SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
INNOVATIVE MEDICAL SERVICES
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 3841 33-0530289
(State of Incorporation) (Primary Standard (IRS Employer ID No.)
Classification Code)
1725 Gillespie Way, El Cajon, California 92020
(619) 596 8600
(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
MICHAEL L. KRALL
1725 Gillespie Way, El Cajon, California 92020
(619) 596 8600
(Name, Address and Telephone Number of Agent for Service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box: |_|
If any of the securities being offered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: X
CALCULATION OF REGISTRATION FEE
-------------------------------
Title of each Proposed Proposed
class of Amount Maximum Maximum Amount of
securities to be offering price aggregate registration
to be registered registered per Share offering price fee
---------------------------------------------------------------------------
common stock of
selling securities
holders 388,096 $2.05 $795,596.80 $198.90
* Estimated price in accordance with Rule 457(c)and based upon the last reported
sale on the NASDAQ SmallCap Market on May 23, 2001.
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.
The exhibit index appears on page ii-4 of the sequentially numbered pages of
this registration statement. this registration statement, including exhibits,
contains 19 pages.
TABLE OF CONTENTS
Prospectus Summary..................................................... 1
Risk Factors........................................................... 3
Where You Can Get More Information..................................... 9
Certain Information We Are Incorporating by Reference.................. 10
Forward Looking Statements............................................. 11
Description of Securities. ............................................ 12
Selling Securities Holders............................................. 13
Plan of Distribution................................................... 14
Transfer Agent ........................................................ 15
Legal Matters.......................................................... 15
Experts................................................................ 15
Material Changes from Annual Report
["LOGO WITH TEXT OF "INNOVATIVE MEDICAL SERVICES"]
PROSPECTUS
388,096 shares of common stock offered by the selling securities holders.
Innovative Medical Services will not receive any of the proceeds from the sale
of shares by the selling securities holders.
Our Shares are traded on the Nasdaq SmallCap Market under the symbol PURE.
On May 23, 2001, the closing sale price of the common stock, as reported on the
Nasdaq SmallCap Market, was $2.05 per share.
These are speculative securities, involve a high degree of risk and should be
purchased only by persons who can afford to lose their entire Investment. Please
see the section titled "Risk Factors", page 3.
These securities have not been approved or disapproved by the securities And
exchange commission nor has the commission passed upon the accuracy or Adequacy
of this prospectus. Any representation to the contrary is a Criminal offense.
The selling securities holders may sell the shares of common stock described
in this prospectus in public or private transactions, on or off the Nasdaq
SmallCap Market, at prevailing market prices, or at privately negotiated prices.
The selling securities holders may sell shares directly to purchasers or through
brokers or dealers. Brokers or dealers may receive compensation in the form of
discounts, concessions or commissions from the selling securities holders. More
information is provided in the section titled "Plan of Distribution page 14."
The date of this prospectus is _____, 2001
Prospectus Summary
Innovative Medical Services, is based in El Cajon, California. We market water
treatment and disinfecting solutions to a broad range of customers, including
pharmaceutical, healthcare and consumer markets. We have expanded from our niche
pharmacy market into other, broader markets with new products, including
residential and commercial water filtration systems, health and wellness-related
retail merchandise, e-commerce products, and silver ion bioscience technologies.
Historically, the Fillmaster line of products has generated the most revenues
for Innovative Medical Services. Our Fillmaster(R) pharmaceutical water
purification, dispensing and measuring products include the Pharmapure(R)water
purification system, the FMD 550 dispenser, the patented Fillmaster 1000e
computerized dispenser and the patented Scanmaster(TM)bar code reader. We also
market proprietary National Sanitation Foundation certified replacement filters
for the Fillmaster Systems.
During the past quarter, however, the water treatment division sales mix has
expanded to include our Nutripure(R)line of water treatment and filtration
systems includes the Nutripure 3000S-Series whole-house water softening systems,
sold throught Nurtipure water dealers; the Nutripure Elite reverse osmosis
point-of-use systems, the Nutripure 2000 countertop water filtration system and
the Nutripure Sport filtered sport bottle. We distribute our Nutripure products
in retail sales, catalogue placement, business-to-business sales, internet
promotion and in-home sales presentations. For the quarter ended April 30, 2001,
water treatment division sales, which include Fillmaster pharmacy sales,
Nutripure retail products and the Nutripure water dealer program were $667,300,
or approximately 95% of total quarter sales. Revenues for the nine month period
ended April 30, 2001 were $1,462,600.
We also operate an e-commerce health website, Nutripure.com(R), as distributor
of Bergen Brunswig products which provides consumers a wide variety of vitamins,
minerals, nutritional supplements, homeopathic remedies and natural products. In
addition to merchandise, the website offers comprehensive health and wellness
information in an easy-to-access, intuitive reference format. For the quarter
ended April 30, 2001, revenues from e-commerce were immaterial.
We have obtained worldwide manufacturing and marketing rights for advanced
silver ion technologies, antimicrobial technology that uses the biocidal
properties of ionic silver to kill bacteria viruses and fungi. The EPA
registrations for Axen and Axenohl as hard surface disinfectants were granted in
June of 2001. The Company plans to pursue FDA approval in the future, but no
applications have been made to date. The Company is currently researching the
FDA approval process and plans to hire an experienced FDA consultant to assist
with the process. With EPA approval the potential uses of Axen could make
dramatic improvement in retail hard surface disinfecting products as well as in
disinfecting hard surfaces in hospital ERs, surgeries, laboratories, dental and
medical offices. The Company has funded testing with the United Stated
Department of Agriculture for use of Axenohl in poultry processing. The USDA
reported that the testing was to be completed in June, and the Company is
awaiting the final report that will document the testing results. Additional
potential applications for this product include wound care, topical infection
care, and personal disinfecting retail products, which may require FDA approvals
as well as municipal water treatment, point-of-use/point-of-entry water
treatment products, which may require additional EPA approvals. For the quarter
ended April 30, 2001, revenues from sales of Axenohl to a cosmetics company in
South Korea were $30,300, or approximately 4% of total quarter sales.
Innovative Medical Services entered into a sales, marketing, distribution and
manufacturing agreement for particular geographic areas and particular market
segments for Axenohl/Axen with NVID International on November 24, 1999. On March
26, 2000, Innovative Medical Services entered into a superseding contract with
NVID and ETI-H2O, Inc. of Florida for exclusive, worldwide sales, marketing and
distribution rights for Axenohl/Axen. The latter contract is the subject of
pending litigation with NVID. The lawsuit seeks a judicial declaration that the
Manufacturing, Licensing and Distribution Agreement, dated March 26, 2000
between the Company, NVID, International, Inc. and ETI-H2O does not constitute a
binding contract and seeks unspecified damages. The lawsuit does not challenge
the binding effect of the Standard Manufacturing Agreements dated November 30,
1998 and September 17, 1999 between NVID, International, Inc. and ETI-H2O and
the November 24, 1999 License Agreement between the Company and NVID,
International, Inc. The dispute does not affect any of the Company's rights
associated with the EPA registrations. Under the registrations, ETIH2O is the
only EPA-approved producer of Axenohl and Axen. Registration under the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA) is required before a product
can be sold in the United States. Should NVID prevail in its lawsuit, Innovative
Medical Services would be limited by both geography and market segments in its
exclusive rights to sell Axenohl.
In January 2001, we acquired a pesticide technology which conforms to recent
U.S. Environmental Protection Agency criteria for environmentally safe
pesticides. The product line provides excellent results against cockroaches,
ants, palmetto bugs, silverfish, waterbugs, ticks, fleas, lice and garden pests.
The U.S. Environmental Protection Agency approved RoachX is the first product of
the line. RoachX is over 96% effective in three to four days with one
application for indoor/outdoor eradication of cockroaches. We market RoachX to
retailers, commercial pest control companies and businesses in the United States
and abroad. For the quarter ended April 30, 2001, revenue from pesticide sales
which began during the quarter were $3,500.
During fiscal 2001, we launched a marketing program offering existing
independent water treatment dealers a line of residential water softening and
other point-of-use water treatment equipment for sale to the public under our
Nutripure brand. The program also provides third party financing to consumers
for the purchase of water treatment equipment. Currently the financing is for
consumers of independent water treatment dealers selling water softening
equipment produced by other manufacturers and not the Company's Nutripure
products, although we intend to extend the financing program to include the
Company's line of Nutripure products. We have partnered with MBNA and Automated
Payment Services for the financing and administration of the program.
Securities Offered: 388,096 shares offered by the selling securities holders.
We are not offering any of the selling securities holders securities. These
shares may be sold by the holders from time to time at prevailing market prices.
We will not receive any of the proceeds from any sale of the selling securities
holders shares. See "Selling securities holders" page 13.
Use Of Proceeds: Innovative will not receive any of the proceeds from any sale
of the selling securities holder shares.
Risk Factors
These securities involve a high degree of risk. Prospective purchasers should
consider carefully, among other factors set forth in the prospectus, the
following:
Risks of Our Business
1. We had a loss of $1,745,430 in our most recent fiscal year and may continue
to have losses in the future which may impair the value of an investment in the
shares.
During the fiscal year ended July 31, 2000 we incurred a loss of $1,745,430.
This loss resulted primarily from declining sales of our Fillmaster(R) products
and significant expenditures on future products in anticipation of creating
future revenue. If our revenue growth is slower than we anticipate or our
operating expenses exceed our expectations, it may take an unforeseen period of
time to achieve or sustain profitability or we may never achieve or sustain
profitability. This may result in an adverse effect on the market value of an
investment in the shares.
2. Our market for Fillmaster(R)Products is maturing and sales are declining.
Fillmaster sales have declined approximately 46% from fiscal year 1999 to fiscal
year 2000. Fillmaster revenues have represented almost 100% of our revenue for
the past five fiscal years. We believe the decline in Fillmaster revenues is due
to multiple factors, including the fact that the market for pharmacy products is
maturing in that there is a decreasing number of pharmacy chains that do not
have water filtration products, and that we have sold systems to most major
chains. In addition, the Company is facing its first significant competiro in
the pharmacy industry, FreshWater Systems. The competitor's impact on the market
has affected the volume of filter replacement sales of the Company. The decline
in Fillmaster sales may have an adverse effect upon our ability to not only
achieve profitability but also to finance the development and marketing of new
products. This may result in an adverse effect on the market value of an
investment in the shares.
3. We are marketing new products and technology which have not been accepted
into the marketplace.
We have begun marketing several new antimicrobial silver ion technologies to
industrial markets including healthcare, dental, veterinary and food processing
as well as to consumer products markets as well as environmentally safe
pesticides. Revenues from these new products during the fiscal quarter ended
April 30, 2001. Risks involved in introducing these new products include
liability for product effectiveness and competition from existing or emerging
sources.
4. Some of our new bioscience products must be approved by government agencies,
and we may be delayed or prevented from selling the new products until such
approvals are obtained.
Some of our new bioscience applications for the healthcare markets and food
preparation markets will require government agencies approvals prior to
marketing or sale in the United States. We have not yet applied for Food and
Drug Administration or Department of Agriculture approval. If these applications
are not approved we will not be able to market or sell such products which would
limit the revenues which may be realized from bioscience products. Even after
approval, we will remain subject to changing governmental policies regulating
antimicrobial products. We also intends to take these technologies to the
international marketplace, and international business carries a great deal of
risk with regard to foreign governments, banking and markets.
5. Our new products will be competing against well established and extremely
large chemical and pharmaceutical companies.
Our silver ion products and pesticide products will be competing in markets
dominated by extremely large, well financed and internationally recognized
chemical and pharmaceutical companies. Our ability to compete will depend upon
developing our brand recognition and distribution methods while are competitors
already have well established brands and distribution and many times our
financial ability. Focused competition by such chemical and pharmaceutical
giants could substantial limit our potential market and ability to profit from
these products.
6. We are involved in litigation with NVID International, Inc., the licensor of
our rights to the Axenhnol, our silver ion antimicrobial technology. Loss or
impairment of our license to manufacture and market Axenhnol could have a
materially adverse effect on our revenues and profitability.
In April 2001, NVID International, Inc., the licensor of our Axenhnol, silver
ion antimicrobial technology filed a Declaratory Judgment action against us. The
lawsuit seeks a judicial declaration that the Manufacturing, Licensing and
Distribution Agreement, dated March 26, 2000 between us, NVID, International,
Inc. and ETI-H2O, Inc., does not constitute a binding contract and seeks
unspecified damages. Any loss or impairment of our license to manufacture and
market Axenhnol based products could have a materially adverse effect on our
revenues and profitability.
7. We may not be able to protect and enforce our patents and intellectual
property.
We rely or may in the future rely on a combination of patent,
trademark, trade secret and copyright law and contractual restrictions to
protect the proprietary aspects of our technology and business. These
legal protections afford only limited protection for our intellectual property
and trade secrets. Despite our efforts to protect our proprietary rights,
unauthorized parties may attempt to copy aspects of our proprietary technology
or otherwise obtain and use information that we regard as proprietary.
We have filed for U.S. and foreign patent applications and trademark
registrations for our patents and trademarks. It is also possible that
competitors or others will create and use products in violation of our patents
and adopt service names similar to ours. Such patent infringement could have a
material, adverse effect on our business. Adopting similar names and trademarks
by competitors could lead to customer confusion. Any claims or customer
confusion related to our trademarks could negatively affect our business.
Litigation may be necessary to enforce our intellectual property rights and
protect our trade secrets. If third parties prepare and file applications in the
United States, or other countries that claim trademarks used or registered by
us, we may oppose those applications and be required to participate in
proceedings before the regulatory agencies who determine priority of rights to
the trademarks. Any litigation or adverse priority proceeding could result in
substantial costs and diversion of resources and could seriously harm our
business and operating results.
Finally, to the extent that we operate internationally, the laws of
many countries may not protect our proprietary rights to as great an extent as
do the laws of the United States. Many countries have a "first-to-file"
trademark registration system. As a result, we may be prevented from registering
or using our trademarks in certain countries if third parties have previously
filed applications to register or have registered the same or similar trademark.
Our means of protecting our proprietary rights may not be adequate, and our
competitors could independently develop similar technology.
8. We may face liability for content on our Nutripure.com website.
Third parties may claim that posting health and wellness information on our
website makes us liable for damage caused by use of the products sold or that
such information is practicing medicine without a license. Any such claim,
whether meritorious or not, could be time-consuming, result in costly
litigation. Although we maintain general liability insurance, our insurance may
not cover potential claims of the types described above or may not be adequate
to indemnify us for all liability that may be imposed. Any imposition of
liability that is not covered by insurance or is in excess of insurance coverage
could harm our business.
9. Breaches of security on the internet may slow the growth of e-commerce and
subject us to liability.
The need to securely transmit confidential information such as credit card and
other personal information over the Internet has been a significant barrier to
e-commerce and communications over the Web. Any well-publicized
compromise of security could deter more people from using the Web or from using
it to conduct transactions that involve transmitting confidential information,
such as purchases of goods or services. To the extent that our Nutripure.com
activities involve personal consumer information, such as credit card numbers,
security breaches could disrupt our business, damage our reputation and expose
us to a risk of loss or litigation and possible liability. We could be liable
for claims based on unauthorized purchases with credit card information,
impersonation or other similar fraud claims. Claims could also be based on other
misuses of personal information, such as for unauthorized marketing purposes. We
may need to spend a great deal of money and use other resources to protect
against the threat of security breaches or to alleviate problems caused by
security breaches.
10. We face risks associated with government regulation of and legal
uncertainties surrounding the internet.
Any new law effecting the internet could increase our cost of
doing business or otherwise adversely affect our business. Laws directly
applicable to internet communications, commerce and advertising are becoming
more prevalent. The law governing the internet, however, remains largely
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws governing intellectual
property, copyright, privacy, obscenity, libel and taxation apply to the
internet. In addition, the growth and development of e-commerce may prompt calls
for more stringent consumer protection laws and taxation of internet commerce.
Governments in foreign jurisdictions may regulate Internet or other online
services in such areas as content, privacy, network security, encryption or
distribution more stringently than in the United States. This may affect our
ability to conduct business internationally. We also may be subject to future
regulation not specifically related to the Internet, including laws affecting
direct marketers.
11. We may face product liability for the products we manufacture and sell.
As a business which manufactures and markets products for use by consumers, we
may become liable for any damage caused by our products when used in the manner
intended. Any such claim of liability, whether meritorious or not, could be
time-consuming, result in costly litigation. Although we maintain general
liability insurance, our insurance may not cover potential claims of the types
described above or may not be adequate to indemnify us for all liability that
may be imposed. Any imposition of liability that is not covered by insurance or
is in excess of insurance coverage could harm our business.
12. We may face liability for marketing our Nutripure consumer water filtration
products with the phrase "Pharmacist Recommended".
We use the phrase "Pharmacist Recommended" in our marketing materials for
Nutripure consumer water filtration products. We base our use of the phrase on
limited focus group information and comments received from individual
pharmacists regarding the benefits of purified water. No independent pharmacist
organization has ever issued us a recommendation or even evaluated our products.
As a result there is a risk that allegations of deceptive advertising could be
made against us by state or federal agencies responsible for enforcing truth in
advertising laws. Whether such allegations would be meritorious or not, the
negative publicity of such allegations could have a material adverse effect on
our sales of consumer water filtration products. In addition fines could be
imposed upon us and we could be required to change our marketing material which
would represent a material cost to us.
13. Doing business in Brazil present risks for a small company doing business in
other countries.
Doing business in Brazil while being a small business headquartered in the
United States presents risks associated with the cost of developing and
maintaining operations in a foreign country with an unfamiliar legal and
business environment. In addition, volatility in the value of the Brazilian
currency creates uncertainty as to the profitability of operating in Brazil. If
our Brazilian operations are not successful it could have a materially adverse
effect upon our business.
Risks of Investing in our Common Stock
1. The price and trading volume of our common stock has been highly volatile and
could adversely effect an investor's ability to sell the shares and the
available price for the shares when sold.
Since going public in August 1996, the price and trading volume has been highly
volatile. The price range has been from below $1 per share to over $7 per share.
In addition, the monthly trading volume has varied from under 200,000 shares to
over 3,000,000 shares. Investors need to consider this volatility which could
result in lower prices being available to the investor if the investor desires
to sell their shares at a given time.
2. The listing of our common stock on the Nasdaq SmallCap Market is subject to
our meeting their continued listing requirements and failure to maintain our
listing could adversely effect an investor's ability to sell the shares and the
available price for the shares when sold.
Our common stock is listed on the Nasdaq SmallCap Market and is subject to being
removed from this market if we do not continue to meet the continued listing
requirements. These continued listing requirements include maintaining a stock
price over $1 per share as well as maintaining at least $4,000,000 in assets
with $2,000,000 of net assets as well as other requirements. If we should fail
to maintain these requirements and our common stock was moved from the Nasdaq
SmallCap market and was traded on the Over-The-Counter Electronic Bulletin Board
Market which does not have similar continued listing requirements, an investor's
available price and ability to sell the shares could be adversely effected as
many broker-dealers and many investors will not trade or invest in securities
traded on the Over-The-Counter Electronic Bulletin Board Market.
3. Our common stock may be classified as a "Penny Stock" which could adversely
affect an investor's ability to sell the shares and the available price for the
shares when sold.
In the event that our common stock was removed from the Nasdaq SmallCap Market
for failure to meet the continued listing criteria, we believe that our common
stock would be characterized as "penny stock" under U.S. Securities and Exchange
Commission regulations. As such, broker-dealers dealing in our common stock will
be subject to the disclosure rules for transactions involving penny stocks which
require the broker-dealer to determine if purchasing our common stock is
suitable for a particular investor. The broker-dealer must also obtain the
written consent of purchasers to purchase our common stock. The broker-dealer
must also disclose the best bid and offer prices available for our stock and the
price at which the broker-dealer last purchased or sold our common stock. These
additional burdens imposed upon broker-dealers may discourage them from
effecting transactions in our common stock, which could make it difficult for an
investor to sell their shares.
4. The number of shares issuable upon exercise of stock options and outstanding
common stock purchase warrants may adversely effect the market price for our
shares.
We have adopted a 1996 Incentive Stock Option Plan, a 1996 Directors and
Officers Stock Option Plan, a 1998 Directors and Officers Stock Option Plan, a
2000 Directors and Officers Stock Option Plan, a Scientific Consultants and
Advisors Stock Option Plan and an ETI H2O Corporation Stock Option Plan for our
subsidiary which manufactures Axenhol. We have reserved 6,500,000 common shares
for issuance under these plans. As of the date of this prospectus options to
acquire over 4,200,000 shares have been awarded pursuant to these plans. In
addition, common stock purchase warrants to acquire up to 83,334 shares of
common stock for $4.00 per share on or before January 28, 2003 are currently
outstanding and common stock purchase warrants to acquire up to 88,640 shares
of common stock for $3.468 per share on or before July 31, 2002 are also
outstanding. The exercise of options and common stock purchase warrants and sale
of underlying shares could have an adverse effect on the market for the shares.
5. Previously outstanding convertible debentures contain an anti-dilution
provision which could result in additional shares being issued to the holder in
the event we declare a reverse split of the outstanding common stock, thereby
further diluting the ownership of our common stock and possibly depressing the
price of the common stock.
The convertible debentures converted on July 31, 2001 contained an anti-dilution
provision. This provision states that in the event we declare a reverse split of
the outstanding common stock within 180 days of a conversion of the convertible
debenture into common stock, the holder of the convertible debenture may elect
to have their conversion recalculated using the average closing bid price of the
common stock as reported on the NASDAQ SmallCap Market for the ten trading days
immediately following the effective date of the reverse split. If such
recalculation would result in a greater number of shares than received from the
prior conversion, we are required to issue such additional shares to the holder
within five business days of receipt of re-calculated conversion notice.
Where You Can Get More Information
We are subject to the reporting requirements of the Securities Exchange Act of
1934 and files annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy these reports, proxy statements
and other information at the SEC's public reference
facilities at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549. You can request copies of these documents by writing to the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the public reference facilities. SEC
filings are also available at the SEC's Web site at http://www.sec.gov.
Our common stock is listed on the Nasdaq SmallCap Market, and you can read and
inspect our filings at the offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file with
them. Incorporation by reference allows us to disclose important information to
you by referring you to those other documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
have filed a registration statement on Form S-3 under the Securities Act of 1933
with the SEC with respect to the common stock being offered pursuant to this
prospectus. This prospectus omits certain information contained in the
registration statement on Form S-3, as permitted by the SEC. Refer to the
registration statement on Form S-3, including the exhibits, for further
information about us and our common stock being offered pursuant to this
prospectus. Statements in this prospectus regarding the provisions of certain
documents filed with, or incorporated by reference in, the registration
statement are not necessarily complete and each statement is qualified in all
respects by that reference. Copies of all or any part of the registration
statement, including the documents incorporated by reference or the exhibits,
may be obtained upon payment of the prescribed rates at the offices of the SEC
listed above.
Upon request, we will provide without charge to each person to whom a copy of
this prospectus has been delivered a copy of any information that was
incorporated by reference in the prospectus (other than exhibits to documents,
unless the exhibits are specifically incorporated by reference into the
prospectus). We will also provide upon request, without charge to each person to
whom a copy of this prospectus has been delivered, a copy of all documents filed
from time to time by us with the SEC pursuant to the Exchange Act of 1934.
Requests for copies should be directed to Donna Singer Vice President,
Innovative Medical Services, 1725 Gillespie Way, El Cajon, California 92020.
Telephone requests may be directed to Ms. Singer at (619) 596 9600.
Certain Information We Are Incorporating By Reference
We incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
-- Form 8-A Registration Statement as amended filed on July 22, 1996 and the
Description of the Common Stock incorporated by reference therein from the
Registration Statement on Form SB-2 dated August 8, 1996 SEC file no
333-434.
-- Form 10-KSB Annual Report for the fiscal year ended July 31, 2000 as
amended on August 10, 2001
-- Form 10-QSB Quarterly Report for the 3 months ended Oct. 31, 2000 as
amended on August 10, 2001
-- Form 10-QSB Quarterly Report for the 6 months ended Jan. 31, 2001 as
amended on August 10, 2001
-- Form 10-QSB Quarterly Report for the 9 months ended April 30, 2001 as
amended on August 10, 2001
-- Form 8-K Current Report filed May 24, 2001
-- All other documents filed by us after the date of this prospectus under
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
are incorporated by reference herein to be a part thereof from the date of
filing of such documents.
You may request a copy of these filings at no cost, by writing, telephoning or
e-mailing us at the following address:
Innovative Medical Services
1725 Gillespie Way, El Cajon, California 92020
e-mail: dsinger@imspure.com
This prospectus is part of a registration statement we filed with the United
States Securities and Exchange Commission. You should rely only on the
information incorporated by reference or provided in this prospectus. No one
else is authorized to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
Forward-Looking Statements
This prospectus contains and incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including statements
regarding The Company's drug development programs, clinical trials, receipt of
regulatory approval, capital needs, collaborative agreements, intellectual
property, expectations and intentions. Forward-looking statements may be
identified or qualified by words such as "likely", "will", "suggests", "may",
"would", "could", "should", "expects", "anticipates", "estimates", "plans",
"projects", "believes", or similar expressions and variants of those words or
expressions.
Forward-looking statements necessarily involve risks and uncertainties,
and The Company's actual results could differ materially from those anticipated
in the forward-looking statements due to a number of factors, including those
set forth below under "Risk Factors" and elsewhere in this prospectus. The
factors set forth below under "Risk Factors" and other cautionary statements
made in this prospectus should be read and understood as being applicable to all
related forward-looking statements wherever they appear in this prospectus. The
forward-looking statements contained in this prospectus represent our judgment
as of the date of this prospectus. The Company cautions readers not to place
undue reliance on such statements. We undertake no obligation to update publicly
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
Description Of Securities
Common Stock: We are authorized to issue up to 20,000,000 shares of its no par
value common stock. Each share is entitled to one vote on matters submitted to a
vote of the shareholders. There is no cumulative voting of the common stock. The
common stock shares have no redemption provisions nor any preemptive rights. We
are also authorized to issue up to 5,000,000 shares of preferred stock, the
rights and preferences of which may be set from time to time prior to issuance
by the Board of Directors.
Private Placement Warrants: 83,334 Private Placement Warrants were sold in
January, 2001. These January 2001 Private Placement Warrants entitle the holder
to acquire an additional share of common stock for $4.00 per share on or before
January 28, 2003.
Convertible Debentures: In April 2001, two convertible debentures, each with a
principal amount of $100,000 were issued. The debentures accrued interest at the
rate of 10% per annum resulting in $2,465.75 of accrued interest throught the
date of conversion on July 31, 2001. The debentures were converted into 44,320
units each consisting of one share of common stock and a common stock purchase
warrant to acquire 44,320 shares on or before July 31, 2002. The conversion
price for each unit was $2.312 per unit which was equal to 80% of the average
closing bid price of the common stock as reported on the NASDAQ SmallCap Market
for the five trading days immediately preceding the date of receipt of a notice
of conversion on July 31, 2001. The $3.468 exercise price of the common stock
purchase warrant contained in the units is equal to 120% of the average closing
bid price as reported on the NASDAQ SmallCap Market for the five trading days
immediately preceding the date of receipt of a notice of conversion on July 31,
2001.
In the event of default defined as including failure to repay upon maturity,
bankruptcy or insolvency, default interest at the rate of 20% per annum would
have accrued on the debentures as well as all costs of collection and attorneys
fees.
In addition the Convertible Debentures contained an anti-dilution provision.
This provision stated that in the event we declare a reverse split of the
outstanding common stock within 180 days of a conversion of the Convertible
Debenture into common stock, the holder of the Convertible Debenture may elect
to have their conversion recalculated using the average closing bid price of the
common stock as reported on the NASDAQ SmallCap Market for the ten trading days
immediately following the effective date of the reverse split. The holder would
provide notice to us of its election. At this time we would recalculate the
prior conversion using the post reverse split pricing. If such recalculation
would result in a greater number of shares than received from the prior
conversion, we are required to issue such additional shares to the holder within
five business days of receipt of re-calculated conversion notice. The purpose of
this provision is to protect the holder from loss of value of converted shares
due to a reverse split based upon the assumption that the market price of shares
following a reverse split will quickly be substantially less than the reverse
split multiple following the effective date of the reverse split.
For example:
- The holders received 88,640 shares for its conversion on July 31, 2001
at a conversion price of $2.312 per share;
- Assume a two to one reverse split is effective prior to January 29,
2002;
- Assume the ten day average closing bid price following the effective
date of the reverse split is $3.00;
- The holders now have 44,320 shares for which it effectively paid
$4.624 per share less than 180 days ago;
- A recalculation of the conversion based upon post reverse split
pricing would result in recalculated conversion price of $2.40 per
share and 85,388 shares due to the holders;
- We would be obligated to issue an additional 41,068 shares to the
holder.
Selling Securities Holders
The following Selling securities holders whose shares have been registered for
public resale are set forth below:
SELLING SECURITIES SECURITIES %Before %After
SECURITIES HOLDER OWNED OFFERED Offering Offering
Solinvest Group, Ltd. 88,640 88,640 1.2% 0%
Multiasian Ventures Ltd. 88,640 88,640 1.2% 0%
Harold Singer 115,000 65,000 1.6% <1%
Harold W. Clark 30,000 30,000 <1% 0%
Albert Pick III 46,667 30,000 <1% <1%
Keystone Capital Mgmt. 25,000 25,000 <1% 0%
Solinvest Group, Ltd., is a corporation for which Mr. Alfred Peeper is the
control person. The shares offered by Solinvest Group, Ltd., include 44,320
shares acquired from the July 31, 2001 conversion of a $100,000 principal amount
convertible debenture issued in April 2001 and potential exercise of 44,320
common stock purchase warrants also obtained in the conversion.
Multiasian Ventures Limited, is a corporation for which Mr. Alfred Peeper is the
control person. The shares offered by Multiasian Ventures Limited include 44,320
shares which acquired from the July 31, 2001 conversion of a $100,000 principal
amount convertible debenture issued in April 2001 and potential exercise of
44,320 common stock purchase warrants also obtained in the conversion.
Mr. Singer's shares include exercisable options to acquire 50,000 shares and the
65,000 shares acquired in a private placement in April 2001 for $1..50 per
share.
Keystone Capital Management is a corporation for which Mr. Ralph Hibbitts is the
control person. Keystone Capital Management acquired its shares in a private
placement in April 2001 for $1.50 per share.
Mr. Clark and Mr. Pick acquired their shares in a private placement in April
2001 for $1.50 per share.
None of the Selling securities holders nor any of their affiliates have ever
held any position, office, or other material relationship with Innovative
Medical Services nor hold any additional shares of Innovative Medical Services.
Selling Securities Holders Plan Of Distribution
The Selling securities holders may sell or distribute its shares in transactions
through underwriters, brokers, dealers or agents from time to time or through
privately negotiated transactions, including in distributions to shareholders or
partners or other persons affiliated with the Selling securities holder.
The distribution of the Selling securities holders shares may be effected from
time to time in one or more transactions (which may involve crosses or block
transactions) in the following types of transactions:
1. Over-the-counter market sales
2. Privately negotiated sales
3. By writing of options on the shares (whether such options are listed on an
options exchange or otherwise).
Any of such transactions may be effected at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, at negotiated
prices or at fixed prices.
If the selling securities holders effect such transactions by selling the shares
to or through underwriters, brokers, dealers or agents, such underwriters,
brokers, dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the Selling securities holders or commissions
from purchasers of the shares for whom they may act as agent (which discounts,
concessions or commissions as to particular underwriters, brokers, dealers or
agents might be in excess of those customary in the types of transactions
involved).
A selling securities holder and any brokers, dealers or agents that participate
in the distribution of the securities might be deemed to be underwriters, and
any profit on the sale of the securities by them and any discounts, concessions
or commissions received by any such underwriters, brokers, dealers or agents
might be deemed to be underwriting discounts and commissions under the
Securities Act.
A selling securities holder may pledge the shares from time to time in
connection with such Selling securities holder's financing arrangements. To the
extent any such pledgees exercise their rights to foreclose on any such pledge,
and sell the shares, such pledgees may be deemed underwriters with respect to
such shares and sales by them may be effected under this prospectus. The Company
will not receive any of the proceeds from the sale of any of the shares by the
selling securities holder.
Under the Exchange Act and applicable rules and regulations promulgated
thereunder, any person engaged in a distribution of any of the shares may not
simultaneously engage in market making activities with respect to the shares for
a period, depending upon certain circumstances, of either two days or nine days
prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the selling securities holders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
promulgated thereunder, including without limitation Regulation M, which
provisions may limit the timing of purchases and sales of any of the shares by
the selling securities holder.
Under the securities laws of certain states, the shares may be sold in such
states only through registered or licensed brokers or dealers. In addition, in
certain states the shares may not be sold unless the shares have been registered
or qualify for sale in such state or an exemption from registration or
qualification is available and is complied with.
Transfer Agent: The transfer agent with respect to the shares is Computershare
Investor Services Inc., Lakewood, Colorado.
Legal Matters: The legality of the shares offered will be passed on for the
Company by Dennis Brovarone, Attorney at Law, Littleton, Colorado. Mr. Brovarone
is also a Director of Innovative Medical Services.
Experts: The financial statements incorporated by reference in this prospectus
from the Annual Report on Form 10-KSB for the year ended July 31, 2000 contains
two separate audit reports. We are relying on the report of Miller and McCollom,
Certified Public Accountants, for their report on the fiscal year ended July 31,
2000, given on the authority of said firm as experts in auditing and accounting.
We are also relying on the report of Steven Holland, Certified Public
Accountant, given on the authority of said firm as experts in auditing and
accounting for his report on the fiscal year ended July 31, 1999.
Material Changes
In January 2001, we acquired all manufacturing and marketing rights to the
patented and U.S. Environmental Protection Agency approved RoachX pesticide
product from the inventor, Gerald Weaver, PhD. The consideration for the
assignment of these rights was an employment agreement with Innovative, options
to acquire up to 200,000 shares of our common stock, $50,000 payable within 30
days of the agreement and $450,000 to be paid in $50,000 increments due upon
each $1,000,000 of net sales of RoachX. The Company manufactures RoachX at its
El Cajon, California facility from common and readily available chemicals and
ingredients that may be purchased from multiple manufacturers in the United
States. A patent application for RoachX was filed in February 1998 to protect
this nonaqueous form of insecticide consisting of a desiccant, preferably boric
acid, with additional ingredients for binding, stability and target insect
attraction.
In May 2001, we announced our Nutripure water dealer program and our partnering
with USFilter for the water softening and filtering equipment being sold under
the program. Our arrangement with USFilter is that we will only buy USFilter
equipment for the program and that USFilter will sell the equipment within the
United STates only to us. USFilter ships equipment in their ordinary course of
business upon receipt of purchase orders generated from the program. Other than
the purchase orders there is no written agreement between Innovative and
USFilter. The Nutripure water dealer program is offered to existing independent
water softener, water treatment equipment distributors. The independent dealers
must sign an exclusive equipment agreement with us. Thereafter the independent
dealer has access to the MBNA and Automated Payment Services financing system.
No person is authorized to give any information or to make any representation
other than those 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 a solicitation of an
offer to buy any securities other than the shares offered by this prospectus or
an offer to sell or a solicitation of an offer to buy the shares in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
TABLE OF CONTENTS
Prospectus Summary..................................................... 1
Risk Factors........................................................... 3
Where You Can Get More Information..................................... 9
Certain Information We Are Incorporating by Reference.................. 10
Forward Looking Statements............................................. 11
Description of Securities. ............................................ 12
Selling Securities Holders............................................. 13
Plan of Distribution................................................... 14
Transfer Agent ........................................................ 15
Legal Matters.......................................................... 15
Experts................................................................ 15
Material Changes from Annual Report .................................. 15
UNTIL xxxx, 2001 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
["Logo with text of "Innovative Medical Services""]
-------------------------
PROSPECTUS
-------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other arrangement under
which any controlling persons, director or officer of the Registrant is insured
or indemnified in any manner against any liability which he may incur in his
capacity as such, is as follows:
(a) The Company's Certificate of Incorporation provides the Company's Officers
and Directors the full extent of the protection offered by the General
Corporation Law of the State of California.
(b) The General Corporation Law of the State of California provides that a
corporation may include a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the directors' duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under the Corporation Law dealing with the
liability of directors for unlawful payment of dividend or unlawful stock
purchase or redemption, or (iv) for any transaction from which the director
derived an improper personal benefit. No such provision shall eliminate or limit
the liability of a director for any act or omission occurring prior to the date
when such provision becomes effective.
(c) The Company's Bylaws provide that the Company may indemnify its Officers and
Directors to the full extent permitted by the General Corporation Law of the
State of California.
(d) The General Corporation Law of the State of California provides that a
corporation may indemnify its directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
incurred by them in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the rights of the corporation), by reason of
being or having been directors or officers, if such directors or officers acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, they had no reasonable cause to believe their conduct was unlawful.
The indemnification provided the General Corporation Law of the State of
California is not exclusive of any other rights arising under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be borne by the
Registrant, are as follows:
SEC Filing Fee $233.07
NASD Filing Fee na
Printing Expenses 1,000
Accounting Fees and Expenses 0
Legal Fees and Expenses 25,000
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant sold securities which were not
registered under the Securities Act of 1933, as amended, as follows:
CERTAIN OPTION HOLDERS
# OF UNDERLYING
NAME OF OPTIONEE DATE COMMON STOCK CONSIDERATION
Glenn Hall 08/03/98 40,000 Services (1)
Minneapolis Company 11/16/98 300,000 Services (2)
Global Consultants Inc. 10/31/99 66,664 Services (3)
(1) 5 year options to acquire common stock at $0.625 per share granted in
consideration of services rendered in connection with the Company's obtaining a
line of credit.
(2) Options to acquire common stock at $1.1875 per share granted in
consideration of investment banking services to be rendered. In February 1999,
the Minneapolis Company surrendered the options in consideration of the
Registrant's agreement to terminate the investment banking agreement.
(3) Options to acquire common stock at $1.62 were granted in consideration of
public relations services. The Consulting Agreement was terminated by the
Company in July 2000 and the options expire on August 1, 2001.
JANUARY 1999 PRIVATE PLACEMENT
COMMON TOTAL
NAME OF PURCHASER DATE STOCK CONSIDERATION
Mitchell Kaminsky 01/29/99 117,766 175,000
Mathew Kanter 01/29/99 125,000 185,750
SEPTEMBER 1999 PRIVATE PLACEMENT
COMMON TOTAL
NAME OF PURCHASER DATE STOCK CONSIDERATION
Adler Corporation PYT, Ltd. 09/24/99 160,000 $200,000
MARCH 2000 PRIVATE PLACEMENT
TOTAL
NAME OF PURCHASER DATE UNITS(1) CONSIDERATION
Richard Rogers & Julie Rogers 03/30/00 14,815 $50,000
Mark Vittert & Carol Vittert 03/30/00 14,815 $50,000
Glen Wegner 03/30/00 14,815 $50,000
Orienstar Finance Limited 03/30/00 14,815 $50,000
Stanford E. Bazilian 03/30/00 103,704 $350,000
Sofisco Nominees Limitied 03/30/00 296,297 $1,000,000
Richard W. Strang Sr Trustee 03/30/00 14,815 $50,000
Strang Mech. Emp. Ret. Trust
William A. Shewalter 03/30/00 29,630 $100,000
John W. Dowd III 03/30/00 14,815 $50,000
Antonio C Alvarel 03/30/00 14,815 $50,000
Roy Thung 03/30/00 14,815 $50,000
Michael Rothaus 03/30/00 14,815 $50,000
Billy W. Ward 03/30/00 14,815 $50,000
James Pritsiolas 03/30/00 14,815 $50,000
George Tagaris 03/30/00 14,815 $50,000
(1) Each Unit consists of one share of common stock and one Warrant to acquire
and additional share of common stock for $5.25 on or before March 31, 2001.
ETIH20, INC. SHARE EXCHANGE
TOTAL
NAME OF PURCHASER DATE # of Shares CONSIDERATION
Diana L. Korpal 10/16/00 1,000 Share Exchange
Manuel A. Carrillo 10/16/00 2,000 Share Exchange
Ana Lorena Carrillo Pacheco 10/16/00 1,000 Share Exchange
Joan M. Curtis, 10.16/00 240 Share Exchange
Lawrence A. Stranch 10/16/00 1,000 Share Exchange
Jackson Allen Tuggle &
Lisbeth S. Tuggle 10/16/00 500 Share Exchange
Jerry K. Spivey 10/16/00 1,000 Share Exchange
Barbara L. Woolson 10/16/00 22,000 Share Exchange
Robert H. Cook, Jr. 10/16/00 1,500 Share Exchange
Brad Riggle 10/16/00 500 Share Exchange
Arthur Riley and Clarissa Riley 10/16/00 500 Share Exchange
Edwin A. Woolson 10/16/00 5,143 Share Exchange
Charles Stutts 02/09/01 20,000 Share Exchange
The Shares issued were in exchange for 100% of the outstanding common stock of
ETI H2O, Inc., a Florida corporation. Charles Stutts is a Receiver appointed to
collect outstanding debt of Andrew Arata in the case of the SEC v. NVID
International, Inc., Case No. 8:97-CV-758-T-27F. Mr. Stutts was issued these
shares pursuant to court order upon motion by Mr. Stutts. The Company issued
these shares in consideration of Mr. Arata's surrender of his shares in ETIH2O,
Inc.
OCTOBER 2000 PRIVATE PLACEMENT
COMMON TOTAL
NAME OF PURCHASER DATE STOCK CONSIDERATION
Genevieve Schiffmann 11/03/00 37,736 $100,000
Professional Trust Mgmt 11/03/00 18,868 $50,000
M.H. & Phyllis S. Singleton 11/03/00 9,434 $25,000
Bavarian Capital Partners 11/03/00 9,434 $25,000
Andrew DeVries III 11/20/00 18,868 $50,000
October 2000 Nutripure.com Share Exchange
TOTAL
NAME OF PURCHASER DATE # of Shares CONSIDERATION
Adler Corporation Pty, Ltd. 10/24/00 41,667 Share Exchange
Mathew Kanter 10/24/00 33,334 Share Exchange
William Schewalter 10/24/00 25,000 Share Exchange
James Pritsiolas 10/24/00 8,334 Share Exchange
FTP, Inc. 10/24/00 25,000 Share Exchange
Richard W. Strang, Sr., Trustee 10/24/00 8,334 Share Exchange
Giltner B. Stevens 10/24/00 8,334 Share Exchange
Albert Pick III 10/24/00 16,667 Share Exchange
N. Herrick Irrevocable 10/24/00 16,667 Share Exchange
Securities Trust
C/o Howard Herrick, Trustee
The Shares were issued in exchange for shares of Nutripure.com common stock, a
wholly owned subsidiary of the Registrant on the basis of one share of the
Registrant's common stock for every six shares of Nutripure.com common stock
exchanged.
JANUARY 2001 PRIVATE PLACMENT
TOTAL
NAME OF PURCHASER DATE UNITS(1) CONSIDERATION
Peter Rozok and
Susan Rozak 01/24/01 10,000 $ 30,000
Richard Strang 01/22/01 10,000 $ 30,000
James Pritsiolas 01/22/01 15,000 $ 45,000
William Shewalter 01/22/01 10,000 $ 30,000
Solinvest Group Ltd. 01/30/01 33,334 $100,002
Donnie R. Cox 01/30/01 5,000 $ 15,000
(1) Each Unit consists of one share of common stock and one Warrant to acquire
and additional share of common stock for $4.00 on or before January 28, 2002.
APRIL 2001 PRIVATE PLACEMENTS
NAME OF PURCHASER DATE SECURITIES CONSIDERATION
Solinvest Group, Ltd. 04/27/01 Conv. Deb. $100,000
Multiasian Ventures Ltd. 04/27/01 Conv. Deb. $100,000
Harry Singer 04/30/01 65,000 shares $ 97,500
Harold Clark 04/30/01 30,000 shares $ 45,000
Albert Pick 04/30/01 30,000 shares $ 45,000
Keystone Capital Mgmt. 04/30/01 25,000 shares $ 37,500
With respect to the above sales, the Company relied on Section 4(2) of the
Securities Act of 1933, as amended and Rule 505 of Regulation D for the March
2000 Private Placement. No advertising or general solicitation was employed in
offering the securities. The securities were offered to accredited investors or
existing shareholders of the Company who were provided all material information
regarding the private placements and all of the Company's reports filed with the
Securities and Exchange Commission to date. The securities were offered for
investment only and not for the purpose of resale or distribution, and the
transfer thereof was appropriately restricted by the Company.
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-B:
3.1(1) -- Articles of Incorporation, Articles of Amendment and Bylaws
4.1(1) -- Form of Class A Warrant
4.2(1) -- Form of Class Z Warrant
4.3(1) -- Form of Common Stock Certificate
4.4(1) -- Warrant Agreement
4.6(3) -- January 2001 Warrant
4.7 -- Convertible Debenture (previously filed)
4.8 -- Convertible Debenture Purchase Agreement (previously filed)
4.9 -- Convertible Debenture Warrant
5.1 -- Opinion of Dennis Brovarone, Attorney at Law
10.1(1) -- Employment Contract/Michael L. Krall
10.2(4) -- Manufacturing, Licensing and Distribution Agreement
10.3(5) -- Axhenhol License Agreement
10.4(5) -- Weaver - Roach X Assignment
10.5(6) -- Dodo Agreement [CONFIDENTIAL TREATMENT REQUESTED FOR CERTAIN
SECTIONS]
10.6(5) -- Promissory Note of Michael Krall
10.7(5) -- Promissory Note of Gary Brownell
23.1 -- Consent of Dennis Brovarone, Attorney at Law (see opinion)
23.2 -- Consent of Steven Holland, Certified Public Accountant
23.3 -- Consent of Miller and McCollom, Certified Public Accountants.
(1) Incorporated by reference from Form SB-2 registration statement SEC File #
333-00434 effective August 8, 1996
(2) Incorporated by reference from S-3 registration statement, SEC File
#333-36248 effective on May 17, 2000
(3) Incorporated by reference from S-3 registration statement, SEC File
#333-55758 effective on February 26, 2001
(4) Incorporated by reference from Current Report on Form 8-K filed on May 24,
2001
(5) Incorporated by reference from the Amended Annual Report on Form 10KSB for
the fiscal year ended July 31, 2000 filed on August 13, 2001
(6) Incorporated by reference from Form 10QSB/A for the nine month period ended
April 30, 2001 filed on August 13, 2001
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than 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.
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;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933 as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and authorized this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of El Cajon, State of California on August 13, 2001.
INNOVATIVE MEDICAL SERVICES
By: /s/ MICHAEL L. KRALL
---------------------------------
Michael L. Krall
Executive Officer
In accordance with the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
/s/ MICHAEL L. KRALL President, Chief Executive August 13, 2001
----------------------- Officer and Director
Michael L. Krall
/s/ GARY BROWNELL Chief Financial Officer, August 13, 2001
----------------------- Director
Gary Brownell
/s/ DENNIS BROVARONE Director August 13, 2001
-----------------------
Dennis Brovarone
/s/ DONNA SINGER Director August 13, 2001
-----------------------
Donna Singer