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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1996
REGISTRATION NO. 333-12955
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CORAM HEALTHCARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
1125 SEVENTEENTH STREET, SUITE 2100
DENVER, COLORADO 80202
(303) 292-4973
(ADDRESS, INCLUDING ZIP CODE, TELEPHONE NUMBER AND
AREA CODE OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STATE OF DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
33-0615337
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
8082
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
DONALD J. AMARAL
CHIEF EXECUTIVE OFFICER
CORAM HEALTHCARE CORPORATION
1125 SEVENTEENTH STREET, SUITE 2100
DENVER, COLORADO 80202
(303) 292-4973
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
DAVID L. GERSH, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
555 SOUTH FLOWER STREET, SUITE 2300
LOS ANGELES, CALIFORNIA 90071-2371
Approximate date of commencement of proposed sale of the securities
to the public: from time to time after the effective date of this
Registration Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. [X]
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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 to be made pursuant to Rule 434,
please check the following box. [ ]
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PROSPECTUS
CORAM HEALTHCARE CORPORATION
184,444 SHARES OF COMMON STOCK,
PAR VALUE $.001 PER SHARE
Pursuant to this Prospectus, certain persons (collectively the
"Selling Stockholders") who hold 184,444 shares of Common Stock, $.001 par
value per share (the "Common Stock"), of Coram Healthcare Corporation
(together with its subsidiaries, the "Company") may resell or further
distribute such securities on a deferred basis. The shares of Common Stock
owned by the Selling Stockholders and offered hereby are collectively
referred to herein as the "Offered Securities." The Selling Stockholders
may sell the Offered Securities from time to time in transactions on the
New York Stock Exchange (the "NYSE") and, in certain cases, in privately
negotiated transactions, through the writing of options on the Common
Stock, or by a combination of those methods, at fixed prices that may be
changed, at market prices at the time of sale, at prices related to market
prices or at negotiated prices. The Selling Stockholders may effect those
transactions by selling the Offered Securities to or through
broker-dealers, who may receive compensation in the form of discounts or
commissions from the Selling Stockholders or from the purchasers of the
Offered Securities for whom the broker-dealers may act as agent or to whom
they may sell as principal, or both. See "Selling Stockholders" and "Plan
of Distribution."
The Company will not receive any proceeds from the sale of the
Offered Securities. See "Use of Proceeds" and "Plan of Distribution."
The Company's Common Stock is presently traded on the NYSE under
the symbol "CRH." On November 8, 1996 the closing price of the Common Stock
was $4.75.
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IF THE COMPANY CHOOSES NOT TO MAINTAIN THE EFFECTIVENESS OF THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS CONSTITUTES A PART, THE
SECURITIES OFFERED HEREBY MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED, EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT THEREUNDER.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS AT ANY
TIME NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE HEREOF.
THE DATE OF THIS PROSPECTUS IS NOVEMBER 8, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information 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, D.C. 20549, as
well as at the following regional offices: Seven World Trade Center, Room
1300, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Room 1500, Chicago, Illinois 60661-2511. Copies of such
material can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
The Company has filed with the Commission a registration statement
on Form S-3 (herein, together with all amendments thereto, called the
"Registration Statement") of which this Prospectus constitutes a part,
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and in the
exhibits thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission, and reference is made to the
Registration Statement and the exhibits thereto for further information
regarding the Company and the securities offered hereby. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable documents filed with
the Commission. The Registration Statement and the exhibits thereto may be
inspected without charge and copies thereof may be obtained upon payment of
the prescribed fees at the public reference facilities of the Commission at
its principal office in Washington, D.C.
The Company's Common Stock is listed on the NYSE. All reports,
proxy statements and other information filed by the Company with the NYSE
may be inspected at the offices of the NYSE at 20 Broad Street, New York,
New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company
are incorporated by reference into this Registration Statement:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1995, as amended by Form 10-K/A No. 1 filed on June 6, 1996 and Form
10-K/A No. 2 filed on June 28, 1996.
2. Quarterly Report on Form 10-Q for the period ended March 31,
1996, as amended by Form 10-Q/A No. 1 filed on June 6, 1996.
3. Quarterly Report on Form 10-Q for the period ended June 30,
1996, as amended by Form 10-Q/A No. 1 filed on August 21, 1996.
4. Quarterly Report on Form 10-Q for the period ended September 30,
1996.
5. Current Report on Form 8-K dated June 30, 1996.
6. Current Report on Form 8-K dated October 19, 1996.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities hereby then remaining unsold, shall be deemed to
be incorporated by reference to this Prospectus and to be a part hereof
from the date of filing of such documents. 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 which 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.
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Copies of all documents which are incorporated herein by reference
(excluding exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents) will be provided
without charge by the Company to each person to whom this Prospectus is
delivered, upon the written request of such person directed to Coram
Healthcare Corporation, Attention: Corporate Communications, 1125
Seventeenth Street, Suite 2100, Denver, Colorado 80202, telephone (303)
292-4973.
THE COMPANY
Coram Healthcare Corporation, a Delaware corporation ("Coram" or
the "Company"), is a leading provider of alternate site (outside the
hospital) infusion therapy and related services in the United States.
Infusion therapy involves the intravenous administration of anti-infective,
biotherapy, chemotherapy, pain management, nutrition, and other therapies.
Other services offered by the Company include lithotripsy, mail-order
pharmacy and pharmacy benefit management and other non-intravenous products
and services.
The Company was formed on July 8, 1994 as a result of a merger (the
"Four-Way Merger") of T2 Medical, Inc., a wholly-owned subsidiary of the
Company ("T2"), Curaflex Health Services, Inc., a wholly-owned subsidiary
of the Company ("Curaflex"), Medisys, Inc., a wholly-owned subsidiary of
the Company ("Medisys") and HealthInfusion, Inc., a wholly-owned subsidiary
of the Company ("HealthInfusion"), each of which was a publicly-held
national or regional provider of home infusion therapy and related
services. The Four-Way Merger enabled the Company to become a national
provider of home infusion and other alternate site health care services. On
September 12, 1994, the Company further broadened its geographic coverage
by acquiring H.M.S.S., Inc. ("HMSS"), a leading regional provider of home
infusion therapies based in Houston, Texas. Effective April 1, 1995, the
Company acquired substantially all the assets used in the alternate site
infusion business of Caremark International Inc. (the "Caremark Business"
and such acquisition, including certain financings related thereto, the
"Caremark Transaction"), thereby becoming the largest provider of alternate
site infusion therapy service in the United States based on breadth of
service and total revenue.
On October 19, 1996, the Company, Integrated Health Services, Inc.
("IHS") and IHS Acquisition XIX, Inc., a wholly-owned subsidiary of IHS
("Merger Sub"), entered into a definitive Agreement and Plan of Merger (the
"Merger Agreement") providing for the merger (the "IHS Merger") of Merger
Sub with and into the Company. If the Merger is consummated, the Company
will become a wholly-owned subsidiary of IHS.
The Company's principal executive offices are located at 1125
Seventeenth Street, Suite 2100, Denver, Colorado 80202, and its telephone
number is (303) 292-4973.
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RISK FACTORS
In addition to the other information contained in this Prospectus
and the information incorporated herein by reference, prospective investors
should carefully consider, among others, the following risk factors prior
to investing. In addition, the information incorporated herein by reference
and the other information set forth herein contains forward-looking
statements within the meaning of the Securities Act and the Exchange Act.
The Company's actual results could differ materially from those projected
in any forward-looking statements as a result of the factors described
below and elsewhere in the information incorporated herein by reference.
RECENT OPERATING LOSSES; FUTURE OPERATING RESULTS UNCERTAIN
The Company recorded operating losses of $283.9 million and $5.1
million and net losses of $334.1 million and $53.4 million for the year
ended December 31, 1995 and the nine months ended September 30, 1996,
respectively, and it has experienced consecutive quarterly losses in each
quarter since the quarter ended March 31, 1995. The Company has only been
operating as a combined entity since July 8, 1994, and has incurred
cumulative net losses of approximately $509.7 million (including $414.1
million of non-recurring and special charges) from such date through
September 30, 1996. Numerous factors have affected the Company's
performance and financial condition, including, among others, (i) the
underperformance of the Caremark Business from what the Company expected at
the time such business was acquired, combined with the substantial
indebtedness that the Company incurred to acquire the Caremark Business,
which it expected to service in substantial part through the operating
income and cash flow of the Caremark Business; (ii) the implementation of a
policy of terminating physician arrangements and certain businesses during
fiscal 1995 which it inherited from its predecessors which were potentially
in conflict with new federal and state law, resulting in the loss of a
number of historic referral sources; (iii) pricing pressure in the
Company's core infusion business as a result of a continuing shift in payor
mix from traditional indemnity insurers to managed care and government
payors and intense competition among infusion providers; (iv) a disruption
in certain relationships as a result of the Company's headcount reductions
and consolidation; and (v) increased competition from hospitals and
physicians offering services similar to those offered by the Company. There
can be no assurance that these factors will not continue to have an adverse
effect on the Company's business, financial condition and results of
operations in the future. In addition, there can be no assurance that the
Company can increase revenue or become profitable or achieve positive cash
flow from operations in future periods. The future operating results of the
Company will depend on many factors, including stabilization of operating
revenue and pricing pressures, the ability of the Company to implement its
strategy, the level of competition in the home health care industry, the
ability to integrate the Company's purchased businesses into its current
organization, general economic conditions, the ability to attract and
retain qualified personnel at competitive rates and government regulation
and reimbursement policies.
A central component of the Company's business strategy is to focus
on revenue generation. The Company intends to increase revenue in part by
redirecting its marketing efforts towards improving its physician
relationships. The Company has experienced and expects to continue to
experience difficulties with its strategy of improving revenue as a result
of several factors. These factors include a negative perception of the
Caremark Business among certain physicians as a result of the guilty plea
of Caremark Inc. and Caremark International, Inc. (collectively
"Caremark") to federal charges. The Company believes the guilty plea by
Caremark to criminal felony charges in September 1995 has negatively
impacted revenue referral sources and employee morale throughout the
Company. In addition, Caremark recently announced a substantial settlement
with private payors with whom Caremark did business before selling the
Caremark Business to the Company. The Company believes the guilty plea and
the causes underlying the settlement with private payors have had an
adverse effect on the Company's revenue because of a reluctance of referral
sources to continue to refer patients to the business formerly owned by
Caremark. The Company is unable to quantify such effect at this time. There
can be no assurance that these factors will not continue to have an adverse
effect on the Company's business, financial condition and results of
operations in the future.
In addition, there continues to be concern among payors and
providers as to whether the Company will continue as a going concern. The
Company has experienced inquiries on this matter directly from payors and
providers, and believes that these concerns have negatively impacted
referrals and the ability to secure contracts. The Company believes that
the concerns stem from adverse operating results during 1995, public
disclosures related thereto and questions raised by competitors and the
news media. There can be no assurance that the Company will be successful
in mitigating these concerns or that they will not continue to have an
adverse effect on the Company's business, financial condition and results
of operations in the future.
Implementation of the Company's business strategy could also be
affected by a number of factors beyond the Company's control, such as loss
of personnel, the response of competitors and regulatory developments.
Pronounced changes are expected to occur in the markets which the Company
serves, which may require adjustments to the Company's strategy. Execution
of this strategy has placed and will continue to place significant demands
on the Company's financial and management resources, and there can be no
assurance that the
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Company will be successful in implementing its strategy, or in responding
to ongoing changes in its markets which may require adjustments to its
strategy. If the Company fails to implement its strategy successfully or
does not respond adequately to ongoing changes in its markets for the
Company's products and services, the Company's business, financial
condition and results of operations will be materially adversely affected.
SUBSTANTIAL LEVERAGE
The Company incurred a significant amount of long-term debt in
connection with the Caremark Transaction. As of September 30, 1996, the
Company's consolidated indebtedness was $483.1 million of which $219.0 is
currently payable and its consolidated stockholders' deficit was $7.4
million. The degree to which the Company is leveraged could impair the
Company's ability to finance, through its own cash flow or from additional
financing, its future operations or pursue its business strategy, thereby
making the Company more vulnerable to economic downturns, competitive and
payor pricing pressures and adverse changes in government regulation. At
September 30, 1996, $366.0 million of the Company's borrowings were under
arrangements with variable interest rates. As of September 30, 1996, there
was $183.7 million outstanding under the Senior Credit Facility, all of
which is payable currently. Payment of interest of $32.3 million on a $150
million subordinated rollover note (the "Rollover Note") is deferred to
March 31, 1997. Any significant increase in the interest rates on those
borrowings would have a material adverse effect on the Company's business,
financial condition and result of operation. See "-- Liquidity; Need for
Additional Financing."
LIQUIDITY; NEED FOR ADDITIONAL FINANCING
On October 13, 1995, the Company and its lenders under the Senior
Credit Facility and a bridge note (the "Bridge Note") agreed to a
restructuring of the major terms of both agreements. The amendments to the
Senior Credit Facility postponed the first principal payment due thereunder
from September 30, 1995 to March 31, 1996, provided a new $25 million
credit line and redefined covenants to be consistent with the Company's new
business strategy. The principal covenants relate to maintenance of minimum
revenues, minimum cash receipts, maximum cash disbursements and minimum
earnings before interest, taxes, depreciation and amortization. In
addition, the covenants, among other things, restrict the ability of the
Company and its subsidiaries to dispose of assets, incur debt, pay
dividends, create liens, make capital expenditures and make certain
investments or acquisitions and otherwise restrict corporate activities and
require that any excess cash balances, as defined, be applied to prepayment
of the debt. Proceeds from the sale of the Company's non-core businesses
must be applied directly to reducing principal indebtedness under the
Senior Credit Facility. The ability of the Company to comply with such
provisions may be affected by events beyond its control. The breach of any
of these covenants could result in a default under the terms of such
indebtedness.
The Bridge Note was issued on April 6, 1995 to an affiliate of
Donaldson, Lufkin & Jenrette as an unsecured obligation of the Company in a
principal amount of $150 million. The Bridge Note was not repaid in full on
its April 6, 1996 due date, and the Rollover Note, which matures on October
6, 2000, was issued for the outstanding principal on the Bridge Note.
If the Company were to default under any of its indebtedness
agreements and did not cure such default prior to the lenders acting
thereon, the lenders to the Company could, at their option, declare all
borrowings immediately due and payable. Moreover, there can be no assurance
that the Company's cash flow from operations and current borrowings will be
sufficient to meet its short or long-term needs, and additional sources of
funds may be required in future periods. The new credit line expires and
matures on December 31, 1996 and the Senior Credit Facility matures on
March 31, 1997. There can be no assurance that the Company's cash flow from
operations will be sufficient to satisfy its obligations upon the maturity
of the new line of credit, the Senior Credit Facility or the Rollover Note.
Although the Company has entered into the Merger Agreement providing for
the IHS Merger, there is no assurance the IHS Merger will be consummated.
If the IHS Merger is not consummated, in order to satisfy its debt
obligations, the Company may engage in a public or private offering of
securities or a sale or other merger of the Company. Any such transaction
could result in a substantial dilution in the ownership interest of the
existing stockholders and may have an adverse impact on the market price of
the Company's Common Stock. There can be no assurance that the Company will
undertake such a transaction, the timing thereof or that the Company will
be able to obtain any additional funds or complete such a transaction on
terms acceptable to the Company.
DEPENDENCE ON KEY PERSONNEL; CHANGES IN MANAGEMENT
The Company is substantially dependent upon the services of its
executive officers, which include Donald J. Amaral, Chief Executive
Officer and President, and Richard M. Smith, Chief Financial Officer, and
the loss of services of either of these executives
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could have a material adverse effect on the Company. Effective October 16,
1995, Mr. Amaral was named President and Chief Executive Officer of the
Company, succeeding James M. Sweeney, who remains the Company's Chairman.
Mr. Smith was named Chief Financial Officer on August 30, 1995. The Company
has experienced substantial turnover in its senior management group since
the beginning of fiscal 1995, and several of the Company's executive
officers have been in their current positions for only a limited period of
time. The Company's future growth and success depends, in large part, upon
its ability to obtain, retain and expand its staff of professional
personnel. There can be no assurance that the Company will be successful in
its efforts to attract and retain such personnel.
CERTAIN LITIGATION
The Company is a party to several lawsuits that could, if their
outcomes were unfavorable, have a material adverse effect on the Company's
business, financial condition and results of operations. These lawsuits
include (i) approximately 20 civil suits (which were consolidated into one
suit) (the "Consolidated Action") filed by individuals claiming to have
purchased and sold Common Stock during a specified period in 1995,
asserting claims under Section 10(b) and 20(a) of the Exchange Act and Rule
10b-5 of the Commission; (ii) two shareholders' derivative action's
asserting substantially similar factual allegations; (iii) a lawsuit filed
by the Company against Caremark and a lawsuit and a cross-complaint filed
by Caremark against the Company, relating to the acquisition of the
Caremark Business; and (iv) actions by plaintiffs in the shareholder
litigation which was initiated against T2 in 1992, related to the T2
Settlement Agreement. The Company intends to vigorously defend itself in
these matters. Nevertheless, due to the uncertainties inherent in the early
stages of litigation, the ultimate disposition of the litigation cannot be
presently determined. In addition, even if the ultimate outcome of the
claims pending against the Company and the Company's claims against
Caremark are resolved in favor of the Company, such litigation could entail
considerable cost and the diversion of efforts of management, either of
which could have a material adverse effect upon the Company's business,
financial condition and results of operations.
On August 8, 1996 the Company announced an agreement in principle to
settle the Consolidated Action and certain derivative litigation. The
agreement in principle, which is subject to approval by the U.S. District
Court for the District of Colorado (the "District Court"), provides that, as
consideration for the settlement, the Company will pay approximately $1.3
million, of which $1.0 million will be reimbursed under the Company's
Director's and Officer's insurance policies, and the Company's Director's
and Officer's insurance policies will pay $22.3 million, including the $1.0
million payment to the Company referenced above. Additionally, the Company
will adopt certain disclosure policies with regard to certain public
statements. The Company will also issue 5 million freely tradable shares of
Common Stock. The agreement in principle contains several contingencies,
including the following: (1) the insurance carriers and the Company must
deposit all cash into an interest-bearing escrow account no later than
August 31, 1996 (such deposits were made prior to such date); (2) the
average value of Coram's stock must remain above $2.50 during the twenty
days immediately preceding final approval of the settlement; (3) the Company
may cancel the settlement if ten percent or more of the class members opt
out of the settlement; (4) the Company must not voluntarily commence, or be
involuntarily put into, any bankruptcy proceeding prior to the final
approval of the settlement or at any time prior to the effective date of the
settlement; (5) the Company must not be more than thirty days delinquent in
paying interest or principal on its Senior Credit Facility; and (6) the
Coram special litigation committee must determine that the settlement is
adequate. The Company recorded a non-cash charge of $12.5 million and a cash
charge of $0.3 million during the quarters ended June 30, 1996 and September
30, 1996, respectively in connection with the expected future issuance of
shares. The $12.5 million, which was recorded in operations as a provision
for a shareholder litigation settlement and in shareholder's equity as
common stock to be issued, represents the 5 million shares at the minimum
value under the agreement of $2.50 per share. The actual value of the shares
will be determined once the settlement receives final court approval and the
shares are actually issued. The value of the shares at issuance may be
higher than the $12.5 million and therefore may result in an additional
charge to earnings in a future period. Any additional charge may be
material. There is no assurance that the District Court will approve such
settlement. In the event such settlement is not so approved, such litigation
could continue to entail considerable cost and the diversion of efforts of
management.
DEPENDENCE ON RELATIONSHIPS WITH THIRD PARTIES
The profitability of the Company's business depends in part on its
ability to establish and maintain close working relationships with managed
care organizations, private and governmental third-party payors, hospitals,
physicians, physician groups, home health agencies, long-term care
facilities and other institutional health providers and insurance companies
and large self-insured employers. A central feature of the Company's
business strategy is to improve its relationships with such third parties
in general, and with physicians in particular. There can be no assurance
that the Company will be successful in improving and maintaining such
relationships, or that the Company will be able to develop and maintain
additional relationships in existing health care markets or health care
markets that develop in the future. The failure of the Company to maintain
and improve its existing relationships or to continue to develop additional
relationships could have a material adverse effect on the Company's
business, its financial condition and its results of operations.
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GOVERNMENTAL REGULATION
The Company is subject to extensive federal and state laws
regulating, among other things, the provision of pharmacy, home care
nursing services, health planning, health and safety, environmental
compliance and toxic waste disposal. The Company is also subject to fraud
and abuse and self referral laws and "anti-kickback" statutes which affect
the Company's business relationships with physicians, other health care
providers, referral sources and its reimbursement from governmental payors.
The Company may be required to obtain certification to participate in
governmental payment programs, such as Medicare and Medicaid. Some states
have established certificate of need programs regulating the establishment
or expansion of health care facilities, including certain of the Company's
facilities.
Violations of the federal anti-kickback statute are punishable by
criminal or civil penalties, including imprisonment, fines and exclusion of
the provider from future participation in the Medicare and Medicaid
programs. Civil suspension for anti-kickback violations can also be
imposed through an administrative process, without the imposition of civil
monetary penalties. The failure to obtain, renew or maintain any of the
required regulatory approvals or licenses could adversely affect the
Company's business and could prevent the location involved from offering
products and services to patients. The Company's business, financial
condition and results of operations could be materially adversely affected
as a result of any such change or sanction. The health care services
industry will continue to be subject to intense regulation at the federal
and state levels, the scope and effect of which cannot be predicted. No
assurance can be given that the activities of the Company will not be
reviewed and challenged or that government sponsored health care reform, if
enacted, will not have a material adverse effect on the Company.
In September 1994, T2 entered into a settlement agreement with the
Office of the Inspector General (the "OIG") of the Department of Health and
Human Services (the T2 OIG Settlement Agreement") settling charges brought
on by an investigation by the OIG into certain operations of T2. T2, in
expressly denying liability, agreed to a civil order which enjoins it from
violating federal anti-kickback and false claims laws related to
Medicare/Medicaid reimbursement. The T2 OIG Settlement Agreement imposes
certain restrictions upon the types of relationships that T2 may have with
referring physicians and imposes a five year reporting obligation upon T2.
The Company has implemented an internal review program to ensure compliance
with the T2 OIG Settlement Agreement. The internal regulatory compliance
review program is intended to deal with compliance issues under the T2 OIG
Settlement Agreement and with other legal, regulatory and ethical
compliance issues. However, no assurance can be made that in the future the
Company's business arrangements, past or present, will not be the subject
of an investigation or prosecution by a federal or state governmental
authority. Such investigation could result in any, or any combination, of
the penalties discussed above depending upon the agency involved in such
investigation and prosecution, which could have a material adverse effect
on the Company's business, financial condition and results of operations.
DEPENDENCE ON PAYORS AND REIMBURSEMENT RELATED RISKS
The profitability of the Company depends in large part on
reimbursement provided by third party payors. Since alternate site care is
generally less costly to third party payors than hospital-based care,
alternative site providers have historically benefited from cost
containment initiatives aimed at reducing the costs of hospitalization.
However, competition for patients, efforts by traditional third party
payors to contain or reduce health care costs and the increasing influence
of managed care payors such as health maintenance organizations in recent
years have resulted in reduced rates of reimbursement for services provided
by alternative site providers. Since 1993, the alternative site infusion
industry, including the Company, experienced severe reductions in the
pricing of its products and services as a result of these trends.
The ability of the Company to collect from third party payors
depends on the timely and accurate filing of claims. In 1995, the Company
experienced significant delays in billing as well as difficulties in
receiving timely reimbursements. The delays were caused in part by the
inability to efficiently complete, obtain or process certain claim
documentation and in part by lack of familiarity with the billing systems
of its predecessor entities and the Caremark Business. The passage of time
makes incomplete documentation required for billing and payment difficult
or impossible to obtain or replace, and can delay claim submission past
deadlines imposed by certain payors. Any further disruptions in those
procedures could adversely affect the ability of the Company to collect its
accounts receivable, and that would have an adverse effect on the Company's
business, financial condition and results of operations.
Managed care payors and even traditional indemnity insurers
increasingly are demanding fee structures and other arrangements providing
for the assumption by health care providers of all or a portion of the
financial risk of providing care (e.g., capitation). Capitation
7
<PAGE> 10
arrangements currently do not comprise a material component of the
Company's revenues. While the Company believes that short-term pricing
pressures are stabilizing, no assurance can be given that pricing pressures
will not continue or that the Company's business, financial condition and
results of operations will not be adversely affected by such trends. A
rapid increase in the percentage of revenue derived from managed care
payors without a corresponding decrease in the Company's operating costs
could have an adverse impact on the Company's gross margins.
In addition to infusion therapy and related services, the Company
also provides lithotripsy services. Lithotripsy is a non-invasive
technique that utilizes shock waves to disintegrate kidney stones. The
Company's lithotripsy operations have historically contributed a
substantial amount of operating income to the Company. During fiscal 1995,
the Company experienced modest downward pricing pressures in its
lithotripsy operations. These operations may continue to experience
pricing pressures in the future. A material change in the operating
performance of the lithotripsy business could have a material adverse
effect on the consolidated operating results of the Company.
In 1993, the Health Care Financing Administration ("HCFA") released
a proposed rule reducing the rate at which ambulatory surgery centers and
certain hospitals would be reimbursed for the technical component of a
lithotripsy procedure. Although the HCFA has not taken any further action,
the adoption of this proposed rule could have a material adverse effect on
the Company's lithotripsy revenues. See "-- Recent Operating Losses; Future
Operating Results Uncertain."
CONCENTRATION OF LARGE PAYORS
Managed care has grown substantially. Consequently, the percentage
of the population that is covered by organizations providing such type of
care has expanded significantly in terms of their control over an
increasing portion of the health care economy. Managed care plans have
continued to consolidate to enhance their ability to influence the delivery
of health care services. The Company has a number of contractual
arrangements with managed care organizations and other parties. None of
these arrangements individually accounted for more than 5% of the Company's
net revenues in the year ended December 31, 1995 and in the nine months
ended September 30, 1996; however, ten managed care customers accounted for
approximately 12% and 11% of the Company's infusion therapy revenue in the
year ended December 31, 1995 and the nine months ended September 30, 1996,
respectively, and the loss of such customers could have a material adverse
effect on the Company's business, financial condition and results of
operations.
INTENSELY COMPETITIVE INDUSTRY
The alternate site health care market is highly competitive and is
experiencing both horizontal and vertical consolidation. Some of the
Company's current and potential competitors include (i) integrated
providers of alternate site health care services; (ii) large national
hospital chains; (iii) local providers of multiple products and services
for the alternate site health care market; and (iv) physicians, including
physicians with whom the Company previously had business arrangements. The
Company has experienced increased competition from hospitals and physicians
who have sought to increase the scope of services through their offices,
including services similar to those offered by the Company. Integrated
alternate site health care companies and certain of the Company's other
competitors have superior financial, marketing and managerial resources,
size, purchasing power and strategic relationships with providers, referral
sources such as physicians and traditional indemnity and managed care
payors. Moreover, there are relatively few barriers to entry in the local
markets which the Company serves. Local or regional companies are currently
competing in many of the home health care markets served by the Company and
others may do so in the future. The Company expects its competitors to
continue to improve their service offerings and price competitiveness. The
Company also expects its competitors to develop new strategic relationships
with providers, referral sources and payors, which could result in a rapid
dramatic increase in competition. New service introductions and
enhancements, acquisitions, continued industry consolidation and the
development of strategic relationships by the Company's competitors could
cause a significant decline in sales or loss of market acceptance of the
Company's services or intense price competition, or make the Company's
services noncompetitive. The Company expects to continue to encounter
increased competition in the future that could limit its ability to
maintain or increase its market share. There can be no assurance that the
Company will be able to compete successfully against current or future
competitors or that competitive pressures will not have a material adverse
effect on the Company's business, financial condition and results of
operations.
FUTURE HEALTH CARE PROPOSALS AND LEGISLATION
In recent years, an increasing number of legislative initiatives
have been introduced or proposed in Congress and in state legislatures that
would effect major changes in the health care system, either nationally or
at the state level. Among the proposals under
8
<PAGE> 11
consideration are various insurance market reforms, forms of price control,
expanded fraud and abuse and anti-referral legislation and further
reductions in Medicare and Medicaid reimbursement. The adoption and
implementation of any of the above or other proposals could have a material
adverse effect on the business of the Company.
POTENTIAL PROFESSIONAL LIABILITY
The services of the Company involve an inherent risk of
professional liability. The Company maintains insurance consistent with
industry practice and such insurance has been adequate to cover claims
asserted against the Company as of the date hereof. There can be no
assurance that the amount of insurance currently maintained by the Company
will continue to satisfy all claims made against it, or that the Company
will be able to obtain insurance in the future at satisfactory rates or in
adequate amounts. The Company cannot predict the effect that any such
claims, regardless of their ultimate outcome, might have on its business,
reputation or its ability to attract and retain patients.
CHANGES IN TECHNOLOGY
The alternate site infusion business of the Company is dependent on
physicians continuing to prescribe the administration of drugs and
nutrients through intravenous and other infusion methods. Intravenous
administration is often the most appropriate method for treating critically
ill patients and is often the only way to administer proteins and
biotechnology drugs. Nonetheless, technological advances in drug delivery
systems, the development of therapies that can be administered orally and
the development of new medical treatments that cure certain complex
diseases or reduce the need for infusion therapy could adversely impact the
business of the Company.
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of the Common Stock is likely to be highly
volatile and may be significantly affected by factors such as actual or
anticipated fluctuations in the Company's operating results, new products
or contracts by the Company or its competitors, conditions and trends in
the healthcare industry, adoption of new accounting standards affecting the
healthcare industry, changes in financial estimates by securities analysts,
general market conditions and other factors. In addition, the stock market
has from time to time experienced significant price and volume fluctuations
that have particularly affected the market prices for the common stocks of
healthcare companies. These broad market fluctuations may adversely affect
the market price of the Common Stock. In the past, following periods of
volatility in the market price of a particular company's securities,
securities class action litigation has often been brought against the
company. There can be no assurance that such litigation will not occur in
the future with respect to the Company; such litigation could result in
substantial costs and a diversion of management's attention and resources,
which could have a material adverse effect upon the Company's business,
financial condition and results of operations.
DETERMINATION OF OFFERING PRICE
This Prospectus may be used from time to time by the Selling
Stockholders who offer the Offered Securities registered hereby for sale,
and the offering price of such Offered Securities will be determined by the
Selling Stockholders and may be based on market prices prevailing at the
time of sale, at prices relating to such prevailing market prices, or at
negotiated prices.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to
the Common Stock beneficially owned by each Selling Stockholder as of
September 24, 1996 and as adjusted to give effect to the sale of such
securities. The securities offered in this Prospectus by the Selling
Stockholders are the Offered Securities. The Offered Securities are being
registered to permit public secondary trading of such securities. See "Plan
of Distribution."
The Offered Securities may be offered from time to time by the
Selling Stockholders named below or their nominees, and this Prospectus may
be required to be delivered by persons who may be deemed to be underwriters
in connection with the offer or sale of such securities. See "Plan of
Distribution."
9
<PAGE> 12
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(1)(2) COMMON OFFERING(1)(2)(3)
---------------------- STOCK ------------------------
SELLING STOCKHOLDERS AMOUNT PERCENT OFFERED AMOUNT PERCENT
<S> <C> <C> <C> <C> <C>
Olav Bergheim 40,000 * 40,000 0 -
Rita and Don Gillespie 67,733 * 44,444 23,289 *
Ivy Meds, Inc. 100,000 * 100,000 0 -
</TABLE>
* Less than 1%
(1) Shares of Common Stock subject to options or warrants which are
currently exercisable or exercisable within 60 days are deemed
outstanding for purposes of computing the percentage of the person
holding such options or warrants but are not deemed to be
outstanding for computing the percentage of any other person.
(2) Percentage computations are based on 42,404,289 shares of Common
Stock outstanding as of November 8, 1996.
(3) Assumes sale of all Common Stock offered hereby.
From February 1995 to August 1995, Mr. Bergheim was Executive Vice
President of the Company. Mr. Bergheim has not had any other material
relationship with the Company within the past three years other than as a
result of ownership of the securities of the Company.
Rita Gillespie is general manager for the Tampa, St. Petersburg and
Sarasota markets (the "Market Area"), and has held this position since
prior to September 1993. Ms. Gillespie has agreed to remain employed by the
Company through December 31, 1996, and thereafter may resign on sixty days
notice to the Company. Pursuant to agreements between the Company and the
Gillespies, Mr. and Ms. Gillespie have the right to receive certain
earn-out payments in the event the Market Area meets certain performance
targets in fiscal 1996. Don Gillespie was an employee of a subsidiary of
Curaflex until March 1996. Neither Rita Gillespie nor Don Gillespie has had
any other material relationship with the Company within the past three
years other than as a result of ownership of the securities of the Company.
Ivy Meds, Inc., a Colorado corporation doing business as Ivy Meds
of Denver, Inc. ("Ivy Denver") acquired the 100,000 shares of Common Stock
(the "Ivy Meds Shares") it is offering hereby pursuant to the Settlement
Agreement, Mutual Release and Covenant not to Sue dated as of September 20,
1996 (the "Ivy Meds Agreement") among Ivy Meds of America, a Colorado
general partnership ("Ivy America"), Ivy Denver, the Company and certain
other parties. Pursuant to the Ivy Meds Agreement, Ivy Denver has agreed
that it will sell the Ivy Meds Shares only in "Brokers' Transactions" (as
such term is defined under Rule 144 promulgated under the Securities Act).
The Company has been advised by Ivy Denver that the net proceeds
realized from the sale by Ivy Denver of the Ivy Meds Shares, and any part
thereof, will be divided equally among the following twenty-four
individuals and entities (the "Ivy Participants"):
Pete Baker, M.D. Robert L. Cox, M.D.
Burton P. Golub, M.D. Jesse M. Hofflin, M.D.
Jordan Gulinson, M.D. Phillip D. Hanna, M.D.
David C. Howson Seymour Katz, M.D.
Robin Kovachy, M.D. David B. Link, M.D.
Ronald E. Kramer, M.D. Frederick W. Lewis, M.D.
Richard T. McMahon, M.D. Ronald S. Murray, M.D.
Daniel M. Perlman, M.D. Mark G. Scattergood, Ph.D.
Merritt C. Rudolph, M.D. John Sabel, M.D.
Theodore H. Stathos, M.D. Donald A. Standberg, M.D.
Robert D. Weber, M.D. David R. Travarthern, M.D.
Josephine Williams, M.D. Burns, Wall, Smith and Mueller, P.C.
10
<PAGE> 13
Prior to the Company, Ivy Denver and certain other parties entering
into the Ivy Meds Agreement, Ivy Denver had contractual relationships with
the Company and Curaflex with respect to (i) the formation and operation of
Ivy America between the Company and Ivy Denver, and (ii) the furnishing of
prescription drugs and peripherals for home infusion services. Such
relationships were terminated pursuant to the Ivy Meds Agreement. Other
than in connection with such relationships, neither Ivy Denver nor any of
the Ivy Participants had any position, office or other material
relationship within the last three years with the Company or any
predecessor to the Company other than (i) as a member physician in the home
infusion business operated by Ivy Denver and for which the Company and
Curaflex furnished drugs and related products and services and (ii) as a
consultant to or counsel to Ivy Denver and/or Ivy America with respect to
its home infusion business The Company has been informed by Ivy Denver that
none of the Ivy Participants is the holder, of record or beneficially, of
any securities of the Company.
PLAN OF DISTRIBUTION
The Company has been advised by the Gillespies and Mr. Bergheim
that Offered Securities offered thereby may be sold from time to time in
transactions on the NYSE in privately negotiated transactions, through the
writing of options on the Offered Securities, or by a combination of these
methods, at fixed prices that may be changed, at market prices at the time
of sale, at prices related to market prices or at negotiated prices.
Ivy Denver has agreed that it will sell the Ivy Meds Shares only in
"Brokers' Transactions" (as such term is defined under Rule 144 promulgated
under the Securities Act). Pursuant to the Ivy Meds Agreement, the Company
has agreed to pay all commissions incurred in the sale of the Offered
Securities by Ivy Denver so long as such securities are sold through Paine
Webber, Inc.
The Selling Stockholders will act independently of the Company in
making decisions with respect to the timing, manner and size of each sale.
Except as set forth above, the Selling Stockholders may effect these
transactions by selling the Offered Securities to or through broker-dealers
and/or purchasers of the Offered Securities for whom they may act as agent.
The Company has filed with the Commission under the Securities Act,
a Registration Statement of which this Prospectus forms a part, with
respect to the resale of the Offered Securities from time to time as
described herein.
The Selling Stockholders and broker-dealers who act in connection
with the sale of the Offered Securities may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by
such broker-dealers and profits on the resale of the Offered Securities as
a principal may be deemed to be underwriting discounts and commissions
under the Securities Act.
DESCRIPTION OF SECURITIES
GENERAL
The authorized capital stock of the Company consists of an
aggregate of 75,000,000 shares of Common Stock, par value $.001 per share,
and 10,000,000 shares of Preferred Stock, par value $.001 per share ("the
Preferred Stock"). As of November 8, 1996, 42,404,289 shares of Common
Stock were outstanding, and no shares of Preferred Stock were outstanding.
COMMON STOCK
All shares of Common Stock have equal voting rights and, when
validly issued and outstanding, have one vote per share in all matters to
be voted upon by shareholders. The shares of Common Stock have no
preemptive, conversion or redemption rights and may only be issued as fully
paid and nonassessable shares. Cumulative voting in the election of
directors is not allowed. The holders of a majority of the issued and
outstanding shares of Common Stock are able to elect all directors of the
Company. Each holder of Common Stock, upon liquidation of the Company, is
entitled to receive a pro rata share of the Company's assets available for
distribution to common stockholders.
LEGAL MATTERS
Certain legal matters have been passed upon for the Company by
Paul, Hastings, Janofsky & Walker LLP.
11
<PAGE> 14
EXPERTS
As set forth in their report incorporated by reference herein, the
consolidated financial statements of the Company at December 31, 1995 and
1994 and for the years then ended have been audited by Ernst & Young LLP,
independent auditors. The consolidated financial statements of the Company
for the year ended December 31, 1993 have been audited by Ernst & Young
LLP, independent auditors, as to combination only. The financial statements
of those entities underlying the combination were audited by Deloitte &
Touche LLP, as it relates to T2 for the year ended September 30, 1993, and
by KPMG Peat Marwick LLP, as it relates to Curaflex, Arthur Andersen LLP,
as it relates to HealthInfusion, and Coopers & Lybrand LLP, Independent
Accountants, as it relates to Medisys, each for the year ended December 31,
1993. The financial statements referred to above are incorporated by
reference in this Registration Statement in reliance upon such reports
given upon the authority of such firms as experts in accounting and
auditing.
12
<PAGE> 15
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION IN CONNECTION WITH THE OFFERING BEING MADE HEREBY NOT
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . 2
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . . . . . . 9
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 9
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 11
DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 11
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
13
<PAGE> 16
CORAM HEALTHCARE
CORPORATION
184,444 SHARES
OF COMMON STOCK
PROSPECTUS
NOVEMBER 8, 1996
14
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses payable by the
Registrant in connection with the sale of the securities being registered
hereby. All of the amounts shown are estimates, except for the SEC
registration fee.
<TABLE>
<CAPTION>
ITEM AMOUNT
<S> <C>
SEC Registration Fee $ 250
Blue Sky fees and expenses 2,000
Printing and engraving expenses 1,500
Legal fees and expenses 25,000
Accounting fees and expenses 27,000
Miscellaneous fees and expenses 6,250
-------
Total $62,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
contains provisions permitting corporations organized thereunder to
indemnify directors, officers and other representatives from liabilities in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person was or is a director, officer, employee
or agent of the corporation, against liabilities arising in any such
action, suit or proceeding, expenses incurred in connection therewith, and
against certain other liabilities. Article Eight of the Registrant's
Certificate of Incorporation provides that the personal liability of the
directors of the Registrant to the Registrant or its stockholders for
monetary damages for a breach of fiduciary duty as a director is eliminated
to the maximum extent permitted by Delaware law. Article Nine of the
Registrant's By-laws provides for indemnification of the Registrant's
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS
(a) Exhibits:
2.1 -- Agreement and Plan of Merger entered into as of
October 19, 1996 among the Registrant, Integrated
Health Services, Inc. and IHS Acquisition XIX, Inc.
(incorporated by reference to Exhibit 2 of the
Registrant's Current Report on Form 8-K dated
October 19, 1996 and filed with the Securities and
Exchange Commission on November 1, 1996).
4.1 -- Form of Common Stock Certificate for the
Registrant's common stock, $.001 par value per
share. (Incorporated by reference to Exhibit 4.1
of the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994).
5.1 -- Opinion of Paul, Hastings, Janofsky & Walker
LLP.**
23.1 -- Consent of Ernst & Young LLP.*
23.2 -- Reserved
23.3 -- Consent of Deloitte & Touche LLP.*
23.4 -- Consent of KPMG Peat Marwick LLP.*
23.5 -- Consent of Arthur Andersen LLP.*
II-1
<PAGE> 18
23.6 -- Consent of Coopers & Lybrand LLP.*
23.7 -- Reserved
23.8 -- Consent of Paul, Hastings, Janofsky & Walker LLP
(included in Exhibit 5.1).**
24.1 -- Power of Attorney.**
* Filed herewith.
** Filed with the Securities and Exchange Commission as part of this
Registration Statement on September 27, 1996.
II-2
<PAGE> 19
ITEM 17. UNDERTAKINGS
The 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;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement, relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and where applicable such filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall not be deemed to be the initial bona fide
offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the Prospectus, to each person to whom the Prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the Prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be provided by Article 3 of Regulation S-X is not set forth in the
Prospectus, to deliver, or cause to be delivered to each person to whom the
Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such
interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to provisions described in
this Registration Statement 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 of
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.
II-3
<PAGE> 20
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 the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement No. 333-12955 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Denver, State of Colorado, on this 7th day of November, 1996.
CORAM HEALTHCARE CORPORATION
By: /s/ DONALD J. AMARAL
Donald J. Amaral
President and Chief Executive Officer
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C> <C>
/s/ DONALD J. AMARAL
Donald J. Amaral President and Chief Executive
Officer (Principal Executive
Officer) and Director November 7, 1996
*
James M. Sweeney Chairman November 7, 1996
*
Richard M. Smith Secretary and Chief Financial
Officer (Principal Financial
Officer) November 7, 1996
*
Richard A. Fink Director November 7, 1996
*
Andrew J. Nathanson Director November 7, 1996
*
Stephen G. Pagliuca Director November 7, 1996
L. Peter Smith Director
*
Dr. Gail R. Wilensky Director November 7, 1996
/s/ PAMELA M. SPANIAC
Pamela M. Spaniac Vice President and Controller
(Principal Accounting Officer) November 7, 1996
*By: /s/ Donald J. Amaral
Donald J. Amaral
Attorney-in-fact
</TABLE>
II-4
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
2.1 -- Agreement and Plan of Merger entered into as of
October 19, 1996 among the Registrant, Integrated
Health Services, Inc. and IHS Acquisition XIX,
Inc. (incorporated by reference to Exhibit 2 of
the Registrant's Current Report on Form 8-K dated
October 19, 1996 and filed with the Securities and
Exchange Commission on November 1, 1996).
4.1 -- Form of Common Stock Certificate for the
Registrant's common stock, $.001 par value per
share. (Incorporated by reference to Exhibit 4.1
of the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994).
5.1 -- Opinion of Paul, Hastings, Janofsky & Walker
LLP.**
23.1 -- Consent of Ernst & Young LLP.*
23.2 -- Reserved
23.3 -- Consent of Deloitte & Touche LLP.*
23.4 -- Consent of KPMG Peat Marwick LLP.*
23.5 -- Consent of Arthur Andersen LLP.*
23.6 -- Consent of Coopers & Lybrand LLP.*
23.7 -- Reserved
23.8 -- Consent of Paul, Hastings, Janofsky & Walker LLP
(included in Exhibit 5.1).**
24.1 -- Power of Attorney.**
</TABLE>
* Filed herewith.
** Filed with the Securities and Exchange Commission as part of this
Registration Statement on September 27, 1996.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in Amendment No. 1 to the Registration Statement (Form S-3) and related
Prospectus of Coram Healthcare Corporation for the registration of 184,444
shares of its common stock and to the incorporation by reference therein of
our report dated March 31, 1996, with respect to the consolidated financial
statements and schedule of Coram Healthcare Corporation included in
Amendment No. 2 to the Annual Report (Form 10-K/A) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Denver, Colorado
November 7, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-12955 of Coram Healthcare Corporation on
Form S-3 of our report dated November 17, 1993 (December 23, 1993 as to
Note 17) (relating to the financial statements of T2 Medical Inc. not
presented separately herein) appearing in Amendment No. 2 to the Annual
Report on Form 10-K/A of Coram Healthcare Corporation for the year ended
December 31, 1995, and to the reference to us under the heading "Experts"
in the Prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Atlanta, Georgia
November 7, 1996
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Coram Healthcare Corporation:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Orange County, California
November 7, 1996
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to
the incorporation by reference of our report dated March 18, 1994, covering
the consolidated financial statements of HealthInfusion, Inc. and
subsidiaries for the year ended December 31, 1993, and to all references to
our Firm included in Amendment No. 1 to Form S-3 Registration Statement
(No. 333-12955) of Coram Healthcare Corporation.
/s/ ARTHUR ANDERSEN LLP
Miami, Florida,
November 7, 1996
<PAGE> 1
EXHIBIT 23.6
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Amendment No.
1 to the Registration Statement on Form S-3 (file no. 333-12955) of Coram
Healthcare Corporation of our report dated February 11, 1994, on the
consolidated financial statements of Medisys, Inc. and Subsidiaries for the
year ended December 31, 1993, which report is included in the Annual Report
on Form 10-K of Coram Healthcare Corporation for the year ended December
31, 1995. We also consent to the reference to our Firm under the caption
"Experts."
/s/ COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
November 7, 1996
