Capstone Pharmacy Files Shelf Registration Statement With Sec With Respect To Secondary Shares Of Common Stock.

IRVING, TEXAS--(BUSINESS WIRE)--Feb. 18, 1997--CAPSTONE (NASDAQ: DOSE) CAPSTONE PHARMACY SERVICES, INC. (Nasdaq National Market Symbol - DOSE (common stock)) ("Capstone") announced that it has filed with the Securities and Exchange Commission a shelf registration statement on Form S-3 for the registration of 14,143,109 shares of previously issued Common Stock owned by shareholders of the Company.

All shares being registered were originally issued in connection with acquisitions or purchased by the shareholders in a series of private placements for the period from December, 1994, through July, 1996. Such shares have demand registration rights entitling them to this registration. Of the shares being registered, 8,356,815 are beneficially owned by Capstone's largest stockholder, Counsel Corporation, including 1,298,181 and 1,038,545 shares underlying warrants exercisable at $4.50 per share and $5.50 per share, respectively.

Of the shares being registered, 2,112,490 are owned by Integrated Health Services, Inc. as a result of Capstone's acquisition of Symphony Pharmacy Services from Integrated Health in August 1996. Another 2,708,804 shares are owned by two senior officers of Capstone who recently joined the Company's management team as a result of merging their businesses with the Company. A total of 965,000 shares are owned by investors who received registration rights on purchase of such shares in private placements concluded in April 1996.

The Company intends to use Lehman Brothers, Inc. and Wheat, First Securities, Inc. as placement agents on any offers and sales pursuant to this shelf registration statement that, during any five consecutive trading days, exceed the greater of 35,000 shares or five percent of the shares owned by such shareholder.

Capstone has been informed by shareholders holding over 11,000,000 shares that such shareholders do not currently anticipate selling a substantial number of shares in the near future.

"Combining into one shelf registration the various shares issued on acquisitions or sold in the previous private placements Is considered to be the most efficient and cost effective method for accommodating the demand registration rights of the various shareholders. We are pleased with this evolution as it simplifies our capital structure, better enabling us to work with our acquisition partners as we move forward " said Dirk Allison, President and CEO of Capstone.

Allan Silber, Chairman of the Board of Capstone and Chief Executive Officer of Counsel Corporation stated: "With respect to the 8,356,815 shares beneficially owned by Counsel being registered in this shelf registration, we have no present intention of selling such shares. We have a strong commitment to Capstone. We are satisfied that the company is continuing to meet the objectives we have set and is quickly moving toward becoming a leader in its industry".

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there by any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

A written prospectus may be obtained from Capstone upon effectiveness of the registration statement by writing 9901 East Valley Ranch Parkway, Suite 3001, Irving, Texas 75063 or calling [phone].

Capstone is a leading provider of extended care institutional pharmacy services to nursing homes and the leading provider of pharmacy services to correctional systems in the United States. Capstone serves more than 120,000 nursing home beds and more than 110,000 inmates.

CONTACT: Capstone Pharmacy Services, Inc.

Dirk Allison, 972/401-1541

[e-mail] (E-Mail) or

Jim Shelton, 410/646-6987

[e-mail] (E-Mail) or

Morris Perlis, 416/866-3193

[e-mail] (E-Mail)