Selling
Shareholders pursuant to exemptions from registration under the Securities
Act of 1933, as amended (the "1933 Act"). The transactions pursuant to
which the Selling Shareholders acquired Shares or the rights to acquire
Shares are summarized below.
In July and September of 1996, the Company issued an aggregate of 244
units ("Units") in offerings (the "Unit Offerings") under an exemption from
registration provided under Regulation D of the 1933 Act. Each Unit,
priced at $10,000, consisted of one share of 1996 Preferred Stock, one Unit
Warrant, and an option to acquire an additional Unit (the "Unit Option").
The Company received net proceeds in the Unit Offerings of $2,322,400 after
deducting commissions of 5% on the first $2,000,000 and 4% on the amount
over $2,000,000, which commissions were paid to David Klugman and
Associates, Inc. ("DKA"), who acted as the agent of the Unit Offerings.
Mr. David Klugman, a Selling Shareholder, is the president of DKA. The
Company used $1,550,000 of the net proceeds from the July Unit Offering to
pay for a portion of the Company's acquisition of STAT Health Care
Services, Inc., and used the remainder for working capital purposes. Each
share of 1996 Preferred Stock is convertible into the number of shares of
Common Stock determined by dividing $10,000, plus any accrued but unpaid
dividends, by the lesser of (i) $1.25 or (ii) 75% of the average closing
sales price during the last five trading days prior to conversion, at any
time until the third anniversary date of the respective Unit issuance.
Each Unit Warrant is initially exercisable to purchase 8,000 shares of
Common Stock at $2.50 per share at any time until the third anniversary
date of the respective Unit issuance. Each Option is exercisable to
purchase an additional Unit for $10,000 until December 31, 1997. If all
of the 1996 Preferred Stock is converted (assuming dividends are paid in
cash), all the Unit Warrants exercised, all the Unit Options exercised (and
all the underlying 1996 Preferred Stock is converted and all the underlying
Unit Warrants are exercised), a total of 7,808,000 shares of Common Stock
will be issued and the Company will receive additional gross proceeds of
$12,200,000. The Company is obligated to pay DKA commissions on the
aggregate proceeds received by the Company in connection with the
Unit Offerings and exercise of securities issued in connection
therewith as follows: 5% on the first $2,000,000, 4% on the second
$2,000,000, 3% on the third $2,000,000, 2% on the fourth $2,000,000, and 1%
on any additional amounts. Through September 17, 1996, the Company had
received an aggregate of $2,440,000 gross proceeds in connection with the
Unit Offerings. The Company will not receive any proceeds from the
conversion of any 1996 Preferred Stock or the sale of Common Stock by the
Selling Shareholders. In connection with the Unit Offering, the Company
agreed to register under the 1933 Act the resale of all shares of Common
Stock underlying the securities related to the Units. Accordingly, the
Company has filed the Registration Statements of which this Prospectus
forms a part.
In connection with the Unit Offering, the Company issued a Warrant to
purchase 100,000 shares of Common Stock at an exercise price of $1.88 per
share, exercisable at any time until July 17, 1999, to Mr. David Klugman
in connection with his assistance in the Unit Offerings. In connection
therewith, the Company agreed to register under the 1933 Act the 100,000
shares of Common Stock underlying this Warrant. The Company will receive
$188,000 in gross proceeds if this Warrant is fully exercised.
In July 1996, the Company completed the acquisition of certain assets
of STAT Health Care Services, Inc. The assets were acquired for $1,550,000
cash received in connection with the July Unit Offering, 200,000 shares of
Common Stock and the issuance of a warrant to purchase 125,000 shares of
Common Stock at an exercise price of $1.88 per share, exercisable at any
time until July 17, 1997. The 200,000 shares of Common Stock and shares of
Common Stock underlying this Warrant are being registered in the
Registration Statement of which this Prospectus forms a part. The Company
will receive $235,000 of gross proceeds if this Warrant is fully exercised;
however, the Company will not receive any proceeds from the sale of the
200,000 shares of Common Stock held by STAT Health Care Service, Inc. or
the sale of shares of Common Stock acquired upon exercise of its Warrant.
In 1995, the Company was named as a defendant in a breach of contract
lawsuit alleging that the Company owed a merger and acquisition fee to
Lumiere Securities, Inc. ("LSI"). In August 1996, the Company negotiated a
settlement to the lawsuit by agreeing to issue an aggregate of $53,000 of
Common Stock to LSI and its attorneys based on the average of the closing
bid prices of the Common Stock for the fourth through seventh trading days
prior to the date the Registration Statement of which this Prospectus forms
a part is filed. Pursuant to this settlement, the Company will issue an
aggregate of 20,133 shares of Common Stock to LSI and its attorneys, all of
which are being registered hereunder. The Company will not receive any
proceeds from the sale of these Shares by LSI and its attorneys.
The Company has issued a Warrant to purchase 20,000 shares of Common
Stock at $2.06 exercisable until August 21, 1999 to a consultant to the
Company and a Warrant to purchase 20,000 shares of the Company's Common
Stock at $2.06 exercisable until August 21, 1999 to another consultant to
the Company. The Shares underlying these Warrants are being registered
pursuant to the Registration Statement of which this Prospectus forms a
part. The Company will receive gross proceeds of $82,400 if these Warrants
are exercised in full, but will not receive any proceeds from the sale of
Shares obtained upon exercise of these Warrants.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of any shares
of Common Stock held by Selling Shareholders. If any of the warrants
described above are exercised (which is solely at the respective holder's
option), the Company will receive the applicable exercise price of the
warrants. The net proceeds to the Company, if any, from the exercise of
such warrants will be used for working capital.
SELLING SHAREHOLDERS
An aggregate of 8,293,133 shares of Common Stock may be offered and
sold pursuant to this Prospectus by the Selling Shareholders. Except as
otherwise indicated in this Prospectus and with the exception of their
ownership of Company securities, the Selling Shareholders have no material
relationship with the Company. See "Background of the Offering." The
following table sets forth certain information regarding the Selling
Shareholders. The "Common Stock beneficially owned" column assumes all
underlying securities described under "Background of the Offering" are
converted into or exercised for Common Stock. The "Common Stock offered"
and "Common Stock owned after sale" columns assume the sale by the Selling
Shareholders of all Common Stock registered hereunder.
Common
Stock Common Common Stock
beneficially Stock beneficially
Selling Shareholder owned(1) offered owned after sale
Number Percentage
STAT Health Care
Services, Inc. 325,000(2) 325,000 - 0 - *
Lumiere Securities, Inc. 12,080(3) 12,080 - 0 - *
Hepenstall, Savage,
Hillyard & Muller, LLC 8,053(3) 8,053 - 0 - *
Jim Gumina 20,000 20,000 - 0 - *
David Watamull 20,000 20,000 - 0 - *
David Klugman 548,000 548,000 - 0 - *
Millenco, LP 640,000 640,000 - 0 - *
Nais Corp. 640,000 640,000 - 0 - *
Newark Sales Corp. 800,000 800,000 - 0 - *
Saleslink Ltd. 192,000 192,000 - 0 - *
Seth Joseph Antine 48,000 48,000 - 0 - *
Chanie Lerner 64,000 64,000 - 0 - *
Clifton Management &
Trading 64,000 64,000 - 0 - *
Fred Rudy 32,000 32,000 - 0 - *
Ezer Mzion Inc. 320,000 320,000 - 0 - *
Cong. Ahavas Tzdokah
Vchesed, Inc. 576,000 576,000 - 0 - *
Rita Folger 128,000 128,000 - 0 - *
Jerome Bloom 32,000 32,000 - 0 - *
Jules Nordlicht 320,000 320,000 - 0 - *
Shekel Hakodesh 160,000 160,000 - 0 - *
Harry Adler 80,000 80,000 - 0 - *
Huberfeld/Bodner Family
Foundation 320,000 320,000 - 0 - *
Helenka Bodner 32,000 32,000 - 0 - *
Isaac & Bina Levy 40,000 40,000 - 0 - *
Philip & Rae Huberfeld 40,000 40,000 - 0 - *
Laura Huberfeld 768,000 768,000 - 0 - *
Naomi Bodner 768,000 768,000 - 0 - *
Keren M. Y & C.B. Elias,
Inc. 80,000 80,000 - 0 - *
Ace Foundation Inc. 80,000 80,000 - 0 - *
Cong. Eitz Chaim 80,000 80,000 - 0 - *
Grupo Mercosur, S.A. 64,000 64,000 - 0 - *
Reuvain Schepansky 32,000 32,000 - 0 - *
Yecheskel Munk 128,000 128,000 - 0 - *
Ohr Somayach Tanenbaum
Educational Center 80,000 80,000 - 0 - *
BHSY Special Projects 80,000 80,000 - 0 - *
Richard Stadtmauer 160,000 160,000 - 0 - *
Samuel Shapiro 16,000 16,000 - 0 - *
Wayne Saker 160,000 160,000 - 0 - *
Rachel Berenbaum 32,000 32,000 - 0 - *
Congregation B'nai Torah 32,000 32,000 - 0 - *
Nathan L. Gold 32,000 32,000 - 0 - *
Moshe Mueller 48,000 48,000 - 0 - *
M&W Medical Supplies 32,000 32,000 - 0 - *
Ohr Somayach International 64,000 64,000 - 0 - *
Mesivta of Long Beach 32,000 32,000 - 0 - *
Avrohom Kalmanowitz 32,000 32,000 - 0 - *
Karen Chaim Shlomo 32,000 32,000 - 0 - *
* Less than 1%.
(1) A total of 8,293,133 shares of Common Stock registered hereby are
held by the Selling Shareholders. A total of 220,133 shares of Common
Stock are held directly. A total of 1,952,000 shares of Common Stock may
be issued upon the conversion of outstanding 1996 Preferred Stock (subject
to adjustment if the price of the Common Stock falls below $1.67 per share
for five consecutive trading days prior to conversion and upon certain
other circumstances). A total of 1,952,000 shares of Common Stock
registered hereby may be issued upon the exercise of the Unit Warrants
included in the Units previously issued by the Company. A total of
3,904,000 shares of Common Stock registered hereby may be issued upon the
exercise of 1996 Preferred Stock and Unit Warrants that may be acquired
pursuant to the Unit Options (244 Unit Options outstanding, each of which
is exercisable for one Unit consisting of one share of 1996 Preferred
Stock and a Unit Warrant). A total of 140,000 shares of Common Stock are
issuable upon exercise of various other Warrants with exercise prices
ranging from $1.88 to $2.06. All of the foregoing underlying securities
are currently exercisable. See "Background of the Offering."
(2) Includes 200,000 shares directly beneficially owned.
(3) All such shares are directly beneficially owned.
DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 15,000,000 shares of
Common Stock, par value $.001 per share, and 2,500,000 shares of Preferred
Stock. As of September 15, 1996, the Company had outstanding 4,612,856
shares of Common Stock and 244 shares of 1996 Preferred Stock. As of such
date, the Common Stock was held of record by approximately 2,000 persons.
Common Stock
Each share of Common Stock is entitled to one vote at all meetings of
shareholders. Shareholders are not permitted to cumulate votes in the
election of directors. All shares of Common Stock are equal to each other
with respect to liquidation rights and dividend rights. There are no
preemptive rights to purchase any additional Common Stock. In the event of
liquidation, dissolution or winding up of the Company, holders of the
Common Stock will be entitled to receive on a pro rata basis all assets of
the Company remaining after satisfaction of all liabilities and preferences
of the outstanding Preferred Stock. The outstanding shares of Common Stock
and the shares of Common Stock issuable upon conversion or exercise of
underlying securities are or will be, as the case may be, duly and validly
issued, fully paid and non-assessable.
Preferred Stock
The Board of Directors of the Company has adopted Articles of
Incorporation creating a class of preferred stock consisting of 2,500,000
shares. Shares of preferred stock may be issued from time to time in one
or more series with such designations, voting powers, if any, preferences
and relative, participating, optional or other special rights, and such
qualifications, limitations and restrictions thereof, as are determined by
resolution of the Board of Directors. In connection with the Unit
Offerings, the Company has designated an aggregate of 488 shares of
Preferred Stock as 1996 Convertible Preferred Stock, $10,000 par value per
share (the "1996 Preferred Stock.").
The following summarizes certain terms and conditions of the 1996
Preferred Stock:
Dividends. Holders of shares of 1996 Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors out of funds at
the time legally available therefor, cash dividends at an annual rate of
10% per annum, payable quarterly, on the last day of each fiscal quarter.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Company, holders of shares of Preferred Stock are
entitled to receive the liquidation preference of $10,000 per share, plus
an amount equal to any accrued and unpaid dividends to the payment date,
and no more, before any payment or distribution is made to the holders of
Common Stock, or any series or class of the Company's stock hereafter
issued that ranks junior as to liquidation rights to the Preferred Stock.
However, the holders of the shares of the Preferred Stock will not be
entitled to receive the liquidation preference of such shares until the
liquidation preference of any other series or class of the Company's stock
hereafter issued that ranks senior as to liquidation rights to the
Preferred Stock (the "Senior Liquidation Stock") has been paid in full.
The holders of Preferred Stock and all series or classes of the Company's
stock hereafter issued that rank on a parity as to liquidation rights with
the Preferred Stock (the "Parity Stock") are entitled to share ratably, in
accordance with the respective preferential amounts payable on such stock,
in any distribution (after payment of the liquidation preference of the
Senior Liquidation Stock, if any) which is not sufficient to pay in full
the aggregate of the amounts payable thereon. After payment in full of the
liquidation preference of the shares of the Preferred Stock, the holder of
such shares will not be entitled to any further participation in any
distribution of assets by the Company. Neither a consolidation, merger or
other business combination of the Company with or into another corporation
or other entity nor a sale or transfer of all or part of the Company's
assets for cash, securities or other property will be considered a
liquidation, dissolution or winding up of the Company.
Voting Rights. The holders of the Preferred Stock will have no voting
rights except as described below or as required by law. In exercising any
such vote, each outstanding share of Preferred Stock will be entitled to
one vote, excluding shares held by the Company or any entity controlled by
the Company, which shares shall have no voting rights.
Redemption. If on July 1, 1998, (a) a registration statement under
the Act registering the Common Stock of the Company into which the 1996
Convertible Preferred Stock is convertible is not effective or (b) the
Common Stock of the Company is not then traded on a national securities
exchange, the Company shall, at the written election of the holder of any
outstanding shares of 1996 Preferred Stock received on or before July 31,
1998, redeem such shares at the redemption price per share of $10,000 plus
any accrued and unpaid dividends thereon, whether or not declared, to June
30, 1998.
Conversion Provisions. Subject to certain anti-dilution adjustments,
the holder of each share of 1996 Preferred Stock may convert such share
into the number of shares of Common Stock determined by dividing $10,000,
plus any accrued but unpaid dividends, by the lesser of (i) $1.25 or (ii)
75% of the average of the closing bid price per share of Common Stock
during the five trading days immediately prior to the date of such
conversion.
Other Provisions. As of September 15, 1996, there were 244 outstanding
shares of 1996 Preferred Stock. The remaining shares are reserved for
issuance pursuant to the Unit Options. The holders of shares of 1996 Stock
have no preemptive rights with respect to any securities of the Company.
Transfer Agent
The Company has retained American Securities Transfer, Inc., 1825
Lawrence Street, Suite 444, Denver, Colorado 80202, as Transfer Agent and
Registrar for the Company's Common Stock.
PLAN OF DISTRIBUTION
This Prospectus may be used from time to time by the Selling
Shareholders to offer and sell an aggregate of 8,293,133 Shares. Shares
may be sold from time to time directly by the Selling Shareholders or by
pledgees, donees, transferees or other successors in interest.
Alternatively, Shares may be offered from time to time by the holders to or
through brokers or dealers who may act solely as agent, or who may acquire
Shares as principal. The distribution of Shares may be effected in one or
more transactions that may take place on the Nasdaq SmallCap Market,
including block trades, ordinary broker's transactions, privately
negotiated transactions or through sales to one or more broker/dealers for
resale of such securities as principals, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. Usual and customary or specifically negotiated
brokerage fees, commissions or discounts may be paid by these holders in
connection with such sales, which such fees, commissions or discounts may
be deemed to be "underwriting compensation" within the meaning of the 1933
Act. In addition, in connection with such sales, the holders and any
participating brokers or dealers may be deemed "underwriters" as such term
is defined in the 1933 Act. The Company has agreed to bear all expenses
other than underwriting discounts and selling commissions, state and local
transfer taxes, and fees and expenses of counsel or other advisors to the
Selling Shareholders, in connection with the preparation and filing of the
Registration Statement of which this Prospectus forms a part and the
printing of this Prospectus and otherwise in connection with the
registration of the Shares. The Registration Statement of which this
Prospectus forms a part must be current at any time during which a Selling
Shareholder sells Shares.
Selling Shareholders may also offer the Shares covered by this
Prospectus under other registration statements or pursuant to exemptions
from the registration requirements of the 1933 Act, including sales which
meet the requirements of Rule 144 under the 1933 Act. Selling Shareholders
should seek advice from their own counsel with respect to the legal
requirements for such sales.
This Prospectus may be supplemented or amended from time to time to
reflect its use relating to the Common Stock for resales by Selling
Shareholders not named in this Prospectus as such who obtain the right to
sell Shares hereunder.
LEGAL MATTERS
The validity of the securities of the Company offered will be passed
on for the Company by LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited
liability partnership, 633 Seventeenth Street, Suite 2800, Denver, Colorado
80202.
EXPERTS
The financial statements of the Company appearing in the Company's
Annual Report (Form 10-KSB) for the year ended December 31, 1995 have been
audited by Ehrhardt, Keefe Steiner & Hoffman, P.C., independent certified
public accountants as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Amount
Payable
by the
Item Company
Registration Fee -
Securities and Exchange Commission . . . . . . $7,821.28
Nasdaq SmallCap filing fee . . . . . . . . . . . $7,500
Legal Fees and Expenses . . . . . . . . . . . . . $5,000*
Accounting Fees and Expenses . . . . . . . . . . $1,500*
Blue Sky Fees (including cost of counsel) . . . . $1,000*
Printing and Engraving . . . . . . . . . . . . . $1,000*
Miscellaneous Expenses . . . . . . . . . . . . . $3,000*
Total . . . . . . . . . . . . . . . . . . . $26,821.28
_____________________
* Indicates estimate for the purpose of this filing.
Item 15. Indemnification of Directors and Officers.
The Colorado Business Corporation Act permits a corporation organized
thereunder to indemnify its directors and officers for certain of their
acts. The Articles of Incorporation of the Company have been framed so as
to conform to the Colorado Business Corporation Act.
In general, any officer, director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising in
connection with a legal proceeding to which such person is a party, if that
person's actions were in good faith, were believed to be in the Company's
best interest and were not unlawful. Unless such person is successful upon
the merits in such an action, indemnification may be awarded only after a
determination by independent decision of the Board of Directors, by legal
counsel or by a vote of the shareholders that the applicable standard of
conduct were met by the person to be indemnified.
The circumstances under which indemnification is granted in connection
with an action brought on behalf of the Company are generally the same as
those set forth above; however, with respect to such actions,
indemnification is granted only with respect to expenses actually incurred
in connection with the defense or settlement of the action. In such
actions, the person to be indemnified must have acted in good faith, in a
manner believed to have been in the Company's best interest and with
respect to which such person was not adjudged liable for negligence or
misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered into in the future pursuant to a vote of
shareholders or directors. The statutory provision cited above and the
referenced portion of the Articles of Incorporation also grant the power to
the Company to purchase and maintain insurance which protects it officers
and directors against any liabilities incurred in connection with their
services in such a position, and such a policy may be obtained by the
Company in the future.
Item 16. Exhibits.
The following is a list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
Exhibit No.
3.1 Certificate of Designation of 1996 Convertible Preferred Stock*
3.2 Certificate of Amendment to Certificate of Designation of 1996
Convertible Preferred Stock*
4.1 Form of Unit Warrant*
5.1 Opinion and Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
regarding legality of the securities registered hereby.*
10.1 Form of Registration Rights/Purchase Agreement relating to Unit
Offering*
23.1 The Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P., (included in
Exhibit 5)*
23.2 Consent of Ehrhardt, Keefe Steiner & Hoffman, P.C., independent
certified public accountants for the Company.
24. Power of Attorney (contained on page II-4 of this Registration
Statement).
__________________________
*To be filed by amendment
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. 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 424(b) of the Act if,
in the aggregate, the change in volume and price represent no more
than a 20% 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.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 14 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, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) That, for the purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) of Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act, and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant 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 by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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 or Amendment to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Denver, State of
Colorado on September 18, 1996.
INTERNATIONAL NURSING SERVICES, INC.
By: /s/ John P. Yeros
John P. Yeros, Chief Executive Officer
Each person whose signature appears below constitutes and appoints
John P. Yeros his attorney-in-fact, with full power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following
persons in the capacities and on the dates indicated below.
Signature Title Date
/s/ John P. Yeros Chairman of the September 18, 1996
John P. Yeros Board and Chief
Executive Officer
(Principal
Executive Officer)
/s/ Robin M. Bradbury Chief Financial September 18, 1996
Robin M. Bradbury Officer (Principal
Financial and
Accounting Officer)
/s/ Colleen Dougherty-Gray Director September 18, 1996
Colleen Dougherty-Gray
/s/ Charles Powell Director September 18, 1996
Charles Powell
/s/ Thomas J. Oberle Director September 18, 1996
Thomas J. Oberle
INDEX TO EXHIBITS
3.1 Certificate of Designation of 1996 Convertible Preferred Stock*
3.2 Certificate of Amendment to Certificate of Designation of 1996
Convertible Preferred Stock*
4.1 Form of Unit Warrant*
5.1 Opinion and Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
regarding legality of the securities registered hereby.*
10.1 Form of Registration Rights/Purchase Agreement relating to
Unit Offering*
23.1 The Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
(included in Exhibit 5)*
23.2 Consent of Ehrhardt, Keefe Steiner & Hoffman, P.C., independent
certified public accountants for the Company.
24. Power of Attorney (contained on page II-4 of this Registration
Statement).
________________________
*To be filed by amendment
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of International Nursing Services, Inc. on Form S-3 of
our report dated March 27, 1996, included in the Annual Report on
Form 10-KSB of International Nursing Services, Inc. for the year
ended December 31, 1995. We also consent to the reference to our
firm under the caption "Experts" in such Registration Statement.
Ehrhardt Keefe Steiner & Hottman PC
September 17, 1996
Denver, Colorado
