DLH Holdings Corp. – ‘424B1’ on 7/5/00

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Prospectus   —   Rule 424(b)(1)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Teamstaff, Inc.                                       23     85K 

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                                                Filed Pursuant to Rule 424(b)(1)
                                     File Number 333-38356

P R O S P E C T U S                                                             

2,570,098 Shares of Common Stock

 TEAMSTAFF, INC.

       We are registering for resale 2,441,527 shares of common stock, $.001 par
value of TeamStaff, Inc., which shares are presently issued and outstanding and 
held by certain of our shareholders and an additional 128,571 shares of common  
stock which we will issue upon the exercise of outstanding common stock purchase
warrants held by the holders of outstanding warrants.                           

       Our Common Stock is traded in the over-the-counter market and is included
in the SmallCap Market of the Nasdaq Stock Market under the symbol "TSTF". On   
June 19, 2000, the closing high and low prices for the Common Stock as reported 
by Nasdaq were $4.00 and $3.8125, respectively.                                 

 We will not receive any proceeds from the sale of the shares by the
selling security holders.                                                       

       The shares may be sold from time to time by the selling security holders,
or by their transferees. No underwriting arrangements have been entered into by 
the selling security holders. The distribution of the shares by the selling     
security holders may be effected in one or more transactions that may take place
on the over the counter market, including ordinary brokers transactions,        
privately negotiated transactions or through sales to one or more dealers for   
resale of the shares as principals, at market prices prevailing at the time of  
sale, at prices related to such prevailing market prices or at negotiated       
prices. Usual and customary or specifically negotiated brokerage fees or        
commissions may be paid by the selling security holders in connection with such 
sales. The selling security holders and intermediaries through whom such shares 
are sold may be deemed underwriters within the meaning of the Act, with respect 
to the shares offered by them.                                                  

  PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 11 TO READ ABOUT CERTAIN
FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF COMMON STOCK.               

      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 date of this Prospectus is June 30, 2000  

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 TABLE OF CONTENTS

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AVAILABLE INFORMATION..........................................................................1  

INCORPORATION BY REFERENCE.....................................................................1  

PROSPECTUS SUMMARY.............................................................................3  

THE OFFERING...................................................................................8  

SELECTED FINANCIAL DATA........................................................................9  

RISK FACTORS..................................................................................10  

SELLING SECURITY HOLDERS......................................................................16  

PLAN OF DISTRIBUTION..........................................................................18  

REPORTS TO SHAREHOLDERS.......................................................................19  

LEGAL MATTERS AND EXPERTS.....................................................................19  

ADDITIONAL INFORMATION........................................................................19  

FORWARD LOOKING STATEMENTS ...................................................................20  

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 AVAILABLE INFORMATION

       Our company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in       
accordance therewith, files reports and other information with the Securities   
and Exchange Commission (the "Commission"). Reports, proxy and information      
statements and other information filed by our company with the Commission       
pursuant to the informational requirements of the Exchange Act may be inspected 
and copied at the public reference facilities maintained by the Commission at   
450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional    
Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th 
Floor, New York, New York 10048; and Chicago Regional Office, 500 West Madison  
Street, Room 1400, Chicago, Illinois 60661. Copies of such material may be      
obtained from the public reference section of the Commission at 450 Fifth       
Street, N.W., Washington, D.C. 20549, at prescribed rates. You may obtain       
information on the operation of the Public Reference Room by calling the SEC at 
1-800-SEC-0330. The SEC maintain an Internet site, http://www.sec.gov, that     
contains reports, proxy and information statements and other information that we
file electronically with the SEC.                                               

 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, heretofore filed by TeamStaff with the   
Commission pursuant to the Exchange Act, are hereby incorporated by reference,  
except as superseded or modified herein:                                        

       1.     Our Annual Report on Form 10-K for the fiscal year ended September
        30, 1999, including information specifically incorporated by
             reference into our Form 10-K from our definitive Proxy Statement.

    2.     A description of our common stock contained in our registration
statement on Form 8-A filed April 27, 1990.         

3.     Our Form 8-K filed on April 20, 2000.                      

4.     Our Form 10-Q for the quarter ended December 31, 1999.     

5.     Our Form 10-Q for the quarter ended March 31, 2000.        

6.     Our form 8-K filed on June 15, 2000.                       

       Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination  
of this offering shall be deemed to be incorporated by reference in this        
Prospectus and shall be part hereof from the date of filing of such document.   

All documents filed by the registrant after the date of filing the
initial registration statement on Form S-3 of which this prospectus forms a part
and prior to the effectiveness of such registration statement pursuant to       
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange                   

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Act of 1934 shall be deemed to be incorporated by reference into this prospectus
and to be part hereof from the date of filing of such documents.                

  We will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the written or oral request of any such person, a 
copy of any document described above (other than exhibits). Requests for such   
copies should be directed to TeamStaff, Inc., 300 Atrium Drive, Somerset, New   
Jersey 08873, telephone (732) 748-1700, attention Donald Kelly.                 

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PROSPECTUS SUMMARY

    The following summary is intended to set forth certain pertinent facts
and highlights from material contained in the our company's annual report on    
Form 10-K for the fiscal year ended September 30, 1999 (the "Form 10-K") and our
quarterly reports on Form 10-Q for the quarters ended December 31, 1999 and     
March 31, 2000 (the "Forms 10-Q"), incorporated by reference into this          
prospectus.                                                                     

 THE COMPANY

TeamStaff, Inc., formerly Digital Solutions, Inc., a New Jersey   
corporation, was founded in 1969 as a payroll service company and has evolved   
into a leading provider of human resource management services to a wide variety 
of industries in 50 states. TeamStaff's wholly-owned subsidiaries include       
TeamStaff Solutions, Inc., DSI Staff ConnXions-Northeast, DSI Staff             
ConnXions-Southwest, TeamStaff Rx, Inc., TeamStaff I, Inc., TeamStaff II, Inc., 
TeamStaff III, Inc., TeamStaff IV, Inc., TeamStaff V, Inc., TeamStaff VI, Inc., 
TeamStaff Insurance, Inc., TeamStaff VII, Inc., TeamStaff VIII, Inc., and       
TeamStaff IX, Inc.                                                              

      Effective January 25, 1999, we acquired the ten entities operating under
the trade name, the TeamStaff Companies. In conjunction with the acquisition, we
changed our name from Digital Solutions, Inc., to TeamStaff, Inc. on February   
10, 1999. In connection with the acquisition, we issued 8,233,334 shares of     
common stock, which shares are being registered in this prospectus.             

  On April 8, 2000, pursuant to a definitive Asset Purchase Agreement,
dated April 7, 2000, we acquired to acquire substantially all of the assets of  
the professional employer organization business of Outsource International,     
Inc., which had operated under the tradename Synadyne. The assets were acquired 
through one of our wholly-owned subsidiaries, of which Outsource had indirectly 
held a 20% ownership interest. We subsequently purchased the 20% ownership      
interest. We also acquired the tradename Synadyne as part of the transaction, as
well as all of the customer contracts of Synadyne's PEO business.               

  We currently provide three types of services related to the employee
leasing, temporary staffing and payroll service businesses: (1) professional    
employer organization ("PEO") services, such as payroll processing, personnel   
and administration, benefits administration, workers' compensation              
administration and tax filing; (2) employer administrative services, such as    
payroll processing and tax filing; and (3) contract staffing, or the placement  
of temporary and permanent employees. We currently furnish PEO employees,       
payroll and contract staffing services with over 20,000 work site employees,    
1,500 staffing employees and processing for approximately 30,000 payroll service
employees and believes that it currently ranks, in terms of revenues and        
worksite employees, as one of the top 10 PEOs in the United States. Our contract
staffing business mainly places temporary help in hospitals and clinics         
throughout the United States through its Clearwater, Florida and Houston, Texas 
offices. We have six regional offices located in Somerset, New Jersey; Houston  
and El Paso, Texas; and Tampa, Delray Beach and Clearwater, Florida and         

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nine sales service centers in New York, New York; El Paso and Houston, Texas;   
Tampa, Orlando, Delray Beach and Clearwater, Florida; Atlanta, Georgia; and     
Somerset, New Jersey.                                                           

Essentially, we provide services that function as the personnel   
department for small to medium sized companies. We believe that by offering     
services that relieve small and medium size businesses of the ever increasing   
administrative burden of employee related record keeping, payroll processing,   
benefits administration, employment of temporary and permanent specialized      
employees and other human resource functions, we have positioned our company to 
take advantage of a major growth opportunity during this decade and the next.   

   Recognizing the desire by many small businesses to be relieved of the
human resource administrative functions, we have formulated a strategy of       
emphasizing PEO and "outsourcing" services. In PEO, a service provider becomes a
co-employer of the client company's employees and assigns these employees to the
client to perform their intended functions at the worksite.                     

       Management has determined to emphasize our company's future growth on the
PEO and outsourcing industry. Our expansion program will focus on internal      
growth through the cross marketing of our PEO services to our entire client base
and the acquisition of compatible businesses strategically situated in new areas
or with a client base serviceable from existing facilities. As part of our      
effort to expand our PEO business, management has expanded the services of      
TeamStaff Rx, Inc., our company's medical contract staffing subsidiary, to      
include PEO, outsourcing and facilities management. While we continue to sell   
stand-alone employer services, such as payroll and tax filing, we also will     
emphasize the PEO component of our service offerings with a goal of becoming the
leading provider of PEO services in the United States. A major component of our 
existing growth strategy is the acquisition of well-situated, independent PEO   
companies whose business can be integrated into our company's operations.       
However, there can be no assurance any such acquisition will be consummated.    

    Our company was organized under the laws of the State of New Jersey on
November 25, 1969 and maintains its executive offices at 300 Atrium Drive,      
Somerset, New Jersey 08873 where our telephone number is (732) 748-1700.        

OUR SERVICES                                                                    

Professional Employer Organization (PEO)                                        

   Our company's core business, and the area management will continue to
emphasize, is our PEO services. When a client utilizes our services, the client 
administratively transfers all or some of its employees to us and we in turn    
provide them back to the client. Our company thereby becomes a co-employer and  
is responsible for all human resource functions, including payroll, benefits    
administration, tax reporting and personnel record keeping. The client still    
manages the employees and determines salary and duties in the same fashion as   
any employer. The client is, however, relieved of reporting and tax filing      
requirements and other administrative tasks.                                    

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Moreover, because of economies of scale, our company is able to negotiate       
favorable terms on workers' compensation insurance, health benefits, retirement 
programs, and other valuable services. The client company benefits because it   
can then offer its employees the same or similar benefits as larger companies,  
enabling it to successfully compete in recruiting highly qualified personnel, as
well as build the morale and loyalty of its staff.                              

As a PEO service provider, we can offer the following benefits to 
employees:                                                                      

  COMPREHENSIVE MAJOR MEDICAL PLANS - Management believes that medical
insurance costs have forced small employers to reduce coverage provided to its  
employees and to increase employee contributions. We are able to leverage our   
large employee base and offer the employees assigned to their clients a variety 
of health coverage plans from traditional indemnity plans to Health Maintenance 
Organizations (HMO), Preferred Provider Organizations (PPO), or a Point of      
Service Plan (POS).                                                             

       DENTAL AND VISION COVERAGE - These types of benefits are generally beyond
the reach of most small groups. As a result of economies of scale available, a  
client of our company can obtain these benefits for the assigned employees.     

LIFE INSURANCE -- Affordable basic coverage is available.         

   SECTION 125 PREMIUM CONVERSION PLAN -- Employees can pay for benefits
with pre-tax earnings, reduce their taxable income and FICA payments, and       
increase their take-home pay.                                                   

      401(K) RETIREMENT PLANS -- Management believes that most small employers
do not provide any significant retirement benefits due to the administrative and
regulatory requirements associated with the establishment and maintenance of    
retirement plans. The company enables small business owners to offer the        
assigned employees retirement programs comparable to those of major             
corporations. Such plans can be used to increase morale, productivity and       
promote employee loyalty.                                                       

 CREDIT UNION - Our company provides an opportunity for employees to
borrow money at lower interest than offered at most banks.                      

    PAYROLL SERVICES -- Although ancillary to the PEO services, clients no
longer incur the expense of payroll processing either through in-house staff or 
outside service. Our company's PEO services include all payroll and payroll tax 
processing.                                                                     

UNEMPLOYMENT COMPENSATION COST CONTROL - Our company provides an  
unemployment compensation cost control program to aggressively manage           
unemployment claims.                                                            

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   HUMAN RESOURCES MANAGEMENT SERVICES - Our company can provide clients
with expertise in areas such as personnel policies and procedures, hiring and   
firing, training, compensation and performance evaluation.                      

 WORKERS' COMPENSATION PROGRAM - Our company has a national workers'
compensation policy which can provide our company with a significant advantage  
in marketing its services, particularly in jurisdictions where workers'         
compensation policies are difficult to obtain at reasonable costs. We also      
provide our clients where applicable with independent safety analyses and risk  
management services to reduce workers' injuries and claims.                     

     Relieved of personnel administrative tasks, the client is able to focus
on its core business. The client is also offered a broader benefits package for 
its assigned employees, a competitive rate in workers' compensation insurance,  
and savings in time and paperwork previously required in connection with        
personnel administration.                                                       

PAYROLL SERVICES                                                                

    We were established as a payroll service firm in 1969, and continue to
provide basic payroll services to our clients. Historically, the payroll        
division provided these services primarily to the construction industry and     
currently 70% of our company's approximately 750 payroll service clients are in 
the construction industry. Our company offers most, if not all, of what other   
payroll services provide, including the preparation of checks, government       
reports, W-2's (including magnetic tape filings), remote processing (via modem) 
directly to the clients offices, and certified payrolls.                        

    In addition, our company offers a wide array of tax reporting services
including timely deposit of taxes, impounding of tax payments, filing of        
returns, distribution of quarterly and year-end statements and responding to    
agency inquiries.                                                               

TEMPORARY STAFFING SERVICES                                                     

   We provide temporary staffing services through two subsidiaries which
have, in the aggregate, more than 30 years of experience in placing permanent   
and temporary employees with specialized skills and talents with regional,      
national and international employers. Temporary staffing enables clients to     
attain management and productivity goals by matching highly trained             
professionals and technical personnel to specific project requirements.         
TeamStaff focuses its temporary staffing services in two specific markets where 
it places people on a temporary long term assignment, or on a permanent basis:  
(1) radiologic technologist, diagnostic sonographers, cardiovascular            
technologists, radiation therapist and other medical professionals with         
hospitals, clinics and therapy centers throughout the 50 states and (2)         
technical employees such as engineers, information systems specialists and      
project managers primarily with Fortune 100 companies for specific projects.    
Clients whose staffing requirements vary depending on the level of current      

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   We provide temporary staffing services through two subsidiaries which
have, in the aggregate, more than 30 years of experience in placing permanent   
and temporary employees with specialized skills and talents with regional,      
national and international employers. Temporary staffing enables clients to     
attain management and productivity goals by matching highly trained             
professionals and technical personnel to specific project requirements.         
TeamStaff focuses its temporary staffing services in two specific markets where 
it places people on a temporary long term assignment, or on a permanent basis:  
(1) radiologic technologist, diagnostic sonographers, cardiovascular            
technologists, radiation therapist and other medical professionals with         
hospitals, clinics and therapy centers throughout the 50 states and (2)         
technical employees such as engineers, information systems specialists and      
project managers primarily with Fortune 100 companies for specific projects.    
Clients whose staffing requirements vary depending on the level of current      

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projects or business are able to secure the services of highly qualified        
individuals on an interim basis.                                                

Our company's temporary staffing services provide clients with the
ability to "rightsize"; that is, expand or reduce its workforce in response to  
changing business conditions. Management believes that these services provide   
numerous benefits to the client, such as saving the costs of salary and benefits
of a permanent employee whose services are not needed throughout the year. The  
client also avoids the costs, uncertainty and delays associated with searches   
for qualified interim employees. Our company also provides insurance bonding    
where necessary and assumes all responsibility for payroll tax filing and       
reporting functions, thereby saving the client administrative responsibility for
all payroll, workers' compensation, unemployment and medical benefits.          

  Management believes that its temporary staffing services provides an
employer with an increased pool of qualified applicants, since temporary        
staffing employees have access to a wide array of benefits such as health and   
life insurance, Section 125 premium conversion plans, and 401(k) retirement     
plans. These benefits provide interim employees with the motivation of full-time
workers without additional benefit costs to the client. A client is also able to
temporarily rehire a retired employee for short-term or specialized projects    
without jeopardizing their pension plan. We believe that we have attained the   
position of being number one or two in the terms of gross revenues for firms    
specializing in the placement of temporary medical imaging personnel.           

THE SYNADYNE ACQUISITION                                                        

   Under the terms of the Asset Purchase Agreement, we paid an aggregate
purchase price of $3,500,000. The agreement also provides for an additional     
potential payment in one year of up to $1,250,000 provided that the former      
clients of Outsource have at least 9,500 worksite employees as of March 31,     
2001. In the event there are less than 9,500 employees, the amount of the       
earnout will be reduced by a pre-determined formula.                            

  Pursuant to the terms of the Asset Purchase Agreement, Outsource has
agreed to indemnify us up to the purchase price for claims for breaches of      
representations and warranties, subject an initial deductible of $50,000.       

In connection with the acquisition, we received an increase in our
present lending facility with FINOVA Capital Corporation in order to fund the   
acquisition and necessary working capital. The facility is comprised of a three 
year term loan in the principal amount of $4,000,000, with a five year          
amortization and a balloon payment at the end of three years and an increase in 
our revolving line of credit from $2.5 million to $3.5 million. The term loan   
bears an interest rate of prime plus 3 percent and the revolving loan bears an  
interest rate of prime plus 1 percent. The term loan may be prepaid at any time 
without penalty. Annual success fees of $500,000 are earned as of each          
anniversary date of the loan commencing as of April 2000.                       

RECENT EVENTS                                                                   

On May 31, 2000, at a special meeting of our shareholders, the    
shareholders reaffirmed their previous approval of a reverse split of our common
stock. On April 14, 2000, our Board of Directors set and approved a reverse     
split at a level of one (1) new share for each existing 3.5 shares of TeamStaff 
stock. The stock split became effective June 2, 2000, and our common stock will 
trade under the symbol TSTFD for approximately 20 days, after which it will     
return to TSTF. All references to numbers of shares being registered in this    
prospectus have been adjusted to reflect the reverse stock split, unless        
otherwise stated.                                                               

       As previously disclosed in our reports filed with the SEC, in August 1998
a judgment was assessed against us for $315,000, plus interest. The name of the 
suit is Farias v. Thomson Consumer Electronics & DSI Staff Connxions--Southwest,
Inc., (Case No. 96-3036, D.C. El Paso County, Texas). We appealed the judgment  
to the Appellate Court and were notified on May 31, 2000 that we lost our       
appeal. We are currently reviewing our options, including a further appeal to   
the Texas Supreme Court. We do not anticipate that this charge will have a      
significant impact on our earnings.                                             

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THE OFFERING

                                                        [Enlarge/Download Table]


                                                                                                                     
Common Stock outstanding prior to                                                                                    
Offering(1).................................     7,980,718                                                           

Shares being offered for                                                                                             
sale by selling security holders.........        2,441,527                                                           

Shares underlying warrants being                                                                                     
offered for sale by selling                                                                                          
security holders.............................     128,571                                                            

Common Stock outstanding after the                                                                                   
Offering ......................................  8,109,289                                                           

Risk Factors .................................  This offering involves a high degree of risk. See "Risk Factors."    

Use of Proceeds(2)..........................    All of the proceeds of this offering will be paid to the respective  
                                                selling security holders and none of the proceeds will be received by
                                                our company. We anticipate that proceeds received from exercise of   
                                                any warrants will be used for working capital purposes.  See "Use of 
                                                Proceeds."                                                           

Nasdaq SmallCap                                                                                                      
Market Symbol..........................         TSTF                                                                 


----------------                                                                
(1) As of June 13, 2000. Does not include:                                      

     -      Options to purchase 1,714,285 Shares reserved for issuance under
            our 2000 Employee Stock Option Plan of which none are issued and
        outstanding and options to purchase 44,542 Shares issued and
        outstanding under our 1990 Employee Stock Option Plan, which
expired in April, 2000.                             

    -      Options to purchase 181,428 Shares issued and outstanding under
          our 1990 Senior Management Plan, which expired in April, 2000.

   -      Options to purchase 30,714 Shares issued and outstanding under
         our 1990 Non-Executive Director Plan, which expired in April,
          2000. At our most recent annual meeting on April 13, 2000, our
       stockholders approved our 2000 Non-Executive Director Stock
        Option Plan, pursuant to which no options have been granted.

  -      Up to approximately 228,536 Shares reserved for issuance upon
exercise of outstanding warrants.                   

(2) We will receive approximately $578,998.33 in proceeds if all of the warrants
being registered in this prospectus are exercised.                              

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SELECTED FINANCIAL DATA   
(amounts in thousands, except per share data)   

The following table sets forth selected consolidated financial data of our      
historical operations for each of the five years in the period ended September  
30, 1999 and for each of the six month periods ended March 31, 1999 and 2000,   
respectively. The selected financial data related to (Loss) Earnings per share  
and weighted average shares outstanding have been restated for all periods      
presented to consider the 3.5 for 1 reverse stock split that was effective June 
2, 2000.                                                                        

                                                        [Enlarge/Download Table]

                                           Fiscal Year Ended September 30,                       Six Months Ended March 31,
                        -----------------------------------------------------------------------  --------------------------
                          1995           1996             1997            1998          1999(2)       1999          2000   
                                                                                                                           
Revenues                $ 73,821      $ 100,927        $ 122,559        $139,435       $244,830      $94,947      $161,824 

Direct Expenses           68,530         92,490          113,894         129,747        228,294       88,343       152,443 

Gross Profit               5,291          8,437            8,665           9,688         16,536        6,604         9,381 

Selling, General &                                                                                                         
Administrative                                                                                                             
Expenses (includes                                                                                                         
Depreciation                                                                                                               
and Amortization)          7,547          8,801           11,316           8,050         13,305        5,489         7,869 

(Loss) Income From        (2,256)          (364)          (2,651)          1,638          3,231        1,115         1,512 
Operations                                                                                                                 

Net (Loss) Income       $ (3,316)     $    (597)       $  (2,832)       $  2,703       $  1,776      $   862      $    626 

(Loss) Earnings per                                                                                                        
 share (1)                                                                                                                 

   Basic                $  (0.85)     $   (0.12)       $   (0.52)       $   0.49       $   0.25      $  0.14       $  0.08 
   Diluted              $  (0.85)     $   (0.12)       $   (0.52)       $   0.49       $   0.25      $  0.14       $  0.08 

Weighted average                                                                                                           
shares outstanding (1)                                                                                                     
   Basic                   3,884          4,812            5,449           5,506          7,128        6,274         7,958 
   Diluted                 3,884          4,812            5,449           5,544          7,145        6,319         8,019 

                                                        [Enlarge/Download Table]

                                               As of September 30,                            As of March 31,   
                      -------------------------------------------------------------------  ---------------------
BALANCE SHEET           1995            1996          1997           1998         1999(2)    1999         2000  
DATA:                                                                                                           
                                                                                                                
Assets                $ 13,816        $14,800      $ 14,163         $16,648       $36,382   $33,288      $38,786

Liabilities             10,967          7,632         9,291           8,774        19,417    17,199       20,975

Long-Term Debt             175            100            89           2,981         4,502     4,772        4,026

Working Capital                                                                                                 
(Deficiency)            (4,771)           286        (1,401)          3,319         2,968       877        4,051

Shareholders' Equity  $  2,849        $ 7,168      $  4,872         $ 7,874       $16,965   $16,089      $17,811

----------------------------                                                    
1.       In accordance with Statement of Accounting Standards 128, basic and    
      diluted earnings (loss) per shares have replaced primary and diluted
earnings (loss) per share.                                    

2.       On January 25, 1999, we acquired the TeamStaff Companies through the   
     issuance of 2,352 shares of TeamStaff, Inc. common stock and $3,200
      in cash in exchange for all capital stock of the TeamStaff Companies
and for the repayment of debt.                                

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RISK FACTORS

      An investment in the securities offered hereby involves a high degree of
risk. The following factors, in addition to those discussed elsewhere, should be
considered carefully in evaluating us and our business. An investment in the    
securities is suitable only for those investors who can bear the risk of loss of
their entire investment.                                                        

      WE HAVE GRANTED TO OUR LENDER A SECURITY INTEREST IN OUR ASSETS AND UPON
A DEFAULT THE LENDER MAY FORECLOSE ON OUR ASSETS.                               

     We have granted security interests with respect to substantially all of
our assets to secure certain of our indebtedness. In the event we default on our
secured obligations, the secured creditor could declare our indebtedness to be  
immediately due and payable and foreclose on the assets securing the defaulted  
indebtedness. Moreover, to the extent that all of our assets continue to be     
pledged to secure outstanding indebtedness, such assets will not be available to
secure additional indebtedness. Our loan agreement with our institutional lender
restricts our ability to incur additional indebtedness and may limit our ability
to obtain additional financing on terms favorable to us or at all.              

     WE MAY ACQUIRE ADDITIONAL COMPANIES WHICH MAY RESULT IN ADVERSE EFFECTS
ON OUR EARNINGS.                                                                

       We may at times become involved in discussions with potential acquisition
candidates. Any acquisition that we may consummate may have an adverse effect on
our liquidity and earnings and may not be profitable to us. In the event that we
consummate an acquisition or obtain additional capital through the sale of debt 
or equity to finance an acquisition, current shareholders may experience        
dilution in their shareholder's equity.                                         

SIGNIFICANT GROWTH THROUGH ACQUISITIONS MAY ADVERSELY AFFECT OUR  
MANAGEMENT AND OPERATING SYSTEMS.                                               

      We completed two significant acquisition during the past eighteen months
and intend to continue to pursue a strategy of acquiring compatible businesses  
in the future. Our growth is making significant demands on our management,      
operations and resources, including working capital. If we are not able to      
effectively manage our growth, our business and operations will be materially   
harmed. To manage growth effectively, we will be required to continue to improve
our operational, financial and managerial systems, procedures and controls, hire
and train new employees while managing our current operations and employees.    
Historically, our cash flow from operations has been insufficient to expand     
operations and sufficient capital may not be available in the future.           

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    OUR PAYROLL BUSINESS MAY BE ADVERSELY AFFECTED IF THERE IS AN ECONOMIC
DOWNTURN IN THE CONSTRUCTION BUSINESS.                                          

   Although we have expanded our services to a number of industries, our
payroll service business continues to rely to a material extent on the          
construction industry. During the last fiscal year, construction related        
business accounted for approximately 70% of our total gross margin. Accordingly,
if there is a slowdown in construction activities, it may affect our revenues   
and profitability. Management believes our reliance on the construction business
will continue to decline as our customer base expands and becomes more          
diversified.                                                                    

     UNFAVORABLE INTERPRETATIONS OF GOVERNMENT LAWS MAY HARM OUR OPERATIONS.

Our operations are affected by many federal, state and local laws 
relating to labor, tax, insurance and employment matters and the provision of   
managed care services. Many of the laws related to the employment relationship  
were enacted before the development of alternative employment arrangements, such
as those that we provide, and do not specifically address the obligations and   
responsibilities of non-traditional employers. The unfavorable resolution of    
unsettled interpretive issues concerning our relationship could have a material 
adverse effect on our results of operations, financial condition and liquidity. 
Uncertainties arising under the Internal Revenue Code of 1986 include, but are  
not limited to, the qualified tax status and favorable tax status of certain    
benefit plans we and other alternative employers provide. In addition, new laws 
and regulations may be enacted with respect to our activities which may also    
have a material adverse effect on the Company's business, financial condition,  
results of operations and liquidity.                                            

     OUR FINANCIAL CONDITION MAY BE AFFECTED BY INCREASES IN HEALTH CARE AND
WORKERS' COMPENSATION INSURANCE COSTS.                                          

       Health care costs, insurance premiums and workers' compensation insurance
coverage comprise a significant part of our operating expenses. Accordingly, we 
use managed care procedures in an attempt to control these costs. Changes in    
health care and workers' compensation laws or regulations may result in an      
increase in our costs and we may not be able to immediately incorporate such    
increases into the fees charged to clients because of its existing contractual  
arrangements with clients. As a result, any such increases in these costs could 
have a material adverse effect on our financial condition, results of operations
and liquidity.                                                                  

      WE MAY NOT BE ABLE TO OBTAIN ALL OF THE LICENSES AND CERTIFICATIONS THAT
WE NEED TO OPERATE.                                                             

       State and federal authorities extensively regulate the managed health
care industry and some of our arrangements relating to specialty managed care   
services or the maintenance or operation                                        

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of health care provider networks require us to satisfy operating, licensing or  
certification requirements. Any further expansion of the range of specialty     
managed care services that we offer is likely to require that we satisfy        
additional licensing and regulatory requirements. If we are unable to obtain or 
maintain all of the required licenses or certifications that we need, we could  
experience material adverse effects on our results of operations, financial     
condition and liquidity.                                                        

 HEALTH CARE OR WORKERS' COMPENSATION REFORM COULD IMPOSE UNEXPECTED
BURDENS ON OUR ABILITY TO CONDUCT OUR BUSINESS.                                 

      Regulation in the health care and workers' compensation fields continues
to evolve, and we cannot predict what additional government regulations         
affecting our business may be adopted in the future. Changes in any of these    
laws or regulations may adversely impact the demand for our services, require   
that we develop new or modified services to meet the demands of the marketplace,
or require that we modify the fees that we charge for our services. Any such    
changes may adversely impact our competitiveness and our financial condition.   

    IF WE LOSE OUR QUALIFIED STATUS FOR CERTAIN TAX PURPOSES, OUR BUSINESS
WOULD BE ADVERSELY AFFECTED.                                                    

     Several years ago, the Internal Revenue Service established an Employee
Leasing Market Segment Group for the purpose of identifying specific compliance 
issues prevalent in certain segments of the PEO industry. One issue that arose  
in the course of these audits is whether PEOs should be considered the employers
of worksite employees under Internal Revenue Code provisions applicable to      
employee benefit plans, which would permit PEOs to offer benefit plans that     
qualify for favorable tax treatment to worksite employees. If the IRS concludes 
that PEOs are not employers of worksite employees for purposes of the Internal  
Revenue Code, we would need to respond to the following adverse implications:   

     --     the tax qualified status of our 401(k) plan could be revoked and
 our cafeteria plan may lose its favorable tax status;

       --     worksite employees would not be able to continue to participate in
such plans or in other employee benefit plans;      

    --     we may no longer be able to assume the client company's federal
employment tax withholding obligations;             

     --     if such a conclusion were applied retroactively, then employees'
         vested account balances would become taxable immediately, the
            Company would lose its tax deduction to the extent contributions
            were not vested, the plan trust would become a taxable trust and
     penalties and additional taxes for prior periods could be
assessed.                                           

      In such a circumstance, we would face the risk of client dissatisfaction
as well as potential litigation, and our financial condition, results of        
operations and liquidity could be materially adversely affected.                

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    WE MAY BE HELD LIABLE FOR THE ACTIONS OF OUR CLIENTS AND EMPLOYEES AND
THEREFORE INCUR UNFORESEEN LIABILITIES.                                         

     A number of legal issues with respect to the co-employment arrangements
among PEOs, their clients and worksite employees remain unresolved. These issues
include who bears the ultimate liability for violations of employment and       
discrimination laws. As a result of our status as a co-employer, we may be      
liable for violations of these or other laws despite contractual protections.   
While our client service agreements generally provide that the client is to     
indemnify us for any liability caused by the client's failure to comply with its
contractual obligations and the requirements imposed by law, we may not be able 
to collect on such a contractual indemnification claim and may then be          
responsible for satisfying such liabilities. In addition, worksite employees may
be deemed to be our agents, which could make us liable for their actions.       

OUR STAFFING OF HEALTHCARE PROFESSIONALS EXPOSES US TO POTENTIAL  
MALPRACTICE LIABILITY.                                                          

Through our TeamStaff Rx subsidiary, we engage in the business of 
contract staffing of temporary and permanent healthcare professionals. The      
placement of such employees increases our potential liability for negligence and
professional malpractice of those employees. Although TeamStaff is covered by   
liability insurance which we deem reasonable under the circumstances, not all of
the potential liability we face will be fully covered by insurance. Any         
significant adverse claim which is not covered by insurance may have a material 
adverse effect on us.                                                           

WE MAY NOT BE FULLY COVERED BY THE INSURANCE WE PROCURE.          

      Although we carry liability insurance, the insurance we purchase may not
be sufficient to cover any judgments, settlements or costs relating to any      
present or future claims, suits or complaints. In addition, sufficient insurance
may not be available to us in the future on satisfactory terms or at all. If the
insurance we carry is not sufficient to cover any judgments, settlements or     
costs relating to any present or future claims, suits or complaints, our        
business, financial condition, results of operations and liquidity could be     
materially adversely affected.                                                  

OUR BUSINESS WILL SUFFER IF OUR SERVICES ARE NOT COMPETITIVE.     

Each of the payroll, temporary employee placement and the employee
leasing industries are characterized by vigorous competition. Since we compete  
with numerous entities that have greater resources than us in each of our       
business lines, our business will suffer if we are not competitive in with      
respect to each of the services we provide. We believe that our major           
competitors with respect to its payroll and accounting services are Automatic   
Data Processing, Inc., Ceridian Corp. and Paychex, Inc. and with respect to     
employee placement (including temporary placements and employee leasing), Butler
Arde, Tech Aid, Inc., Comp Health, Staff Leasing, Inc. and Administaff, Inc.    
These companies have greater financial and marketing                            

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resources than do we. We also compete with manual payroll systems and           
computerized payroll services provided by banks, and smaller independent        
companies.                                                                      

IF WE CANNOT OBTAIN SUFFICIENT LEVELS OF TEMPORARY EMPLOYEES, OUR 
BUSINESS MAY BE AFFECTED.                                                       

     Two of our subsidiaries, Team Solutions, and TeamStaff Rx are temporary
employment agencies which depend on a pool of qualified temporary employees     
willing to accept assignments for our clients. The business of these            
subsidiaries is materially dependent upon the continued availability of such    
qualified temporary personnel. Our inability to secure temporary personnel would
have a material adverse effect on our business.                                 

    SINCE WE HAVE NOT PAID DIVIDENDS ON OUR COMMON STOCK YOU CANNOT EXPECT
INCOME FROM AN INVESTMENT IN OUR COMMON STOCK.                                  

    We have not paid any dividends on our common stock since our inception
and do not contemplate or anticipate paying any dividends on our common stock in
the foreseeable future. We may not pay dividends on our common stock unless we  
have earnings or capital surplus and our lender prohibits us from paying        
dividends without its prior consent. Therefore, holders of our common stock may 
not receive any dividends on their investment in us. Earnings, if any, will be  
retained and used to finance the development and expansion of our business.     

       WE HAVE SOLD RESTRICTED SHARES OF COMMON STOCK WHICH MAY DILUTE OUR STOCK
PRICE WHEN THEY ARE SELLABLE UNDER RULE 144.                                    

      Of the 7,980,718 issued and outstanding shares of our common stock prior
to this offering, approximately 3,183,300 shares may be deemed "restricted      
shares" and, in the future, may be sold in compliance with Rule 144 under the   
Act. Possible or actual sales of our common stock by our present shareholders   
under Rule 144 may, in the future, have a depressing effect on the price of our 
common stock in the open market. Rule 144 provides that a person holding        
restricted securities which have been outstanding for a period of one year after
the later of the issuance by our company or sale by an affiliate of our company,
may sell in brokerage transactions an amount equal to 1% of our company's       
outstanding common stock every three months. A person who is a "non-affiliate"  
of our company and who has held restricted securities for over two years is not 
subject to the aforesaid volume limitations as long as the other conditions of  
the Rule are met. In addition, on a pre-reverse split basis, (1) we have        
previously registered approximately 6,700,000 shares on behalf of selling       
stockholders and (2) have outstanding 898,400 previously registered shares under
our stock option plans. The sale of these shares may have a depressive effect on
the market for our common stock.                                                

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       WE MAY ISSUE PREFERRED STOCK WITH RIGHTS SENIOR TO OUR COMMON STOCK WHICH
MAY ADVERSELY IMPACT THE VOTING AND OTHER RIGHTS OF THE HOLDERS OF OUR COMMON   
STOCK.                                                                          

       Our certificate of incorporation authorizes the issuance of "blank check"
preferred stock with such designations, rights and preferences as may be        
determined from time to time by our board of directors up to an aggregate of    
5,000,000 shares of preferred stock. Accordingly, our board of directors is     
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which would adversely affect the
voting power or other rights of the holders of our common stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances, as
a method of discouraging, delaying or preventing a change in control of our     
company, which could have the effect of discouraging bids for our company and   
thereby prevent stockholders from receiving the maximum value for their shares. 
Although we have no present intention to issue any shares of our preferred stock
in order to discourage or delay a change of control of our company, we may do so
in the future.                                                                  

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SELLING SECURITY HOLDERS

                                                        [Enlarge/Download Table]

                                                SHARES                              PERCENTAGE
                                                OWNED                     SHARES    OF SHARES 
                                                PRIOR TO     SHARES       OWNED     OWNED     
NAME AND ADDRESS OF                             OFFERING     OFFERED      AFTER     AFTER     
SECURITY HOLDER                                 (1)(2)                    OFFERING  OFFERING  
                                                                                              
Warren M. Cason, Sr. (11)                       634,473(3)   634,473(3)    -         --       

Kirk A. Scoggins (11)                           939,123(4)   939,123(4)    -         -        

Dorothy Cason (11)                               45,811(5)    45,811(5)    -         --       

Warren Cason, Jr., trustee,                     522,825(6)   522,825(6)    _         _        
Dorothy C. Cason 1997                                                                         
Three Year Grantor Retained Annuity Trust (11)                                                

Melissa C. Scoggins, trustee,                   206,149(7)   206,149(7)    _         _        
Kirk A. Scoggins 1997                                                                         
Three Year Grantor Retained Annuity Trust (11)                                                

Raymond James & Assoc., Inc.                     96,289(8)    96,289(8)    -         -        

Donald & Co. Securities, Inc.                    85,714(9)    85,714(9)    -         -        

SR Capital Partners, LLC                         35,714(10)   35,714(10)   -         -        

------------------------                                                        

1.     Includes all shares as to which the individual has sole or shared voting 
       power or investment power and also any shares that the individual has the
    right to acquire within 60 days of the date of this prospectus through
the exercise of any stock option or other right. Unless otherwise 
indicated in the footnotes, each individual has sole voting and   
  investment power (or shares such powers with his or her spouse) with
respect to the shares shown as beneficially owned).               

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2.     See "Plan of Distribution"                                               

3.     Shares directly held by listed shareholder. Does not include 526,825     
  shares held in the Dorothy C. Cason 1997 Three Year Grantor Retained
  Annuity Trust, Warren Cason, Jr., trustee, and 45,811 shares held by
Dorothy C. Cason, his spouse.                                     

4.     Shares directly held by listed shareholder. Does not include 206,149     
  shares held in the Kirk A. Scoggins 1997 Three Year Grantor Retained
  Annuity Trust, Melissa C. Scoggins, trustee. Does not include 28,571
     shares issued to Mr. Scoggins, a director of TeamStaff, pursuant to our
Senior Management Stock Option Plan.                              

5.     Shares directly held by listed shareholder. Does not include 526,825     
  shares held in the Dorothy C. Cason 1997 Three Year Grantor Retained
   Annuity Trust, Warren Cason, Jr., trustee; and 634,473 shares held by
Warren M. Cason, Sr., her spouse.                                 

6.     Shares directly held by listed shareholder. Does not include 634,473     
     shares directly held by Warren M. Cason, Sr.; and 45,811 shares held by
Dorothy C. Cason.                                                 

7.     Shares directly held by listed shareholder. Does not include 939,123     
directly held by Kirk A. Scoggins.                                

8.     7,143 shares issuable upon exercise of warrants issued to the holder and 
  89,145 shares issued to the shareholder as compensation for services
     rendered as our investment banker in connection with the acquisition by
Digital Solutions, Inc. of the TeamStaff companies.               

9.     Shares issuable upon exercise of warrants. Teamstaff retained Donald &   
Co. Securities, Inc. to act as investment bankers pursuant to an  
     agreement dated November 29, 1999. As compensation for its services, we
      issued 100,000 warrants to Donald & Co., which are exercisable at $4.151
  per share. Mr. Skiptunis is an employee of Donald & Co. and received
14,286 of the warrants.                                           

10.    Shares issuable upon exercise of warrants. Mr. Raymond Skiptunis is the  
    principal owner and officer of SR Capital Partners, LLC. Mr. Skiptunis
      served as the Chief Executive Officer of Teamstaff until 1996. 21,428 of
      the warrants held by SR Capital Partners have an exercise price of $5.25
per share and 14,286 warrants are exercisable at $4.151 per share.

11.    Pursuant to a registration rights agreement dated January 25, 1999, we   
are only required to register 33.3% of the listed shares per year 
      commencing on the first anniversary of the registration rights agreement
   (January 25, 2000). Certain of the shares are being held in escrow to
     satisfy possible claims for indemnification which may be made under the
    documents governing the acquisition of the former TeamStaff Companies.
    Accordingly, the listed holder may only sell a maximum of 33.3% of the
     listed shares per year following the effectiveness of this registration
statement.                                                        

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PLAN OF DISTRIBUTION

The common stock covered by this prospectus, including the shares 
underlying the warrants which will be issued by Teamstaff upon the exercise by  
the holders of the warrants, may be offered and sold from time to time by the   
selling security holders, and pledgees, donees, transferees or other successors 
in interest selling shares received after the date of this prospectus from the  
selling security holders as a pledge, gift or other non-sale related transfer,  
including in one or more of the following transactions:                         

-      on the over the counter market;                            

      -      in transactions other than on the over the counter market such as
private resales;                                    

-      in connection with short sales;                            

-      by pledge to secure debts and other obligations;           

      -      in connection with the writing of options, in hedge transactions,
      and in settlement of other transactions in standardized or
over-the-counter options;                           

-      in a combination of any of the above transactions; or      

-      pursuant to Rule 144 under the Securities Act, assuming the
availability of an examination from registration.   

 The selling security holders may sell their shares at market prices
prevailing at the time of sale, at prices related to prevailing market prices,  
at negotiated prices, or at fixed prices.                                       

       Broker-dealers that are used to sell shares will either receive discounts
or commissions from the selling shareholders, or will receive commissions from  
the purchasers for whom they acted as agents.                                   

     The selling security holders and intermediaries through whom shares are
sold may be deemed underwriters within the meaning of the Securities Act with   
respect to the shares offered.                                                  

       There can be no assurance that the selling security holders will sell all
or any of the common stock.                                                     

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       We have agreed to keep this prospectus effective for a period expiring on
the earlier of the date on which all of the selling security holders' shares    
have been sold or the date on which all such shares are eligible for sale       
pursuant to Rule 144 under the Securities Act.                                  

      The selling shareholders and us have agreed to customary indemnification
obligations with respect to the sale of common stock by use of this prospectus. 

 REPORTS TO SHAREHOLDERS

   Our company distributes annual reports to its stockholders, including
financial statements examined and reported on by independent public accountants,
and will provide such other reports as management may deem necessary or         
appropriate to keep stockholders informed of our company's operations.          

 LEGAL MATTERS

      The legality of the offering of the shares will be passed upon for us by
Goldstein & DiGioia, LLP, 369 Lexington Avenue, New York, New York l00l7.       

 EXPERTS

      The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement, to the extent and for   
the periods indicated in their reports, have been audited by Arthur Andersen    
LLP, independent public accountants, and are included herein in reliance upon   
the authority of said firm as experts in giving said reports.                   

ADDITIONAL INFORMATION

   Our company has filed a Registration Statement under the Act with the
Securities and Exchange Commission, with respect to the securities offered by   
this prospectus. This prospectus does not contain all of the information set    
forth in the registration statement. For further information with respect to our
company and such securities, reference is made to the registration statement and
to the exhibits and schedules filed therewith. Each statement made in this      
prospectus referring to a document filed as an exhibit to the registration      
statement is qualified by reference to the exhibit for a complete statement of  
its terms and conditions. The registration statement, including exhibits        
thereto, may be inspected without charge to anyone at the office of the         
Commission, and copies of all or any part thereof may be obtained from the      
Commission's principal office in Washington, D.C. upon payment of the           
Commission's charge for copying.                                                

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FORWARD LOOKING STATEMENTS

Certain statements contained herein constitute "forward-looking   
statements" within the meaning of the Private Securities Litigation Reform Act  
of 1995 (the "1995 Reform Act"). TeamStaff, Inc. desires to avail itself of     
certain "safe harbor" provisions of the 1995 Reform Act and is therefore        
including this special note to enable the Company to do so. Forward-looking     
statements included in this report involve known and unknown risks,             
uncertainties, and other factors which could cause the Company's actual results,
performance (financial or operating) or achievements to differ from the future  
results, performance (financial or operating) achievements expressed or implied 
by such forward-looking statements. Such future results are based upon          
management's best estimates based upon current conditions and the most recent   
results of operations. These risks include, but are not limited to, risks       
associated with the Company's risks of current as well as future acquisitions,  
risks from potential workers compensation claims and required payments, risks   
associated with payroll and employee related taxes which may require            
unanticipated payments by the Company, liabilities associated with the company's
status under certain federal and state employment laws as a co-employer, effects
of competition and technological changes and dependence upon key personnel.     

20

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B1’ Filing		Date		First		Last			Other Filings
		3/31/01		10					10-Q,  NT 10-Q
Filed on:		7/5/00
		6/30/00		1					10-Q,  NT 10-Q
		6/19/00		1
		6/15/00		3					8-K
		6/13/00		11
		6/2/00		10		12
		5/31/00		10					DEFS14A
		4/20/00		3					8-K
		4/14/00		10
		4/13/00		11					DEF 14A,  PRE 14A
		4/8/00		5
		4/7/00		5					8-K
		3/31/00		3		12			10-Q,  NT 10-Q
		1/25/00		20
		12/31/99		3		5			10-Q,  NT 10-Q
		11/29/99		20
		9/30/99		3		12			10-K405,  NT 10-K
		3/31/99		12					10-Q,  NT 10-Q
		2/10/99		5					PRE 14A
		1/25/99		5		20			8-K,  8-K/A
									List all Filings