As filed with the Securities and Exchange Commission on April 7, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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INTERNATIONAL NURSING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Colorado 7362 84-1123311
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) 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 of (Address and telephone number of
principal executive offices) agent for service)
Copies to:
Thomas J. Moore, Esq.
Steven E. Segal, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
633 Seventeenth Street, Suite 2000
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
<TABLE>
<S> <C> <C> <C> <C>
Amount Proposed Proposed Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to be Registered Registered(1) per Security Offering Price Fee(1)
Common Stock, par value $.001 6,732,311 $0.6875(1) $4,628,464(1) $1,403.00
=================================== ====================== ======================== ========================= ==================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based on the last sale reported of the Company's
common stock, par value $.001 per share, on the Nasdaq SmallCap Market on
April 4, 1997. Pursuant to Rule 416, this Registration Statement also
includes such indeterminate number of additional shares of Common Stock as
may be required for issuance pursuant to anti-dilution provisions of
certain underlying securities as more fully described in the Prospectus
included herein.
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 APRIL 7, 1997, SUBJECT TO COMPLETION
6,732,311 Shares
INTERNATIONAL NURSING SERVICES
Common Stock
This Prospectus relates to an aggregate of 6,732,311 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").
4,547,199 of the Shares are issuable or may be issuable to certain of
the Selling Shareholders upon (i) conversion of shares of the Company's 1997
Convertible Preferred Stock, par value $.001 per share (the "1997 Preferred
Stock"), and (ii) exercise of certain warrants (the "1997 Unit Warrants") to
purchase Shares at an exercise price of $1.00 per Share (subject to adjustment).
2,185,112 of the Shares are issuable or may be issuable upon exercise of a
warrant (the "Millenco Warrant") and a convertible note (the "Millenco Note")
issued by the Company in January 1997. 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 1997 Unit Warrants
and the Millenco Warrant. 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 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 Company
estimates such expenses at $30,000. The Company's Common Stock is traded on the
Nasdaq SmallCap Market (symbol: NURS). On April 4, 1997, the last sale reported
of Common Stock as quoted on the Nasdaq SmallCap Market was $0.6875 per share.
-----------------------------
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 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 __________ __, 1997
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 Commission maintains a Web site that contains reports, proxy and
other information statements regarding registrants that file electronically
(including the Company) with the Commission through the Commission's Electronic
Data Gathering, Analysis and Retrieval System. The Commission's Web site address
is: http://www.sec.gov.
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 29, 1996; and
(2) The Current Report on Form 8-K dated February 14, 1997 and related
Current Report on Form 8-K/A filed April 4, 1997.
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. Such statements can be identified by the use
of forward-looking terminology such as "might," "may," "will," "could,"
"expect," "anticipate," "estimate," "likely," "believe," or "continue" or the
negative thereof or other variations thereon or comparable terminology. 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 ($858,000) and
($5,487,000) for the years ended December 29, 1996 and December 31, 1995,
respectively. At December 29, 1996, International Nursing had an accumulated
deficit of ($7,224,000) and a working capital deficit of ($1,338,000). 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. In addition, the Company's auditor's opinion
contains an explanatory paragraph describing that there is substantial doubt
about the Company's ability to continue as a going concern.
Need For Additional Financing
The Company had negative working capital of $(1,338,000) at December
29, 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 convertible debt and the financing of accounts receivable under
terms which have resulted in significant financing costs to the Company. 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 Denver branch 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 six percent of the Company's 1996 revenues
were accounted for by home care services, where home care reimbursements came
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
has received accreditation from the Joint Commission on Accreditation of
Healthcare Organizations ("JCAHO") to evidence the Company's commitment to high
service standards in the Bronx and Yonkers offices and the Company anticipates
seeking this accreditation for its other branch offices if deemed beneficial.
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 six percent of the Company's
revenues are accounted for by reimbursements from federal and state
government-sponsored reimbursement programs and approximately 94% 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 29, 1996,
approximately 90% of the Company's revenues were accounted for by interim
staffing services and approximately ten percent 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 convertible
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.
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, as recently amended, generally
provides that beneficial owners of shares who have held such shares for one year
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."
Common Stock Issuable Pursuant to Underlying Securities
At the date hereof, the Company has reserved all of its 25,000,000
authorized shares of Common Stock for issuance upon the exercise of outstanding
options, 1997 Unit Warrants, the Millenco Warrant, and upon the conversion of
the 1997 Preferred Stock and the Millenco Note, and upon exercise or conversion
of other of the Company's outstanding securities underlying shares of Common
Stock. The exercise prices of options and warrants to acquire Common Stock
presently outstanding range from $.63 per share to $6.00 per share. During the
respective terms of the outstanding options, Warrants, the Millenco Warrant, the
Millenco Note, 1997 Preferred Stock, 1997 Unit Warrants, 1996 Unit Warrants,
1996 Preferred Stock, 1996 Unit Options and other outstanding underlying
securities, 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 outstanding 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 1997 Preferred Stock is initially convertible at any
time, unless previously redeemed, at the option of the holder into 10,000 shares
of Common Stock, subject to increase if the average closing price of the Common
Stock falls below $1.33 per share for five consecutive trading days prior to
conversion. Based on the average closing price of the Common Stock for the five
consecutive trading days ended March 31, 1997, of $0.775 per share, each share
of 1997 Preferred Stock is currently convertible into 17,204 shares of Common
Stock. In the event of liquidation, dissolution or winding up of the Company,
outstanding shares of 1997 Preferred Stock will be entitled to receive $10,000
per share, together with any accrued and unpaid dividends. Dividends on the 1997
Preferred Stock accrue daily, but only, and to the extent that, a registration
statement under the 1933 Act registering the shares of Common Stock into which
the 1997 Preferred Stock is convertible is not declared effective commencing 90
days after the date of issuance of 1997 Preferred Stock, at the annual rate of
18% per annum. Such dividends, if any, are cumulative, and will be payable
quarterly in arrears commencing 90 days after accrual commences.
Each share of the Company's 1996 Preferred Stock ("1996 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 increase if the average
closing price of the Common Stock falls below $1.67 per share for five
consecutive trading days prior to conversion. Based on the average closing price
of the Common Stock for the five consecutive trading days ended March 31, 1997,
of $0.775 per share, each share of 1996 Preferred Stock is currently convertible
into 17,204 shares of Common Stock. 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 accrue at the annual rate of
10%, are cumulative from the date of first issuance, and are payable 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 Preferred Stock may adversely affect the Company's cash
flow and working capital. The redemption of the Preferred Stock could also
significantly reduce the Company's working capital should the Company elect to
redeem the 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 or 1997 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's Common Stock
has traded below $1 during the six months previous to the date of this
Prospectus. There can be no assurance that the Company's Common Stock will
continue to be listed on the Nasdaq SmallCap Market. If the Company's Common
Stock were no longer listed on the Nasdaq SmallCap Market, there can be no
assurance that there would be a market for the Company's Common Stock, or other
equity securities. 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.
Potential Application of Penny Stock Rules
Should the Company's Common Stock no longer be listed on the Nasdaq
SmallCap Market, trading in such securities may become subject to the penny
stock rules under the Securities Exchange Act of 1934, as amended, unless an
exemption from such rules is available. If such rules become applicable to
trading in the Company's securities, broker-dealers making a market in the
Company's securities will be required to provide disclosure to their customers
regarding the risks associated with the Company's securities, the suitability
for the customer of an investment in the Company's securities, the duties of the
broker-dealer to the customer and information regarding bid and ask prices for
the Company's securities and the amount and description of any compensation the
broker-dealer would receive in connection with a transaction in the Company's
securities. The application of these rules would likely result in fewer market
makers making a market of the Company's securities and further restrict the
liquidity of the Company's Common Stock.
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 Preferred
Stock.
The Company is required to pay dividends on the 1996 Preferred Stock,
and, in certain circumstances, the 1997 Preferred Stock. Under the terms of the
1997 Preferred Stock, the Company is restricted from paying any cash dividends
on the Common Stock as long as any 1997 Preferred Stock is outstanding.
Accordingly, and because of the Company's general policy to retain any earnings
for use in the Company's operation and growth, 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 purchase of Ellis Home Health Services, Inc.
("Ellis") and the issuance of 28,203 shares of common stock to pay off the
remaining amount due under a related note payable, the Company guaranteed that
the former owner of Ellis would realize at least $4.25 per share upon the sale
of the first 12,000 shares each month and $4.00 per share thereafter. The
Company agreed to issue additional shares of Common Stock to make up any
shortfall and the Chairman and Chief Executive Officer of the Company pledged
100,000 of his personal shares of Common Stock as collateral. At December 29,
1996, the former owner of Ellis had a shortfall of approximately $500,000 from
the sales of stock to that date. In January 1997, the former owner of Ellis
exercised his right to take the security pledged by John P. Yeros, the Company's
Chairman and Chief Executive Officer. The Board of Directors of the Company
authorized the Company to issue Mr. Yeros, its Chief Executive Officer 100,000
shares of Common Stock and options to purchase 250,000 shares of Common Stock at
$1.00 per share to compensate Mr. Yeros for the loss of his personal shares. The
$1.00 per share represented the fair market value of the shares at the date of
the grant. In March 1997, the former owner of Ellis presented a letter to the
Company requesting immediate payment of the current remaining amount due of
approximately $400,000. The letter also stated that if the Company is unable to
pay such amount by April 7, 1997, legal action will be pursued with the former
owner seeking recovery of the shortfall, interest, attorney fees, and other
related expenses incurred. The Company has begun negotiations with the former
owner in an attempt to resolve this matter.
THE COMPANY
The Company provides skilled nursing, physical and occupational
therapy, rehabilitation and other medical personnel for flexible staffing and
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 2,200 care givers including licensed and registered nurses,
rehabilitation, and respiratory and therapists, medical social workers, home
care aides and other unlicensed personnel. The Company's flexible, interim staff
currently serve over 900 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, therapy and health aide 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 personnel currently serve patients in New York, Texas, California,
Colorado and thirteen other states.
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 6,732,311
Shares, plus an indeterminate number of additional shares of Common Stock as may
be required pursuant to anti-dilution provisions in the respective underlying
securities, pursuant to Rule 416 under the 1933 Act. The transactions pursuant
to which the Selling Shareholders acquired Shares or the underlying securities
containing rights to acquire Shares are summarized below.
In January and February of 1997, the Company issued an aggregate of
167.15 units (the "1997 Units") in an offering (the "1997 Unit Offering") under
an exemption from registration provided under Regulation D of the 1933 Act. Each
Unit, priced at $10,000, consisted of one share of 1997 Preferred Stock and one
1997 Unit Warrant. The Company received net proceeds in the 1997 Unit Offering
of $1,571,210 after deducting commissions of 6%, which commissions were paid to
the following persons who acted as agents in the 1997 Unit Offering: Mueller
Trading LP of NJ, $63,690; RD White and Company, $15,500; TAJ Global $18,600;
and Greg Kimbel $3,000. The Company applied substantially all of the net
proceeds from the 1997 Unit Offering to the purchase price for the Company's
acquisition of certain assets of Colorado Therapists on Call, Inc. and
Professional HealthCare Providers, Inc., together doing business as TherAmerica,
both wholly-owned subsidiaries of CoreStaff, Inc. Each share of 1997 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)
$1.00 or (ii) 75% of the average closing bid price for the Common Stock on the
last five trading days prior to conversion (currently $0.58125, based on the
average closing price of the Comon Stock for the five consecutive trading days
ended March 31, 1997), at any time until the third anniversary date of issuance.
Each 1997 Unit Warrant is initially exercisable to purchase 10,000 shares of
Common Stock at $1.00 per share (subject to decrease upon the happening of
certain anti-dilution events, none of which have occurred as of the date of this
Prospectus) at any time until the third anniversary date of issuance. If all of
the 1997 Preferred Stock is converted (assuming no dividends are required to be
paid) and all the 1997 Unit Warrants are exercised at the respective current
conversion and exercise prices, a total of 4,547,199 shares of Common Stock will
be issued. In addition, the Company will receive additional gross proceeds of
$1,671,500 from payment of the aggregate exercise price for the 1997 Unit
Warrants. The Company will not receive any proceeds from the conversion of any
1997 Preferred Stock or the sale of Shares received upon conversion of the 1997
Preferred Stock and received upon exercise of the 1997 Unit Warrants by the
Selling Shareholders. In connection with the 1997 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 1997 Units. Accordingly, the Company
has filed the Registration Statement of which this Prospectus forms a part.
This Prospectus also covers 1,985,112 shares of Common Stock that may
be issuable by the Company upon conversion of a convertible note in the
principal amount of $1,000,000 (the "Millenco Note") and 200,000 shares that are
issuable upon exercise of a warrant (the "Millenco Warrant") to purchase 200,000
shares of Common Stock, both of which were issued to Millenco LP in a private
placement on January 28, 1997. The Millenco Note bears interest at 12.5% per
annum. If not prepaid in full by May 28, 1997, principal of and accrued interest
under the Millenco Note is convertible into shares of Common Stock at any time
after May 28, 1997 at the lesser of $1.50 per share or 65% of the average
closing sales price of the Common Stock on the Nasdaq SmallCap Market during the
last five trading days prior to conversion [(subject to further decrease if the
Registration Statement of which this Prospectus forms a part has not been
declared effective by June 27, 1997)]. The Millenco Warrant is exercisable at
any time prior to July 31, 1999 at an exercise price of $1.1875 per share
[(subject to decrease if the Registration Statement of which this Prospectus
forms a part has not been declared effective by June 27, 1997)]. The terms of
the Millenco Note and the Millenco Warrant require the Company to register under
the 1933 Act the shares of Common Stock issuable upon conversion of the Millenco
Note and exercise of the Millenco Warrant, respectively. The Company paid
commissions of $30,000 to Mueller Trading LP of NJ in connection with their
services as finders in connection with the Millenco Note and the Millenco
Warrant.
Holders of any 1997 Unit Warrants exercisable for Common Stock or 1997
Preferred Stock convertible into Common Stock, the Millenco Note or other
securities convertible into or exercisable for Shares must first exercise or
convert such warrants or 1997 Preferred Stock or the Millenco Note,
respectively, in order to acquire such Shares.
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 6,732,311 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 at
current conversion and exercise prices. The "Common Stock offered" and "Common
Stock owned after sale" columns assume the sale by the Selling Shareholders of
all Common Stock registered hereunder.
<TABLE>
<S> <C> <C> <C>
Common Stock
Common Common beneficially
Stock Stock owned after sale
beneficially offered pursuant to this Prospectus(2)
Selling Shareholder owned hereby(1) Number Percentage
Rita Folger 88,818 54,408 34,409 *
Dalton Trading 1,985,914 1,985,914 -0- -0-
Grupo Mercousur, S.A. 68,011 68,011 -0- -0-
Yecheskel Munk 297,333 228,516 68,817 *
Joe Newman 136,022 136,022 -0- -0-
Moshe Mueller 98,817 81,613 17,204 *
Yeshiva Ketana
of Long Island 27,204 27,204 -0- -0-
David Lowy 136,022 136,022 -0- -0-
Laurie Shapiro 136,022 136,022 -0- -0-
Mark G. Katz 34,005 34,005 -0- -0-
Gardenville Corp., N.V. 680,107 680,107 -0- -0-
Richard Martella 27,204 27,204 -0- -0-
David P. Faxon, Jr. 27,204 27,204 -0- -0-
Vladimir V. Peller 27,204 27,204 -0- -0-
Dominick Di Cesare 54,409 54,409 -0- -0-
Efthimia Massouras 27,204 27,204 -0- -0-
Lou Ann Anroniello 27,204 27,204 -0- -0-
Harry Young 27,204 27,204 -0- -0-
Clifford A. Doyle 27,204 27,204 -0- -0-
Tony Difatta 27,204 27,204 -0- -0-
Hoffman/Wetherford 136,022 136,022 -0- -0-
Hoffman/Wetherford 136,022 136,022 -0- -0-
William Jenkins 136,022 136,022 -0- -0-
Mark Chimbel 27,204 27,204 -0- -0-
Dr. Bruni Casatelli 136,022 136,027 -0- -0-
Dr. Edward Wilkens 136,022 136,027 -0- -0-
Millenco LP 2,185,112 2,185,112 -0- -0-
* Less than 1%.
</TABLE>
(1) A total of 2,875,699 of such Shares may be issued upon conversion
of 1997 Preferred Stock and 1,671,500 of such Shares may be issued upon exercise
of 1997 Warrants. A total of 1,985,112 of such Shares are obtainable upon
conversion of the Millenco Note and 200,000 Shares are obtainable upon exercise
of the Millenco Warrant. See "Background of the Offering."
(2) The resale of the Shares of Common Stock beneficially owned by
Selling Shareholders not being offered pursuant to this Prospectus has been
registered under the 1933 Act pursuant to Registration Statement No. 333- 12241
declared effective by the Securities and Exchange Commission on October 10,
1996.
(3) Includes 1,985,112 Shares obtainable upon conversion of the
Millenco Note and 200,000 Shares obtainable upon exercise of the Millenco
Warrant.
DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 25,000,000 shares of
Common Stock, par value $.001 per share, and 2,500,000 shares of Preferred
Stock. As of March 23, 1997, the Company had outstanding 7,382,548 shares of
Common Stock, 52 shares of 1996 Preferred Stock and 167.15 shares of 1997
Preferred Stock. As of such date, the Common Stock was held of record by
approximately 200 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.
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 6,732,311 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 Company estimates such
expenses at $30,000. 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 2000, 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 29, 1996 have been
audited by Ehrhardt Keefe Steiner & Hottman, 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.... $ 926
Nasdaq SmallCap filing fee .............................. $ 7,500
Legal Fees and Expenses.................................. $10,000*
Accounting Fees and Expenses............................. $ 1,500*
Blue Sky Fees (including cost of counsel)................ $ 5,000*
Printing and Engraving................................... $ 1,000*
Miscellaneous Expenses................................... $ 1,000*
Total............................................ $26,926
=======
- ---------------------
* 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.
See Index to Exhibits incorporated herein by this reference.
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 April 7, 1997.
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.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ John P. Yeros Chairman of the Board and Chief April 7, 1997
- --------------------------- Executive Officer
John P. Yeros (Principal Executive Officer)
/s/ Robin M. Bradbury Chief Financial Officer April 7, 1997
- --------------------------- (Principal Financial and Accounting
Robin M. Bradbury Officer)
/s/ Charles Powell Director April 7, 1997
- ---------------------------
Charles Powell
/s/ Thomas J. Oberle Director April 7, 1997
- ---------------------------
Thomas J. Oberle
</TABLE>
INDEX TO EXHIBITS
3.1 Certificate of Designation of 1997 Convertible Preferred Stock
Incorporated by reference to Exhibit 3.18 to the Company Annual Report
on Form 10-KSB for its 1996 fiscal year ended December 29, 1996
(Commission File No. 0-24768).
4.2 Form of 1997 Unit Warrant Incorporated by reference to Exhibit 4.11 to
the Company Annual Report on Form 10-KSB for its 1996 fiscal year ended
December 29, 1996 (Commission File 0-24768).
4.3 Millenco Warrant Incorporated by reference to Exhibit 4.9 to the
Company Annual Report on Form 10-KSB for its 1996 fiscal year ended
December 29, 1996 (Commission File 0-24768).
4.4 Millenco Note Incorporated by reference to Exhibit 4.10 to the Company
Annual Report on Form 10-KSB for its 1996 fiscal year ended December
29, 1996 (Commission File 0-24768).
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 1997 Unit
Offering Incorporated by reference to Exhibit 10.21 to the Company
Annual Report on Form 10-KSB for its 1996 fiscal year ended December
29, 1996 (Commission File 0-24768).
23.1 Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included
in Exhibit 5.1).
23.2 Consent of Ehrhardt Keefe Steiner & Hottman, P.C., independent
certified public accountants for the Company.
24. Power of Attorney (included on Signature Page).
- ------------------------
EXHIBIT 5.1
LEBOEUF, LAMB, GREENE & MACRAE
L.L.P.
633 17th Street, Suite 2000
Denver, Colorado 80203
(303) 291-2600
April 7, 1997
Securities and Exchange Commission
Division of Corporation Finance
Judicial Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: International Nursing Services, Inc.
Form S-3 Registration Statement
Relating to the Resale of 6,732,311 Shares of Common Stock
Ladies and Gentlemen:
As counsel for International Nursing Services, Inc. in connection with its
proposed registration on Form S-3 of 6,732,311 shares of its Common Stock, $.001
par value per share, it is our opinion that the securities being registered are,
or will be when issued in accordance with the terms of the respective underlying
securities against payment of any applicable consideration, legally issued,
fully paid, and non-assessable. As counsel to the Registrant, we hereby consent
to the use of our opinion and to all references to our firm included in or made
a part of the referenced Registration Statement and any amendments thereto.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
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 21,
1997, included in the Annual Report on Form 10-KSB of International Nursing
Services, Inc. for the year ended December 29, 1996. We also consent to the
reference to our firm under the caption "Experts" in such Registration
Statement.
Ehrhardt Keefe Steiner & Hottman PC
April 3, 1997
Denver, Colorado
