If the distribution were not to qualify as a tax-free spin-off, each Wizzard stockholder receiving shares of Interim common stock in the spin-off would be treated as if such stockholder had received a distribution in an amount equal to the fair market value of Interim common stock received, which would result in (1) a taxable dividend to the extent of such stockholders pro rata share of Wizzards current and accumulated earnings and profits, (2) a reduction in such stockholders basis in Wizzard common stock to the extent the amount received exceeds such stockholders share of earnings and profits and (3) a taxable gain to the extent the amount received exceeds the sum of the amount treated as a dividend and the stockholders basis in the Wizzard common stock. Any such gain would generally be a capital gain if the Wizzard common stock is held as a capital asset on the distribution date. In addition, Wizzard would recognize a taxable gain to the extent the fair market value of Interim common stock distributed in the spin-off exceeded its tax basis in such common stock.
In connection with the spin-off, WZE and Interim will enter into a Tax Matters Agreement under which each will agree to be responsible for certain liabilities and obligations following the spin-off. In general, under the terms of the Tax Matters Agreement, in the event that the spin-off, together were to result in greater taxes as a result of the failure of one party to act or an omission, the party responsible for such failure or omission would be responsible for all taxes imposed on the other resulting from such actions or inactions. For a more detailed discussion, see the section entitled Relationship between Interim and WZE Following the Spin-OffArrangement Between Interim and WZE Relating to the Spin-OffTax Matters Agreement. The indemnification obligations of each to the other and its subsidiaries, officers and directors are not limited in amount or subject to any cap. If required to pay on the indemnity under the circumstances set forth in the Tax Matters Agreement, either may be subject to substantial liabilities.
RELATED PARTY TRANSACTIONS
While the respective Interim and/or WZE Boards have not adopted a written Related Party Transaction Policy for the review, approval and ratification of transactions involving the related parties of Interim, related parties are deemed to be directors and nominees for director, executive officers and immediate family members of the foregoing, as well as security holders known to beneficially own more than five percent of our common stock. The policy covers any transaction, arrangement or relationship, or series of transactions, arrangements or relationships, in which WZE and/or Interim was, is or will be a participant and the amount exceeds $10,000, and in which a related party has any direct or indirect interest. The policy is administered by the appropriate Board acting as a committee of the whole.
In determining whether to approve or ratify a related party transaction, the appropriate Board will consider whether or not the transaction is in, or not inconsistent with, the best interests of the appropriate company. In making this determination, the appropriate Board is required to consider all of the relevant facts and circumstances in light of the following factors and any other factors to the extent deemed pertinent by the committee:
The position within or relationship of the related party with Interim and/or WZE;
The materiality of the transaction to the related party and Interim and/or WZE, including the dollar value of the transaction, without regard to profit or loss;
The business purpose for and reasonableness of the transaction, taken in the context of the alternatives available for attaining the purposes of the transaction;
Whether the transaction is comparable to a transaction that could be available on an arms-length basis or is on terms and conditions offered generally to parties that are not related parties;
Whether the transaction is in the ordinary course of Interim and/or WZE business and was proposed and considered in the ordinary course of business; and
The effect of the transaction on Interim and/or WZE business and operations, including on internal control over financial reporting and system of disclosure controls or procedures, and any additional conditions or controls (including reporting and review requirements) that should be applied to such transactions.
The policy contains standing pre-approvals for certain types of transactions which, even though they may fall within the definition of a related party transaction, are deemed to be pre-approved by Interim and/or WZE given their nature, size and/or degree of significance to the appropriate company. These include compensation arrangements with directors and executive officers for which disclosure is required in the proxy statement and sales of products or services in the ordinary course of business, including sales through Interim and/or WZE e-commerce websites.
In the event Interim and/or WZE inadvertently enters into a related party transaction that requires, but has not received, pre-approval under the policy, the transaction will be presented to the appropriate Board for review and ratification promptly upon discovery. In such event, the committee will consider whether such transaction should be rescinded or modified and whether any changes in our controls and procedures or other actions are needed.
The following inherent or potential conflicts of interest should be considered by prospective investors before subscribing for Shares. For a discussion of the conflicts of interest between Interim and WZE, see Relationship Between Interim and WZE Following the Spin-off.
WZE believes that any past transactions with its affiliates have been at prices and on terms no less favorable to Interim than transactions with independent third parties. Interim may enter into transactions with its affiliates in the future. However, Interim intends to continue to enter into such transactions only at prices and on terms no less favorable to Interim than transactions with independent third parties. In that context, Interim will require any director or officer who has a pecuniary interest in a matter being considered to excuse himself or herself from any negotiations. In addition, a majority of the Board is (and must continue to be) neither an officer nor have a pecuniary interest (other than as a shareholder or director) in any transactions with Interim. In turn, commencing immediately, a majority of the independent Board of Directors members (defined as having no pecuniary interest in the transaction under consideration) will be required to approve all matters involving related parties. Interwest Transfer Company, Inc. will be engaged to assure proper issuance of the Interim stock to the WZE shareholders.
INTERIM AND WZE
Founded in 1995, the business of Wizzard presently includes Media, Software and Healthcare. WZEs core focus is on our Media business, which consists of providing podcast hosting, distribution, audience analysis, advertising and app sales for podcast producers worldwide. Our Software business focuses on selling and supporting speech recognition and text-to-speech technology from IBM and AT&T. Our Healthcare business focuses on providing home health services and healthcare professional staffing in the Western part of the United States.
Podcast Hosting and Media Services - Wizzard Media provides a web based podcast distribution platform for podcast producers wanting to broadcast their audio or video show to people worldwide, in most cases through RSS distribution. Wizzard Media hosts over 1 million podcast episodes for over 10,000 podcast shows and distributes them to over 20 million unique monthly audience members. Wizzards service accumulates and provides audience statistics as well as provides advertising sales, ad insertion and App creation and sales to help podcasters generate revenue. Wizzard receives all publishing revenues generated and at least 50% of advertising and App sales revenues.
Speech Tools & Engine - Wizzard markets IBM and AT&T developer tools through agreements with those companies and receives a portion of the licensing fees collected. Wizzard offers Text-To-Speech Engines from IBM and AT&T to software developers and businesses around the world, as well as speech recognition engines from IBM. Wizzard receives payments for each copy/license distributed by its customers and in turn, pays a percentage of that payment to IBM or AT&T.
Home Healthcare Services - Interim is a state licensed and Medicare certified home health agency. In addition, Interim provides temporary staffing of healthcare professionals to facilities across the states of Wyoming and Montana.
WZEs principal executive offices consist of approximately 3,100 square feet of office space located at 5001 Baum Boulevard, Suite 770, Pittsburgh, Pennsylvania 15213. Our telephone number is (412) 621-0902. We also maintain offices in Casper, Wyoming and Billings, Montana.
Interim Healthcare of Wyoming, Inc.
The registrant, Interim, is a Wyoming corporation located at 1010 East First Street -- Suite A, Casper, Wyoming 82601 (Telephone: 307-266-1152). Interim is a subsidiary of WZE, and will be spun-off as a separate entity as discussed elsewhere in this Prospectus. Based in Casper, Wyoming and Billings, Montana, Interim has been serving its community for 18 years and is part of the fast growing home health segment of the healthcare industry, providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 home health agencies that comprise the Interim Health Care network, the largest home healthcare franchise in the United States. Interim is a franchisee of Interim Health Care.
The Healthcare Opportunity
U.S. healthcare spending has grown rapidly in the latter half of the 20th century and continues to accelerate, from $28 billion in 1960 to more than $2.5 trillion in 2009, which accounted for 17% of the Gross Domestic Product (GDP), up from 5% in 1960. National healthcare spending is projected to increase by an average of 7% each year throughout the next decade, and will consume an expanding share of the U.S. economy, almost doubling to approximately $4.5 trillion or nearly 20% of GDP by 2019.
The delivery of healthcare is funded through a variety of private payers and public programs. Privately funded healthcare includes private health insurance companies, employers that self-fund their employee medical benefits under ERISA, patients out-of-pocket costs and philanthropy. Public spending by federal and state governments on the Medicare, Medicaid and SCHIP programs accounts for more than one third of the countrys healthcare spending and almost three quarters of all public spending on health care. Total private, non-government funding accounts for just over 48% of the nations healthcare costs, while public, government funding accounts for the remainder. Government funding will increase at a faster rate as a result of the accelerated growth in Medicare as the baby boom generation began to reach age 65 and eligible for Medicare as of January 1, 2011, and as governments role in the entire healthcare system is enlarged.
Healthcare costs are expected to put severe pressure on government, employers, small businesses, retirees, the general public and the overall economy. As health care costs have climbed, so has the number of people who do not qualify for either public or private healthcare funding. Even during the period of overall economic growth, an estimated 45 million people of all ages remained without healthcare funding or uninsured. The unprecedented combination of rapidly rising health care costs and eroding public and private health insurance coverage raises concerns about the ability of families to obtain timely medical care and protect their finances from healthcare expenses.
Reform of the present healthcare and healthcare financing systems has assumed top priority on the domestic policy agenda. The House of Representatives passed its comprehensive health insurance reform legislation on November 7, 2009 by a two vote margin. On March 23, 2010, President Obama signed healthcare reform into law. A Kaiser Family Foundation survey released in March 2011 showed 52 percent of those surveyed still dont think they have enough information to understand how the law affects them. Both the intended and unintended consequences of reform will create opportunities for the development and growth of Interims business model.
The cost, quality and availability of healthcare in the U.S. are all under criticism due to the U.S. national averages not comparing favorably to other developed nations, according to studies conducted by the World Health Organization. While the average cost of healthcare in the U.S. can be up to 100% greater than in some other countries, there are also significant regional cost variations within the U.S. The best example is Medicares average per member per month costs by county for 2009, which range from $740 to $1,365, a greater than 80% difference.
Interim HealthCare is the nation's oldest leading home care and medical staffing company. Founded in 1966, there are more than 300 independently owned franchise locations nationwide. Interim HealthCare's independent franchisees employ more than 75,000 health care workers and provide nurses, therapists, aides and other health care personnel to approximately 50,000 people each day. Based in Casper, Wyoming and Billings, Montana, Interim Health Care of Wyoming (Interim) is an independent franchisee of Interim HealthCare that has been serving its community for 18 years and is part of the fast growing home health segment of the healthcare industry, providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 independent home health agencies that comprise the Interim HealthCare network.
Home Care Nursing
Through trained health care professionals, Interim provides a broad array of home care services including senior care and pediatric nursing; IV therapy; physical, occupational and speech therapy. Employing a home health care professional is an important decision, and one in which most people have little training or practice. Interim HealthCare is a name that is trusted by physicians and patients. Interim offices deliver appropriate high quality home care and treat each patient with genuine, compassion, kindness and respect. With a network more than 300 offices nationwide, Interim HealthCare franchisees provide health care professionals at all skill levels, including registered nurses, therapists, LVN's, LPN's and home health aides. From the tiniest pediatric patients to the oldest seniors, the professionals employed by franchisees are sensitive to the needs of both patients and their families.
Interim's Hospice and Palliative Care Program is a compassionate, patient-centered approach to medical care and support for people at end-of-life and their families. It is based on a philosophy of improving the quality of life when quantity of time is limited. Interim's Hospice offices provide physical, emotional and spiritual support to patients and those who love and care for them. Interim HealthCare Hospices believe that each person has the right to die pain-free and with dignity - and that loved ones deserve the necessary support to allow them to do so.
Hospice Care was created to support patients who are facing a terminally ill condition, as well as support for their families or caregivers. Although Hospice Care has been available for over 30 years, many patients don't learn about this compassionate model of care until the end days of a terminally ill condition.
The nation's Hospice programs served more than 1.4 million patients last year. Yet for every person who received Hospice Care, it is estimated that another individual who would have benefited went without this compassionate care at the end of his or her life.
Hospice is not a place, but a special kind of palliative care focusing on relief of pain, symptom control, spiritual and emotional support. The majority of Hospice Care takes place in the home, where the person can be surrounded by family and familiar settings. An escalated level of Hospice Care is available to provide more intensive medical services in a hospital, nursing home or a special Hospice House.
Hospice is not about giving up, but instead focuses on quality of life - making the wishes of the patient and family caregivers a priority.
Interim Healthcare's network of franchise health care offices provide nurses, allied health professionals, therapists, occupational health services and vendor management to hospitals, prisons, schools, corporations and other health care facilities.
Today, the challenges of supplemental staffing have become much more complex. Facilities have a growing need for qualified health care staff and employees are looking for more control with their careers. Interim HealthCare Staffing has become a leader in the development of a new health care supplemental workforce. Interim Healthcares
success is based on its ability to recruit the best health care professionals and the responsiveness of its local managers and owners.
With its network of more than 300 franchise and branch offices, Interim Healthcare provide nurses, allied health professionals, therapists and physicians, occupational health services and vendor management from coast to coast. Interim is a franchisee of Interim HealthCare and is a part of this network.
Senior Home Care
Interim Healthcare franchises offer senior care services that provide an enriched personalized quality of life as well as superior non-medical care and companionship for the elderly. Home Care Professionals include Homemakers, Companions and Home Care Aides who understand special elder care needs and take a personal interest in helping seniors lead enriched lives that continue to expand with meaning and purpose.
Interims Growth Strategy
Following the completion of the spin-off, Interim plans to grow the company through aggressive, opportunistic acquisitions of other similar and related businesses. Management believes that there are several market and economical conditions that make this strategy timely and with substantial potential upside, including: 1) Limited access to capital/credit for acquisitions under $10 million; 2) Uncertainty in the industry due to recent passage of healthcare legislation which has the potential to affect profit margins in the home healthcare market; 3) An overhang of home healthcare agencies for sale due to limited demand during the recession; 4) A drop in acquisition prices due to lowered EBITDA over the past three years.
As a result, Management believes there is substantial opportunity to acquire profitable, successful home healthcare and related businesses at better than average prices. Additionally, due to the extended recession in the U.S. Management also believes that Interim will be able to use its stock as partial payment for the first several acquisitions until cash flow has grown to the level where all cash acquisitions can be made.
Interim intends to operate a centralized, scalable administrative operation at its Pittsburgh, Pennsylvania headquarters to take advantage of operational efficiencies and facilitate billing and compliance efforts.
However, Interim is committed to designing and operating plans tailored for each of its local service areas and to working closely with individual agencies, nurses, nurse aids and other health care providers that serve them. In that context, Interim intends to retain management and staff members in each of its local service areas to conduct key service function.
Interim believes that centralized administrative functions paired with a community focus in functions where it matters most, will allow it to better understand and respond to our customers needs and to better control medical expenses, which will give Interim a critical service advantage over larger competitors who operate from remote locations.
PROJECTS AND BUSINESS ACTIVITIES AS SUGGESTED HEREIN ARE INHERENTLY RISKY, AND THERE CAN BE NO ASSURANCE THAT THESE RISKS CAN BE MITIGATED TO THE EXTENT THAT LOSSES WILL NOT OCCUR, AND THERE CAN BE NO ASSURANCE THAT INTERIM WILL BE SUCCESSFUL IN THESE ENDEAVORS.
As of April 30, 2012, Interim had one full-time executive employee who works out of WZEs Pittsburgh, Pennsylvania headquarters. Additionally, Interim had 30 full time employees and 95 part-time employees. None of
such employees are represented by employee union(s). Interim believes its relations with all of its employees are good.
Interim has two leased offices located at 1010 East First Street -- Suite A, Casper, Wyoming 82601 and 3316 2nd Avenue North, Billings Montana, 59101. The Casper office is a lease of 5,300 sq. ft. office space at a cost of $4,750 per month, including utilities. The Billings space is a lease of 2,000 sq. ft at a cost of $1,406 per month. The office locations provide convenient access to the communities in which they serve and are situated within commuting distance of qualified, experienced applicants for employment.
There has not been any material civil, administrative or criminal proceedings concluded, pending or on appeal against Interim, WZE or their respective affiliates and principals.
Directors and Executive Officers.
The following table reflects the names, ages and positions of Interims executive officers and directors.
Compensation to outside board members will be at $1,000 per month, plus travel and incidental expenses. There will be no compensation to board members employed by Interim or any of its subsidiaries and affiliates.
The following table summarizes certain information with respect to the beneficial ownership of Interims shares, immediately after the spin-off:
The following table sets forth certain financial data for Interim. The selected financial data should be read in conjunction with Interims Managements Discussion and Analysis of Financial Condition and Results of Operations and the financial statements of Interim and notes thereto. The selected financial data for the periods ended December 31, 2011, 2010 and 2009 have been derived from Interims audited financial statements. (See Appendix F).