SUPERIOR SUPPLEMENTS INC, SB-2, 1997-10-06

SUPERIOR SUPPLEMENTS INC
SB-2, 1997-10-06
MEDICINAL CHEMICALS & BOTANICAL PRODUCTS

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1997

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
------------------------

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SUPERIOR SUPPLEMENTS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 2833 11-3320172
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

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270 OSER AVENUE
HAUPPAUGE, NEW YORK 11788
(516) 231-0783
(ADDRESS AND TELEPHONE NUMBER
OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE OF BUSINESS)
------------------------

LAWRENCE D. SIMON
PRESIDENT
270 OSER AVENUE
HAUPPAUGE, NEW YORK 11788
(516) 231-0783
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------

Copies to:

STEVEN F. WASSERMAN, ESQ.
BERNSTEIN & WASSERMAN, LLP
950 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 826-0730
(212) 371-4730 (FAX)
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as

reasonably practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /x/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED
MAXIMUM OFFERING PROPOSED
TITLE OF EACH CLASS AMOUNT TO BE PRICE PER MAXIMUM AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED SECURITY(1) OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.0001 per share............. 2,350,000 $6.375 $14,981,250 $4,539.77
Class A Warrants (2)................................. 2,350,000 -- -- --
Common Stock, par value $.0001 per share underlying
Class A Warrants (3)............................... 2,350,000 $5.25 $12,337,500 $3,738.64
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Total $27,318,750 $8,278.41
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</TABLE>

(1) Estimated solely for purposes of calculating registration fee pursuant to
Rule 457 under the Securities Act of 1933.
(2) The Class A Warrants are exercisable over a four (4) year period commencing
one (1) year following the effective date of the Company's initial public
offering into one (1) share of Common Stock per Class A warrant at an
exercise price of $5.25 per share.
(3) The number of shares of Common Stock specified is the number which may be
acquired upon exercise of the Class A Warrants at the maximum exercise price
thereof.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF

THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUPERIOR SUPPLEMENTS, INC.

CROSS REFERENCE SHEET

(SHOWING LOCATION IN THE PROSPECTUS OF INFORMATION
REQUIRED BY ITEMS 1 THROUGH 23, PART I, OF FORM SB-2)

<TABLE>
<CAPTION>
ITEM IN FORM SB-2 PROSPECTUS CAPTION
- ----------------------------------------------------------- -----------------------------------------------------
<S> <C> <C>
1. Front of Registration Statement and Outside Front
Cover of Prospectus................................ Facing Page of Registration Statement; Outside Front
Page of Prospectus

2. Inside Front and Outside Back Cover Pages of
Prospectus......................................... Inside Front Cover Page of Prospectus; Outside Back
Cover Page of Prospectus

3. Summary Information and Risk Factors................. Prospectus Summary; Risk Factors

4. Use of Proceeds...................................... *

5. Determination of Offering Price...................... Outside Front Cover Page of Prospectus; Risk Factors

6. Dilution............................................. *

7. Selling Securityholder............................... Description of Securities; Selling Securityholder

8. Plan of Distribution................................. Outside Front Cover Page of Prospectus; Risk Factors;
Underwriting

9. Legal Proceedings.................................... Business--Litigation

10. Directors, Executive Officers, Promoters and Control
Persons............................................ Management

11. Security Ownership of Certain Beneficial Owners and
Management......................................... Principal Stockholders

12. Description of Securities............................ Description of Securities

13. Interest of Named Experts and Counsel................ Experts; Legal Matters

14. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities..................... Certain Transactions

15. Organization Within Last 5 Years..................... Prospectus Summary; The Company; Business

16. Description of Business.............................. Business; Risk Factors

17. Management's Discussion and Analysis or Plan of
Operation.......................................... Management's Discussion and Analysis of Financial
Condition and Results of Operations

18. Description of Property.............................. Business--Facilities

19. Certain Relationships and Related Transactions....... Certain Transactions

20. Market for Common Equity and Related Stockholder
Matters............................................ Outside Front Cover Page of Prospectus; Prospectus
Summary; Description of Securities

21. Executive Compensation............................... Management--Executive Compensation

22. Financial Statements................................. Selected Financial Data; Financial Statements

23. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures............... *
</TABLE>

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* Omitted because Item is not applicable.

<PAGE>
SUBJECT TO COMPLETION, DATED , 1997
PROSPECTUS
SUPERIOR SUPPLEMENTS, INC.
2,350,000 SHARES OF COMMON STOCK
AND
2,350,000 CLASS A WARRANTS

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

This Prospectus relates to the sale of 2,350,000 shares of Common Stock,
2,350,000 Class A redeemable common stock purchase warrants (the 'Class A
Warrants') and 2,350,000 shares of Common Stock issuable upon exercise of the
Class A Warrants, all of which are held by PMF, Inc. ('PMF'), a company
wholly-owned and controlled by Barry Gersten, the founder of the Company. PMF is
hereinafter referred to as the 'Selling Securityholder.' The Class A Warrants
shall be exercisable commencing one (1) year after the effective date of the
Company's initial public offering. Each Class A Warrant entitles the holder to
purchase one (1) share of Common Stock at a price of $5.25 per share during the
four (4) year period commencing one (1) year from the effective date of the
Company's initial public offering. The Class A Warrants are redeemable by the
Company for $.05 per Warrant, at any time after February 25, 1998, upon thirty
(30) days' prior written notice, if the average closing price or bid price of
the Common Stock, as reported by the principal exchange on which the Common
Stock is traded, the NASD OTC Bulletin Board or the National Quotation Bureau
Incorporated, as the case may be, equals or exceeds $10.00 per share, for any
twenty (20) trading days within a period of thirty (30) consecutive trading days
ending five (5) days prior to the date of the notice of redemption. Upon thirty
(30) days' written notice to all holders of the Class A Warrants, the Company
shall have the right to reduce the exercise price and/or extend the term of the
Class A Warrants. See 'Description of Securities.' The Company will not receive
any of the proceeds on the sale of the securities by the Selling Securityholder.
PMF owned 58.75% of the outstanding shares of Common Stock of the Company and
67.1% of the Company's outstanding Class A Warrants prior to the Offering. The
resale of the securities of the Selling Securityholder is subject to Prospectus
delivery and other requirements of the Securities Act of 1933, as amended (the
'Act'). Sales of such securities or the potential of such sales at any time may
have an adverse effect on the market prices of the securities offered hereby.
See 'Selling Securityholder.'

The Common Stock, Class A Warrants and Common Stock issuable upon exercise
of the Class A Warrants offered by this Prospectus may be sold from time to time
by the Selling Securityholder, or by its transferees. No underwriting
arrangements have been entered into by the Selling Securityholder. The
distribution of the securities by the Selling Securityholder may be effected in
one or more transactions that may take place on the over-the-counter market
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more dealers for resale of such 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
Securityholder in connection with sales of such securities.

The Selling Securityholder and intermediaries through whom such securities

may be sold may be deemed 'underwriters' within the meaning of the Securities
Act of 1933, as amended (the 'Act'), with respect to the securities offered and
any profits realized or commissions received may be deemed underwriting
compensation. The Company has agreed to indemnify the Selling Securityholder
against certain liabilities, including liabilities under the Act.

The Company will not receive any of the proceeds from the sale of the
securities by the Selling Securityholder. In the event the Class A Warrants
offered hereby are exercised the Company will receive the proceeds of the
exercise price of such warrants. All costs incurred in the registration of the
securities of the Selling Securityholder are being borne by the Company. See
'Selling Securityholder.'

AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. SEE 'RISK FACTORS.'

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS , 1997

<PAGE>
AVAILABLE INFORMATION

The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act') and in accordance
therewith will file reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). Reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained at the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, DC 20549. Copies of such material can be obtained upon
written request addressed to the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Website on the Internet (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission through the Electronic Data Gathering,
Analysis, and Retrieval System (EDGAR). The Company has filed with the
Commission a registration statement on Form SB-2 (herein together with all
amendments and exhibits referred to as the 'Registration Statement') under the
Act of which this Prospectus forms a part. This Prospectus does not contain all
of the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission. For further information reference is made to the Registration
Statement.

ALTHOUGH THEY HAVE NO OBLIGATION TO DO SO, THE UNDERWRITERS FOR THE
COMPANY'S INITIAL PUBLIC OFFERING MAY FROM TIME TO TIME ACT AS MARKET MAKERS AND
OTHERWISE EFFECT TRANSACTIONS IN THE COMPANY'S SECURITIES. THE UNDERWRITERS, IF
THEY PARTICIPATE IN THE MARKET, MAY BECOME A DOMINATING INFLUENCE IN THE MARKET
FOR THE UNITS OR THE COMMON STOCK AND CLASS A WARRANTS CONTAINED THEREIN.
HOWEVER, THERE IS NO ASSURANCE THAT THE UNDERWRITERS WILL OR WILL NOT CONTINUE
TO BE A DOMINATING INFLUENCE. THE PRICES AND LIQUIDITY OF THE SECURITIES OFFERED
HEREUNDER MAY BE SIGNIFICANTLY AFFECTED BY THE DEGREE, IF ANY, OF THE
UNDERWRITERS' PARTICIPATION IN SUCH MARKET. SEE 'RISK FACTORS--LIMITED PRIOR
MARKET FOR UNITS, COMMON STOCK AND CLASS A WARRANTS; NO ASSURANCE OF PUBLIC
TRADING MARKET.' THE UNDERWRITERS MAY DISCONTINUE SUCH ACTIVITIES AT ANY TIME OR
FROM TIME TO TIME.

<PAGE>
PROSPECTUS SUMMARY

The following is a summary of certain information (including financial
statements and notes thereto) contained in this Prospectus and is qualified in
its entirety by the more detailed information appearing elsewhere herein. In
addition, unless otherwise indicated to the contrary, all information appearing
herein does not give effect to (i) 1,150,000 shares of Common Stock issuable
upon exercise of the Class A Warrants, (ii) 50,000 Units consisting of 100,000
shares of Common Stock and 100,000 Class A Warrants issuable upon exercise of
the Underwriters' Unit Purchase Option; (iii) 100,000 shares of Common Stock
issuable upon exercise of the Class A Warrants included in the Underwriters'
Unit Purchase Option; (iv) 2,350,000 shares of Common Stock issuable upon
exercise of the Class A Warrants held by PMF, Inc. ('PMF'), a company
wholly-owned and controlled by Barry Gersten, the founder of the Company which
are being offered for sale in this Offering, and (v) employee stock options. See
'Description of Securities,' 'Certain Transactions,' and 'Management--Stock
Option Plans and Agreements.' Each prospective investor is urged to read this
Prospectus in its entirety.

THE COMPANY

Superior Supplements, Inc., a Delaware corporation (the 'Company' or
'SSI'), was formed on April 24, 1996. The Company is engaged in the development,
manufacture, marketing and sale of dietary supplements including vitamins,
minerals, herbs and specialty nutritional supplements, in bulk tablet, capsule
and powder form. The Company manufactures a wide variety of products for
companies which package and sell through many different channels of
distribution, including health food, drug, convenience and mass market stores.
The Company's manufacturing facility has production equipment consisting of
tablet presses and encapsulating machines with a capacity of producing per
annum, in excess of one billion two hundred million (1,200,000,000) tablets and
capsules of various sizes and shapes. The Company manufactures single ingredient
herbal products and multi-ingredient vitamins in tablet and capsule form. All
manufacturing is conducted in accordance with Good Manufacturing Practice
Standards of the United States Food and Drug Administration and other applicable
regulatory standards.

On May 14, 1996, the Company entered into a supply agreement with PDK Labs
Inc. a New York corporation ('PDK'), as amended, pursuant to which the Company
agreed to supply PDK with vitamins and dietary supplements manufactured to PDK's
specifications in bulk tablet form for a three (3) year period, renewable for
successive one (1) year periods thereafter. Under the terms of the agreement,
PDK agreed to purchase products having a minimum aggregate sales price of
$2,500,000 per annum during the term of the agreement. In the event that PDK
fails to purchase $2,500,000 of product in any given year, the Company will be
paid up to $100,000, on a pro-rated basis, as liquidated damages. Sales to PDK
approximated 87% of total sales for the year ended June 30, 1997.

On May 31, 1996, the Company entered into an exclusive supply agreement
with Compare Generiks, Inc., a Delaware corporation ('CGI'), pursuant to which
the Company agreed to supply CGI with all of CGI's requirements for vitamins on
an exclusive basis (other than any vitamins sold under the 'Energex' trade mark
or as part of the 'Energex' product line) for a three (3) year period, renewable

for successive one (1) year periods thereafter. As of September 15, 1997, there
have been no sales to CGI.

PDK supplies certain management and personnel to the Company and Reginald
Spinello, one of the Company's directors, is also the Executive Vice President
of PDK. In addition, one of the Company's directors, Daniel Durchslag is also a
director of CGI. In addition, Reginald Spinello and Daniel Durchslag together
with Lawrence Simon have voting power over more than fifty percent (50%) of the
Common Stock and the Preferred Stock of the Company pursuant to a Voting Trust
Agreement with PMF. Messrs. Spinello, Durchslag and Simon may be deemed to be
founders of the Company. See 'Risk Factors--Conflicts of Interest' and
'Business--Conflicts of Interest.'

The Company was founded by Barry Gersten with the assistance of Lawrence
Simon, with the intention of starting a manufacturing company. Messrs. Simon and
Gersten developed the Company's business plan and subsequently negotiated the
Company's supply agreements which form the core of its business.

3
<PAGE>
PMF, a company wholly owned and controlled by Barry Gersten, the Company's
founder, maintains a passive investment interest in the Company and has granted
a voting trust on the 5,000,000 shares of preferred stock held by PMF to three
(3) of the Company's directors.

PMF is offering 2,350,000 shares of Common Stock, 2,350,000 Class A
Warrants and 2,350,000 shares of Common Stock issuable upon exercise of the
Class A Warrants for sale in this Offering and is hereinafter referred to as the
'Selling Securityholder' or 'PMF.'

On February 26, 1997, the Company completed an underwritten public offering
(the 'Initial Public Offering') of its securities by selling 250,000 units (the
'Units') consisting of 500,000 shares of Common Stock and 500,000 Class A
Warrants to purchase an additional 500,000 shares of Common Stock.
Simultaneously, with the Company's Initial Public Offering, PMF, the Selling
Securityholder in this Offering, also completed an underwritten public offering
of securities by selling 325,000 Units consisting of 650,000 shares of Common
Stock and 650,000 Class A Warrants to purchase an additional 650,000 shares of
Common Stock. The Company did not receive any of the proceeds of the sale of
securities by PMF.

The Company will not receive any of the proceeds from this Offering. In the
event the Class A Warrants offered hereby are exercised the Company will receive
the proceeds of the exercise price of such warrants.

The Company maintains its executive offices at 270 Oser Avenue, Hauppauge,
New York 11788, telephone number (516) 231-0783.

SEE 'RISK FACTORS' FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED IN EVALUATING THE COMPANY AND ITS BUSINESS.

THE OFFERING

<TABLE>

<S> <C>
Securities Offered by the Selling 2,350,000 shares of Common Stock at a price of $6.375 per
Securityholder (1)................................. share, 2,350,000 Class A Warrants and 2,350,000 shares of
Common Stock issuable upon exercise of the Class A Warrants
at a price of $5.25 per share. See 'Description of
Securities.'

SECURITIES OUTSTANDING PRIOR TO THE OFFERING:
Common Stock..................................... 4,000,000 Shares

Series A Preferred Stock......................... 5,000,000 Shares

Class A Warrants................................. 3,500,000 Warrants

SECURITIES OUTSTANDING SUBSEQUENT TO THE
OFFERING(2):

Common Stock..................................... 4,000,000 Shares

Series A Preferred Stock......................... 5,000,000 Shares

Class A Warrants................................. 3,500,000 Warrants

Use of Proceeds.................................. The Company will receive no proceeds from the sale of the
2,350,000 shares of Common Stock and 2,350,000 Class A
Warrants offered hereby. In the event the Class A Warrants
offered hereby are exercised the Company will receive the
proceeds of the exercise price of such warrants.
</TABLE>

4
<PAGE>

Risk Factors....................................... Limited Operating History, No Assurance that the Company
will Successfully Continue Business; Dependence on Company's
Initial Public Offering Proceeds; Possible Need for
Additional Financing; Benefits of Offering to Selling
Securityholder; Possible Adverse Effect on the Market of
Shares Owned by Selling Securityholder; Significant Industry
Competition; Conflicts of Interest; Governmental Regulation;
Dependence on PDK and CGI; Dependence on Key Personnel;
Control by PMF; Voting Trust Agreement Granted to Certain
Directors; Limited Number of Management Personnel; Risks
Attendant to Expansion; Product Liability Risks; Limited
Prior Market for Units, Common Stock and Class A Warrants;
No Assurance of Public Trading Market; Impact on Market of
Warrant Exercise; Underwriters' Unit Purchase Option;
Possible Adverse Effects of Ownership of Preferred Stock by
PMF; 'Penny Stock' Regulations May Impose Certain
Restrictions on Marketability of Securities; No Dividends;
Limitation on Director Liability; Shares Eligible for Future

Sale May Adversely Affect the Market; Anti-Takeover Effect
of General Corporation Law of Delaware. See 'Risk Factors.'
</TABLE>

<TABLE>
<S> <C> <C> <C>
OTC Bulletin Board Symbols(3)...................... Units -- SPSUU
Common Stock -- SPSU
Class A Warrants -- SPSUW
</TABLE>

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(1) Prior to this Offering, the Company completed the public offering of (i)
250,000 Units consisting of 500,000 shares of Common Stock and 500,000 Class
A Warrants to purchase an additional 500,000 shares of Common Stock offered
by the Company, and (ii) 325,000 Units consisting of 650,000 shares of
Common Stock and 650,000 Class A Warrants to purchase an additional 650,000
shares of Common Stock offered by PMF, Inc., the Selling Securityholder in
this Offering. See 'Prior Company Offering' and 'Certain Transactions.'
(2) Does not include (i) 500,000 shares of Common Stock issuable upon exercise
of the Class A Warrants previously offered by the Company; (ii) 500,000
shares of Common Stock issuable upon exercise of the Class A Warrants
previously offered by the Selling Securityholder; (iii) 150,000 shares of
Common Stock issuable upon exercise of the Class A Warrants previously
offered by the Selling Securityholder as part of the over-allotment option
exercised by the Underwriters of the Initial Public Offering; or (iv)
2,350,000 shares of Common Stock issuable upon exercise of the Class A
Warrants held by the Selling Securityholder, PMF, Inc., a company wholly-
owned and controlled by Barry Gersten, which are being offered for sale in
this Offering.
(3) Although the Company's Units, Common Stock and Class A Warrants are listed
on the NASD OTC Bulletin Board, there can be no assurance that the Company's
securities will continue to be included for quotation, or that the Company
will be able to continue to meet the requirements for continued quotation,
or that a public trading market will be sustained. See 'Risk
Factors--Limited Market for Units, Common Stock and Class A Warrants; No
Assurance of Public Trading Market.'

<PAGE>
SUMMARY FINANCIAL INFORMATION

The selected financial data presented below for the Company's statement of
operations for the year ended June 30, 1997 and the period April 24, 1996
(Inception) to June 30, 1996 and the balance sheet as of June 30, 1997 are
derived from financial statements of the Company, which have been audited by
Holtz Rubenstein & Co., LLP, independent accountants, whose report is included
elsewhere herein. The data set forth below should be read in conjunction with
and is qualified in its entirety by the Company's financial statements, related
notes and Management's Discussion and Analysis of Financial Condition and
Results of Operations. See 'Financial Statements,' and 'Management's Discussion
and Analysis of Financial Condition and Results of Operations.' The following
summary financial information has been summarized from the Company's financial
statements included elsewhere in this Prospectus. The information should be read
in conjunction with the financial statements and the related notes thereto. See
'Financial Statements.'
<TABLE>
<CAPTION>
PERIOD APRIL
24, 1996
YEAR ENDED (INCEPTION) TO
JUNE 30, 1997 JUNE 30, 1996
------------- --------------
<S> <C> <C>
SUMMARY STATEMENT OF OPERATIONS(1)
Revenues............................................................................ $ 4,628,129 $ 857,398
Gross Profit........................................................................ $ 399,653 $ 119,358
Operating (Loss) Income............................................................. $ (67,455) $ 48,389
Loss on Sale of Securities.......................................................... $ (422,586) $ --
Interest expense (net).............................................................. $ (28,479) $ --
Net (Loss) Income................................................................... $ (558,720) $ 35,189
Net (Loss) Income per share......................................................... $ (0.15) $ 0.01
Weighted Average Number of Common Shares Outstanding................................ 3,663,014 3,500,000

<CAPTION>
JUNE 30, 1997
-------------
<S> <C>
SUMMARY BALANCE SHEET DATA
Working Capital..................................................................... $ 1,463,968
Total Assets........................................................................ $ 5,221,535
Total Liabilities................................................................... $ 2,588,637
(Deficit)........................................................................... $ (523,531)
Stockholders' Equity................................................................ $ 2,632,898
</TABLE>

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(1) No costs will be incurred by the Company in connection with the resale of
the 2,350,000 shares, 2,350,000 Class A Warrants and 2,350,000 shares
issuable upon exercise of the Class A Warrants offered hereby.

<PAGE>
RISK FACTORS

An investment in the securities offered hereby is speculative and involves
a high degree of risk and should only be purchased by investors who can afford
to lose their entire investment. Prospective purchasers, prior to making an
investment, should carefully consider the following risks and speculative
factors, as well as other information set forth elsewhere in this Prospectus,
associated with this Offering, including the information contained in the
Financial Statements herein.

1. Limited Operating History, No Assurance that the Company will
Successfully Continue Business. The Company was organized on April 24, 1996 and
is in its early stage of operations. The Company's core business consists of the
supply agreements with PDK and CGI. Through June 30, 1997, approximately 88% of
the Company's revenues were from PDK and there have been no sales to CGI. The
Company's prospects must be considered in light of the risks, expenses, and
difficulties frequently encountered by a small business in a highly competitive
industry. As of June 30, 1997, the Company had stockholder's equity of
$2,632,898 and net working capital of $1,464,000. The Company incurred a net
loss of $558,720 for the year ended June 30, 1997. The Company's operating
expenses have increased significantly as a result of the Company's start up of
manufacturing operations and expansion of distribution, marketing and sales
efforts. Since the Company has a limited operating history, it is impossible to
determine whether its operations will be profitable or that it will ever
generate sufficient revenues to meet its expenses and support its activities.
Like any relatively new business enterprise operating in a specialized and
intensely competitive market, the Company is subject to many business risks
which include, but are not limited to, unforeseen marketing and promotional
expenses, unforeseen negative publicity, competition, product liability and lack
of operating experience. Many of the risks may be unforeseeable or beyond the
control of the Company. There can be no assurance that the Company will
successfully implement its business plan in a timely or effective manner, or
that management of the Company will be able to distribute and sell enough
products to generate sufficient revenues and continue as a going concern. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations,' 'Business,' 'Certain Transactions' and 'Financial Statements.'

2. Dependence on Company's Initial Public Offering Proceeds; Possible Need
for Additional Financing. The Company's cash requirements will be significant.
The Company is dependent on the proceeds from its Initial Public Offering to
generate cash for the acquisition of additional machinery, and expansion of its
product lines and marketing efforts. The Company anticipates, based on its
currently proposed plans, that the proceeds of its Initial Public Offering,
together with funds generated from operations, will be sufficient to satisfy its
anticipated cash requirements for approximately twelve (12) months from the date
of this Prospectus. In the event that these plans change, or the costs of
development of operations prove greater than anticipated, the Company could be
required to modify its operations, curtail its expansion or seek additional
financing sooner than currently anticipated. The Company believes that its
operations would be restricted absent expansion. The Company has no current
arrangements with respect to such additional financing and there can be no
assurance that such additional financing, if available, will be on terms
acceptable to the Company.

3. Benefits of Offering to Selling Securityholder. The Registration
Statement, of which this Prospectus forms a part, includes 2,350,000 shares of
Common Stock, 2,350,000 Class A Warrants and 2,350,000 shares of Common Stock
issuable upon exercise of the Class A Warrants owned by the Selling
Securityholder and, the Selling Securityholder, and not the Company, will
receive the proceeds from their sale. In the event the Class A Warrants offered
hereby are exercised the Company will receive the proceeds of the exercise price
of such warrants.

4. Possible Adverse Effect on the Market of Shares Owned by Selling
Securityholder. The registration statement of which this Prospectus forms a
part covers the resale of 2,350,000 shares of Common Stock, 2,350,000 Class A
Warrants and 2,350,000 shares of Common Stock issuable upon exercise of the
Class A Warrants owned by PMF, a company wholly-owned and controlled by Barry
Gersten. The shares and warrants being registered are not subject to any
restriction on resale by the Company. As a result, those shares and warrants may
be sold immediately after the Offering. The Company has been advised by the
Selling Securityholder that it has no present intentions regarding the timing
and amount of sales of these shares or warrants.

However, prospective investors should be aware that the possibility of
sales may, in the future, have a depressive effect on the price of the Company's
Common Stock in any market which may develop, and therefore, the ability of any
investor to market his shares may be dependent directly upon the number of
shares that are offered and sold. Affiliates of the Company may sell their
shares during a favorable movement in the market price of the Company's Common
Stock which may have a depressive effect on its price per share. See
'Description of Securities.'

7
<PAGE>
5. Significant Industry Competition. The market for dietary supplement
products is highly competitive in each of the Company's existing and anticipated
product lines and methods of distribution. Numerous manufacturers and
distributors compete for customers throughout the United States and
internationally in the 'bulk' packaged dietary supplement industry, selling
products to distributors who service health food, drug, convenience and mass
market stores, companies that market a branded or generic line of products but
do not manufacture these items ('repackagers'), and other manufacturers who
'outsource' a portion of their needs to supplement their own capacities. Many of
the Company's competitors are substantially larger and more experienced than the
Company, have longer operating histories and have materially greater financial
and other resources than the Company. Many of these competitors are private
companies, and therefore, the Company cannot compare its revenues with respect
to the sales volume of each competitor. The Company's significant competitors
include Nature's Bounty and International Vitamin Corporation, both of whom have
longer operating histories and materially greater financial and other resources
than the Company (although, no implication is intended hereby regarding the
Company's industry ranking in comparison to such competitors). There can be no
assurance that the Company will be able to compete successfully with its more
established and better capitalized competitors.

6. Conflicts of Interest. After this Offering, PMF, a company wholly-owned

and controlled by Barry Gersten, will not own any of the Company's outstanding
shares of Common Stock or Class A Warrants but will continue to own 100% of the
shares of Series A Preferred Stock of the Company, par value $.0001 per share
(the 'Series A Preferred Stock'). In addition, in June 1996, PMF made a loan of
$200,000 to the Company pursuant to a promissory note. At present, PDK is a
major customer of the Company, accounting for a significant percentage of the
Company's total sales revenue and also supplies certain management and personnel
to the Company. In addition, Reginald Spinello, one of the Company's Directors,
holds a management position with PDK. Daniel Durchslag, one of the Company's
Directors, is also a Director of CGI, a customer and stockholder of the Company.
Reginald Spinello and Daniel Durchslag, together with Lawrence Simon, have
voting power over more than fifty percent (50%) of the Common Stock and
Preferred Stock of the Company pursuant to a voting trust agreement with PMF. It
is anticipated that PDK will continue to purchase a significant percentage of
the Company's products, at or near its minimum requirement of $2,500,000 per
annum. As a result of these transactions the Company believes that the potential
for conflicts of interest exist as follows: (i) a conflict resulting from PMF's
ownership interest and PMF's role as a creditor of the Company; (ii) a conflict
resulting from the voting control over PMF's preferred stock to certain of the
Company's directors who also hold board and management positions with two (2) of
the Company's most significant customers and (iii) a conflict resulting from
CGI's ownership interest and CGI's role as a customer of the Company. In
circumstances where a conflict of interest exists, members of the Board of
Directors who also hold a management position with PDK or are members of the CGI
Board of Directors may be precluded from participating in corporate decisions.
Although the Board of Directors of the Company has not adopted any written
policy on this matter, the General Corporation Law of the State of Delaware
contains specific provisions governing such conflicts.

7. Governmental Regulation. The processing, formulation, packaging,
labeling and advertising of the Company's products are subject to regulation by
one or more federal agencies, including the Food and Drug Administration
('FDA'), the Federal Trade Commission ('FTC'), the Consumer Product Safety
Commission, the United States Department of Agriculture, and the Environmental
Protection Agency. These activities are also regulated by various agencies of
the states and localities in which the Company's products are sold.

In October 1994, the Dietary Supplement Health and Education Law was signed
into law. This new law, which amends the Federal Food, Drug and Cosmetic Act,
defines dietary supplements as a separate and distinct entity, and not as food
additives. Vitamins, minerals, amino acids, herbs and other nutritional
substances are included in the definition. It expressly provides for the use of
third party scientific literature which shall not be regulated as labeling by
the FDA, provided it is not false or misleading. The new law also delayed the
FDA's requirements for extensive product label changes which were to be applied
to products manufactured after July 1, 1995. It provides a set of different
label requirements for ingredient content information, and directs the FDA to
publish new label regulations for supplements with a mandatory effective date of
December 31, 1996. It makes no modifications on the requirements and
proscriptions regarding health claims for dietary supplements. The new law also
introduced the concept of good manufacturing practices to the manufacture of
dietary supplements. At this time, it would be premature to predict its overall
impact on the dietary supplement industry.

The Company cannot determine what effect this proposed rule-making, or
other governmental regulations or administrative orders, when and if
promulgated, would have on its business in the future. They could, however,

8
<PAGE>
require the reformulation of certain products to meet new standards, require the
recall or discontinuance of certain products not capable of reformulation, or
impose additional recordkeeping, expanded documentation of the properties of
certain products, expanded or different labeling, and scientific substantiation.
Any or all of such requirements could adversely affect the Company's operations
and its financial condition. See 'Business--Government Regulations.'

8. Dependence on PDK and CGI. The Company's core business consists of two
supply agreements entered into by the Company and PDK and CGI. Through June 30,
1997, PDK accounted for approximately eighty eight (88%) of the total sales of
the Company, and there have been no sales to CGI. There can be no assurance that
PDK will maintain this volume of business with the Company or that CGI's volume
of business will become substantial. Although the Company believes that other
customers are available for the purchase of such products from the Company,
there can be no assurance that the Company would be able to replace these
customers, in the event either supply agreement is terminated. Even if the
Company is able to develop alternative customer sources, there can be no
assurance that it can do so without material delay or on a cost effective basis
at prices similar to those paid by PDK or CGI. As a result, any interruption or
discontinuance of supplies to PDK or CGI could result in considerable expense,
delay the Company's operations, and have a material adverse effect on the
Company.

9. Dependence on Key Personnel. The Company is substantially dependent on
the continued services of Lawrence D. Simon. The Company entered into a one (1)
year employment agreement with Mr. Simon which has been extended for a further
one (1) year period. Should Mr. Simon not be able to continue as an officer of
the Company, its prospects could be adversely affected and as a result the loss
of this officer could materially adversely affect the Company's operations. The
Company currently does not maintain key personnel life insurance for any of its
employees. See 'Management.'

10. Control by PMF; Voting Trust Agreement Granted to Certain
Directors. Prior to this Offering, PMF, a company wholly-owned and controlled
by Barry Gersten, owned 2,350,000 shares of the Company's issued and outstanding
Common Stock, 5,000,000 shares of the Company's Preferred Stock, representing
81.7% of the Company's outstanding shares and 2,350,000 Class A Warrants. The
principal business of PMF and Mr. Gersten is as a private investor. After this
Offering, PMF will own 0% of the outstanding Common Stock and 100% of the
outstanding Preferred Stock representing a combined percentage of the total
combined vote after the Offering of 55.6%, and 0% of the outstanding Class A
Warrants. See 'Principal Stockholders.' Since holders of Common Stock do not
have any cumulative voting rights and directors are elected by a majority vote,
PMF is in a position to control the election of directors as well as the affairs
of the Company. In the event PMF were to sell all of its shares of the Company's
Common Stock and all of its Class A Warrants, pursuant to this Offering, PMF
would continue to own one hundred (100%) percent of the Preferred Stock,
representing 55.6% of the voting shares of the Company, and would thereby be in

a position to continue to control the election of directors and officers of the
Company. However, PMF granted a voting trust over the Preferred Stock on May 1,
1996 for a period of five (5) years to Lawrence Simon, Reginald Spinello and
Daniel Durchslag and, accordingly, PMF does not have actual control over the
election of directors and officers of the Company. Such control could also
preclude an unsolicited acquisition of the Company and consequently, adversely
affect the market price of the Common Stock. See 'Description of Securities.'

11. Limited Number of Management Personnel. There is currently only one
(1) executive officer of the Company. In addition, the Company is provided
certain management and personnel relating to accounting and administrative
functions by PDK pursuant to a management agreement. Following this Offering,
there can be no assurance that, if the Company grows, the current management
team will be able to continue to properly manage the Company's affairs. Further,
there can be no assurance that the Company will be able to identify additional
qualified managers on terms economically feasible to the Company.

12. Risks Attendant to Expansion. The Company intends to utilize a
significant portion of the net proceeds of its prior Initial Public Offering to
expand its business. In this regard, the Company has allocated a significant
portion of the proceeds to the acquisition of additional machinery, the
expansion of its marketing efforts, and for general administrative costs. Many
of the risks of expansion may be unforeseeable or beyond the control of
management. There can be no assurance that the Company will successfully
implement its business plan in a timely or effective manner, or that management
of the Company will be able to generate sufficient revenue to continue as a
going concern.

13. Product Liability Risks. In view of the nature of its business, the
Company is subject to the inherent risk of products liability claims in the
event that, among other things, the use or ingestion of its products results in

9
<PAGE>
injury. Accordingly, currently the Company maintains product liability insurance
as a named insured on each of its suppliers' policies. There can be no assurance
that existing or future insurance coverage will be sufficient to cover any
possible product liability risks or that such insurance will continue to be
available to the Company on economically feasible terms. See 'Business--Product
Liability Insurance.'

14. Limited Prior Market for Units, Common Stock and Class A Warrants; No
Assurance of Public Trading Market. Prior to this Offering, a limited public
trading market existed for the Units, Common Stock and Class A Warrants. There
can be no assurances that a public trading market for the Units, Common Stock
and Class A Warrants will be sustained. Although the Units, Common Stock and
Class A Warrants are included on the NASD OTC Bulletin Board, no assurance can
be given that the Units, Common Stock and Class A Warrants will continue to be
listed on the NASD OTC Bulletin Board in the future. If for any reason the
Units, Common Stock and Class A Warrants do not retain their listing on the NASD
OTC Bulletin Board, purchasers of the Units, Common Stock and Class A Warrants
may have difficulty in selling their securities should they desire to do so. In
any event, because certain restrictions may be placed upon the sale of
securities at prices under $5.00, unless such securities qualify for an

exemption from the 'penny stock' rules, such as a listing on The Nasdaq Small
Cap Market, some brokerage firms will not effect transactions in the Company's
securities and it is unlikely that any bank or financial institution will accept
such securities as collateral, which could have an adverse effect in developing
or sustaining any market for the Units, Common Stock and Class A Warrants. See
'Risk Factors--Penny Stock Regulations May Impose Certain Restrictions on
Marketability of Securities.'

Although they have no legal obligation to do so, the Underwriters of the
Initial Public Offering from time to time may act as market makers and may
otherwise effect and influence transactions in the Company's securities.
However, there is no assurance that the Underwriters will continue to effect and
influence transactions in the Company's securities. The prices and liquidity of
the Company's securities may be significantly affected by the degree, if any, of
the Underwriters' participation in the market. The Underwriters may voluntarily
discontinue such participation at any time.

15. Impact on Market of Warrant Exercise. In the event of the exercise of
a substantial number of Class A Warrants offered as part of the Units in the
Initial Public Offering or owned by PMF and offered for sale hereby, the
resulting increase in the amount of Common Stock of the Company in the trading
market could substantially affect the market price of the Common Stock. See
'Description of Securities--Class A Warrants.'

16. Underwriters' Unit Purchase Option. In connection with the Initial
Public Offering, the Company sold to the Underwriters, for nominal
consideration, an option to purchase 50,000 Units consisting of 100,000 shares
of Common Stock and 100,000 Class A Warrants (the 'Underwriters' Unit Purchase
Option'). The Underwriters' Unit Purchase Option will be exercisable commencing
one year from the Effective Date of the Company's Initial Public Offering and
ending four (4) years from such date, at an exercise price of $19.80 per Unit
subject to certain adjustments. The holders of the Underwriters' Unit Purchase
Option will have the opportunity to profit from a rise in the market price of
the Units, Warrants and/or Common Stock, if any, without assuming the risk of
ownership. The Company may find it more difficult to raise additional equity
capital if it should be needed for the business of the Company while the
Underwriters' Unit Purchase Option is outstanding. At any time when the holders
thereof might be expected to exercise them, the Company would probably be able
to obtain additional capital on terms more favorable than those provided by the
Underwriters' Unit Purchase Option.

17. Possible Adverse Effects of Ownership of Preferred Stock by PMF. The
Company's Certificate of Incorporation, as amended, authorizes the issuance of a
maximum of 10,000,000 shares of Preferred Stock on terms that may be fixed by
the Company's Board of Directors without further stockholder action. 5,000,000
shares of Preferred Stock have been issued by the Company to PMF, a company
wholly-owned and controlled by Barry Gersten. Pursuant to the Certificate of
Designation each share of stock possesses one vote on all matters upon which
common shareholders are entitled to vote. Although the Preferred Stock does not
possess any dividend rights, ownership of the Preferred Stock will continue to
afford PMF voting control over the affairs of the Company since PMF will hold a
majority of all outstanding voting shares of the Company. However, PMF granted a
five (5) year voting trust over the Preferred Stock to Reginald Spinello, Daniel
Durchslag and Lawrence Simon, commencing on May 1, 1996. Any transfer of the

Preferred Stock by PMF could result in a change of control of the Company. See
'Description of Securities--Preferred Stock.'

18. 'Penny Stock' Regulations May Impose Certain Restrictions on
Marketability of Securities. The Securities and Exchange Commission (the
'Commission') has adopted regulations which generally define'penny stock' to be
any security that has a market price (as defined) less than $5.00 per share or
an exercise price of less than $5.00 per share, subject to certain exceptions.
Therefore, if the market price of the

10
<PAGE>
Common Stock is less than $5.00 per security, then such security would fall
within the definition of 'penny stock.' Since the securities offered hereby are
authorized for quotation on the NASD OTC Bulletin Board, such securities are not
exempt from the definition of 'penny stock.' The Company's securities may become
subject to rules that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000, or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a risk
disclosure document mandated by the Commission relating to the penny stock
market. The broker-dealer must also disclose the commission payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the 'penny stock' rules may
restrict the ability of broker-dealers to sell the Company's securities and may
affect the ability of purchasers in this Offering to sell the Company's
securities in the secondary market and the price at which such purchasers can
sell any such securities.

19. No Dividends. The Company has not paid any dividends on its Common
Stock since its inception and does not intend to pay dividends on its Common
Stock in the foreseeable future. Any earnings which the Company may realize in
the foreseeable future will be retained to finance the growth of the Company.
See 'Dividend Policy.'

20. Limitation on Director Liability. As permitted by Delaware corporation
law, the Company's Certificate of Incorporation limits the liability of
Directors to the Company or its stockholders to monetary damages for breach of a
Director's fiduciary duty except for liability in certain instances. As a result
of the Company's charter provision and Delaware law, stockholders may have a
more limited right to recover against Directors for breach of their fiduciary
duty other than as existed prior to the enactment of the law. See 'Description
of Securities--Limitation on Liability of Directors.'

21. Shares Eligible for Future Sale May Adversely Affect the

Market. 2,850,000 of the Company's currently outstanding shares of Common Stock
are 'restricted securities' and, in the future, may be sold upon compliance with
Rule 144, adopted under the Securities Act of 1933, as amended. Rule 144
provides, in essence, that a person holding 'restricted securities' for a period
of one (1) year may sell only an amount every three (3) months equal to the
greater of (a) one percent (1%) of the Company's issued and outstanding shares,
or (b) the average weekly volume of sales during the four (4) calendar weeks
preceding the sale. The amount of 'restricted securities' which a person who is
not an affiliate of the Company may sell is not so limited, since non-affiliates
may sell without volume limitation their shares held for two (2) years if there
is adequate current public information available concerning the Company.
Immediately prior to the Effective Date, the Company will have 4,000,000 shares
of its Common Stock issued and outstanding, of which (i) 2,850,000 shares are
'restricted securities', all of which are eligible for resale in April 1998 and
(ii) 2,350,000 shares of which are being registered under the Registration
Statement of which this Prospectus forms a part.

Prospective investors should be aware that the possibility of sales may, in
the future, have a depressive effect on the price of the Company's Common Stock
in any market which may develop, and therefore, the ability of any investor to
market his shares may be dependent directly upon the number of shares that are
offered and sold. Affiliates of the Company may sell their shares during a
favorable movement in the market price of the Company's Common Stock which may
have a depressive effect on its price per share. See 'Description of
Securities.'

22. Anti-Takeover Effect of General Corporation Law of Delaware. The
Company is governed by the provisions of Section 203 of the General Corporation
Law of Delaware, an anti-takeover law enacted in 1988. As a result of Section
203, potential acquirors of the Company may be discouraged from attempting to
effect acquisition transactions with the Company, thereby possibly depriving
holders of the Company's securities of certain opportunities to sell or
otherwise dispose of such securities at above-market prices pursuant to such
transactions. See 'Description of Securities.'

23. Limitation on Use of Tax Loss Carryforwards. As of June 30, 1997 the
Company had a net operating loss carryforward of approximately $38,000 which
expires in 2012 and a capital loss carryforward of approximately $443,000 which
expires in 2004. In the event of a sale of the 2,350,000 shares of Common Stock
and the 2,350,000 Class A Warrants included in this Registration Statement,
there could result an 'ownership change' as defined in Section 382 of the
Internal Revenue Code of 1986, as amended (the 'Code'), and the Temporary
Treasury Regulations promulgated thereunder. As a result of the ownership change
caused by a sale of the securities, the Company's use of its net operating and
capital loss carryforwards to offset taxable income and capital gains in any
post-change period would be subjected to an annual limitation.

<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
30, 1997. The table is not adjusted to give effect to the exercise of the Class
A Warrants, the Underwriters' Unit Purchase Option or any other outstanding
warrants or options. This table should be read in conjunction with the Financial
Statements of the Company, including the notes thereto, appearing elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
ACTUAL(1)
----------
<S> <C>
Notes Payable....................................................................................... $ 200,000
STOCKHOLDERS' EQUITY:
Common Stock, $.0001 par value per share, 25,000,000 shares authorized, 4,000,000 issued and
outstanding....................................................................................... $ 400
Preferred Stock, $.0001 par value per share, 10,000,000 shares authorized, 5,000,000 issued and
outstanding....................................................................................... $ 500
Additional paid-in capital.......................................................................... $3,145,441
Deficit............................................................................................. $ (523,531)
Unrealized gain on available for sale investments................................................... $ 10,088
TOTAL STOCKHOLDERS' EQUITY.......................................................................... $2,632,898
----------
TOTAL CAPITALIZATION................................................................................ $2,832,898
----------
----------
</TABLE>
- ------------------
(1) The Company will receive no proceeds from the resale of the 2,350,000 shares
of Common Stock, 2,350,000 Class A Warrants and 2,350,000 shares of Common
Stock issuable upon exercise of the Class A Warrants offered hereby. No
costs will be incurred by the Company in connection with the Offering.

DIVIDEND POLICY

Holders of the Company's Common Stock are entitled to dividends when, as
and if declared by the Board of Directors out of funds legally available
therefore. The Company has not in the past and does not currently anticipate the
declaration or payment of any dividends in the foreseeable future. The Company
intends to retain earnings, if any, to finance the development and expansion of
its business. Future dividend policy will be subject to the discretion of the
Board of Directors and will be contingent upon future earnings, if any, the
Company's financial condition, capital requirements, general business conditions
and other factors. Therefore, there can be no assurance that any dividends of
any kind will ever be paid.

<PAGE>
SELECTED FINANCIAL INFORMATION

SUMMARY STATEMENT OF OPERATIONS(1)

<TABLE>
<CAPTION>
PERIOD
APRIL 24, 1996
YEAR ENDED (INCEPTION) TO
JUNE 30, 1997 JUNE 30, 1996
------------- --------------
<S> <C> <C>
Revenues............................................................................ $ 4,628,129 $ 857,398
Gross Profit........................................................................ $ 399,653 $ 119,358
Operating (Loss) Income............................................................. $ (67,455) $ 48,389
Loss on Sale of Securities.......................................................... $ (422,586) $ --
Interest expense (net).............................................................. $ (28,479) $ --
Net (Loss) Income................................................................... $ (558,720) $ 35,189
Net (Loss) Income Per Share......................................................... $ (0.15) $ 0.01
Weighted Average Number of Common Shares Outstanding................................ 3,663,014 3,500,000
</TABLE>

SUMMARY BALANCE SHEET DATA

<TABLE>
<CAPTION>
JUNE 30, 1997
-------------
<S> <C>
Working Capital .................................................................... $ 1,463,968
Total Assets........................................................................ $ 5,221,535
Total Liabilities................................................................... $ 2,588,637
(Deficit)........................................................................... $ (523,531)
Stockholders' Equity................................................................ $ 2,632,898
</TABLE>

- ------------------
(1) No costs will be incurred by the Company in connection with the resale of

the 2,350,000 shares, 2,350,000 Class A Warrants and 2,350,000 shares
issuable upon exercise of the Class A Warrants offered hereby.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Fiscal Year 1997

Net sales for the fiscal year ended June 30, 1997 were approximately
$4,628,000. Approximately 87% of these sales were derived from PDK Labs Inc.
('PDK'). Net sales for the period April 24, 1996 (inception) to June 30, 1996
approximated $857,000. The increase in sales volume is a result of the
completion of the Company's manufacturing facility in 1997. The Company was in
the development stage for the period ended June 30, 1996. The gross profit on
these sales approximated $400,000 for the fiscal year ended June 30, 1997 and
$119,000 for the period ended June 30, 1996.

Selling, general and administrative expenses approximated $467,000 (10% of
sales) for the fiscal year ended June 30, 1997 and $71,000 (8% of sales) for the
period April 24, 1996 (inception) to June 30, 1996. The increase in selling,
general and administrative expenses is principally attributable to the Company
having fully commenced operations during fiscal year end June 30, 1997.

On May 14, 1996, the Company entered into a three year Supply Agreement
with PDK, which provides for the Company to supply PDK with vitamins and dietary
supplements in bulk tablet form. The agreement, as amended, provides for PDK to
purchase certain products at specified prices. PDK agreed to purchase products
having a minimum aggregate sales price of $2,500,000 per year during the term of
the agreement. In the event that PDK fails to purchase the minimum amount of
products in any year, the Company will be paid up to $100,000 on a pro-rated
basis as liquidated damages.

On May 31, 1996, the Company agreed to supply Compare Generiks, Inc.
('CGI') with vitamins in bulk tablet form at the Company's cost plus 15 percent.
As of September 15, 1997, there have been no sales to CGI.

As of March 31, 1997, the Company in three separate transactions sold all
of its common stock of CGI. In connection with the sale of such shares, the
Company received an aggregate of $700,000 in proceeds and realized a loss of
$450,000.

The Company entered into a Management Agreement with PDK, which provides
for PDK to supply the Company with certain management services in consideration
for the payment by the Company of a management fee of $10,000 per month.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1997, the Company had working capital of approximately
$1,464,000.

The Company's statement of cash flows reflects cash used in operating
activities of approximately ($852,000) primarily due to a net loss of
approximately ($559,000) and increase in operating assets such as accounts
receivable ($775,000), inventories ($1,545,000), and other assets ($101,000)

offset by an increase in accounts payable ($1,615,000), a loss on the sale of
investment ($443,000) and an adjustment for depreciation and amortization
expense of ($121,000).

The statement also reflects net cash used in investing activities of
approximately ($871,000) which is attributable to the purchase of marketable
securities ($1,497,000) and the acquisition of property and equipment ($819,000)
offset by proceeds from the sale of investments ($1,445,000).

Cash provided by financing activities is approximately ($1,541,000) which
reflects net proceeds from the initial public offering ($1,841,000) offset by
repayment of bridge notes ($300,000).

The Company intends to use approximately $1,300,000 of the net proceeds to
expand its manufacturing activities by acquiring additional production equipment
and implement sales and marketing plans which include promotional materials,
trade shows and advertising through magazines.

The Company expects to meet its cash requirements from operations,
available-for-sale securities, current cash reserves, and its existing financing
arrangements.

14
<PAGE>
BUSINESS

GENERAL

PMF, a company wholly owned and controlled by Barry Gersten, the Company's
founder, maintains a passive investment interest in the Company and has granted
a voting trust on the 5,000,000 shares of preferred stock held by PMF to three
(3) of the Company's directors.

PMF is offering 2,350,000 shares of Common Stock, 2,350,000 Class A
Warrants and 2,350,000 shares of Common Stock issuable upon the exercise of the
Class A Warrants for sale in this Offering and is hereinafter referred to as the
'Selling Securityholder' or 'PMF.'

15
<PAGE>
The Company maintains its executive offices at 270 Oser Avenue, Hauppauge,
New York 11788, telephone number (516) 231-0783.

INVESTMENT IN CGI

Although the Company accepted part payment for CGI's subscription for
shares of Common Stock in the Company in the form of shares of common stock of
CGI, the Company does not intend to invest in any other company.

MANUFACTURING

The vitamin production process includes the following stages: testing of
raw materials, pharmacy, blending, compression or encapsulation, coating (where
required) and testing of finished tablets or capsules. The vitamin production
process involves sending the raw materials through each stage of production in
order to form vitamin products.

The principal raw materials needed in the manufacturing process are natural
and synthetic vitamins which are purchased from manufacturers in the United
States, Japan and Europe. The Company can purchase raw materials from numerous
sources and is not dependent on any major supplier.

The Company has one large Gemco blender-mixer and two PK blenders to handle
mixing of dry batches for production. The plant is equipped with tablet presses,
encapsulating machines, and a capsule imprint machine available for customizing
each capsule. Several of the tablet presses have the capability to encode a name
or logo on the tablets based on the punches used. The Company believes that the
capacity of its manufacturing and distribution facility is adequate to meet the
requirements of its current business.

QUALITY CONTROL

All of the Company's products are manufactured in accordance with the Good
Manufacturing Practices of the FDA and all other applicable regulatory
standards. The Company places special emphasis on quality control. All raw
materials and finished products are subjected to sample testing, weight testing,
and purity testing. The Company has adopted formal written quality control
procedures. The Company maintains records on all material testing, production
processes, inspections carried out in the manufacturing process, and labeling
procedures. All products are subject to the Company's rigorous quality control
procedures. The Company maintains a modern well-equipped pharmaceutical
laboratory, that has the capability of adhering to any current and anticipated
regulatory requirements. All raw materials used in production are initially held
in quarantine during which time the Company's quality assurance department assay
the product against the manufacturer's certificate of analysis. Once cleared, a
lot number is assigned, samples are retained and the material is processed by
formulating, blending, compressing or encapsulating and where required, coating
operations. Throughout the manufacturing process the quality control department
conducts 'in process' testing procedures. After tablets or capsules are
manufactured, the quality assurance department tests for weight, purity,
potency, dissolution and stability.

MARKETING AND DISTRIBUTION STRATEGIES

The Company manufactures a full line of dietary supplements including
vitamins, minerals, herbs and speciality nutritional supplements in bulk tablet
and capsule form, which are marketed to companies, such as PDK and CGI, that

package and sell through many different channels of distribution, including
health food, drug, convenience and mass market stores. In addition, the Company
supplies other manufacturers which 'outsource' a portion of their needs on an
ongoing basis to supplement their own capacities.

The Company has begun working to capitalize on the global opportunities
created by an increasing worldwide recognition of the benefits of dietary
supplements and the perception that 'American made supplements' offer the safest
and highest quality products available The Company is establishing relationships
with brokers, manufacturer representatives and distributors in Canada, Latin
America, Europe and parts of Asia. The Company has started to establish a
network of manufacturer representatives throughout the United States for the
purposes of obtaining new customers who purchase dietary supplements in bulk
tablet and capsule form. Arrangements with brokers and manufacturing
representatives are decided on an individual basis, generally relating to a
region or territory on a month to month basis with commissions ranging up to
five percent (5%) on paid customer invoices.

16
<PAGE>
COMPETITION

The market for dietary supplement products is highly competitive in each of
the Company's existing and anticipated product lines and methods of
distribution. Numerous manufacturers and distributors compete with the Company
for customers throughout the United States and internationally in the bulk
packaged dietary supplement industry, selling products to distributors who
service health food, drug, convenience and mass market stores, companies that
market a branded or generic line of products but do not manufacture these items
('repackagers'), and other manufacturers who 'outsource' a portion of their
needs to supplement their own capacities. Many of the Company's competitors are
substantially larger and more experienced than the Company, have longer
operating histories and have materially greater financial and other resources
than the Company. Many of these competitors are private companies, and
therefore, the Company cannot compare its revenues with respect to the sales
volume of each competitor. The Company's significant competitors include
International Vitamin Corporation and Nature's Bounty both of whom have longer
operating histories and materially greater financial and other resources than
the Company (although, no implication is intended hereby regarding the Company's
industry ranking in comparison to such competitors). There can be no assurance
that the Company will be able to compete successfully with its more established
and better capitalized competitors.

Although certain of the Company's competitors are substantially larger than
the Company and have greater financial resources, the Company believes that it
will compete favorably with other vitamin and dietary supplement companies
because of its access to products, competitive pricing, quality of products, and
sales support.

FINANCING

On May 31, 1996, the Company entered into a revolving credit agreement with
an unrelated third party pursuant to which the Company can borrow up to $200,000
for a period of twenty four (24) months at an interest rate of fifteen percent

(15%) per annum. The Company paid the third party a commitment fee of $2,000
(one percent (1%) of the maximum amount available under the revolving credit
agreement). As of September 19, 1997, the Company had not borrowed any funds
pursuant to the revolving credit agreement. See 'Certain Transactions.'

On June 26, 1996, the Company borrowed $200,000 from PMF (a company
wholly-owned and controlled by Barry Gersten), the Company's founder, at an
annual interest rate of eight percent (8%) pursuant to a promissory note dated
June 26, 1996 repayable on June 25, 1998. See 'Certain Transactions.'

MANAGEMENT AND EMPLOYEES

As of September 19, 1997, the Company employed a total of nineteen (19)
employees on a full time basis (fifteen (15) employees in manufacturing and
sales and four (4) employees in administration and finance). See 'Management'
and 'Executive Compensation.'

The Company has experienced no work stoppages and considers its employee
relations to be satisfactory. The Company's employees are not represented by a
labor union.

GOVERNMENT REGULATION

The processing, formulation, packaging, labeling and advertising of the
Company's products are subject to regulation by one or more federal agencies,
including the Food and Drug Administration ('FDA'), the Federal Trade Commission
('FTC'), the Consumer Product Safety Commission, the United States Department of
Agriculture, and the Environmental Protection Agency. These activities are also
regulated by various agencies of the states and localities in which the
Company's products are sold.

17
<PAGE>
1995. It provides a set of different label requirements for ingredient content
information, and directs the FDA to publish new label regulations for
supplements with a mandatory effective date of December 31, 1996. It makes no
modifications on the requirements and proscriptions regarding health claims for
dietary supplements. The new law also introduced the concept of good
manufacturing practices to the manufacture of dietary supplements. At this time,
it would be premature to predict its overall impact on the dietary supplement
industry.

The Company cannot determine what effect this proposed rule-making, or
other governmental regulations or administrative orders, when and if

promulgated, would have on its business in the future. They could, however,
require the reformulation of certain products to meet new standards, require the
recall or discontinuance of certain products not capable of reformulation, or
impose additional recordkeeping, expanded documentation of the properties of
certain products, expanded or different labeling, and scientific substantiation.
Any or all of such requirements could adversely affect the Company's operations
and its financial condition. See 'Risk Factors--Government Regulations.'

CONFLICT OF INTERESTS

After this Offering, PMF, a company wholly-owned and controlled by Barry
Gersten, will continue to own 0% of the Company's outstanding shares of Common
Stock, 100% of the shares of Series A Preferred Stock of the Company, par value
$.0001 per share (the 'Series A Preferred Stock') and 0% of the Company's
outstanding Class A Warrants. In addition, in June 1996, PMF made a loan of
$200,000 to the Company pursuant to a promissory note. At present, PDK is a
major customer of the Company, accounting for approximately eighty eight percent
(88%) of the Company's total sales revenue through June 30, 1997 and also
supplies certain management and personnel to the Company. In addition, Reginald
Spinello, one of the Company's Directors, holds a management position with PDK.
Daniel Durchslag, one of the Company's Directors, is also a Director of CGI, a
customer and stockholder of the Company. Reginald Spinello and Daniel Durchslag,
together with Lawrence Simon, have voting power over more than fifty percent
(50%) of the Common Stock and Preferred Stock of the Company pursuant to a
voting trust agreement with PMF. It is anticipated that PDK will continue to
purchase a significant percentage of the Company's products, at or near its
minimum requirement of $2,500,000 per annum. Because of PMF's ownership interest
in the Company, PMF's role as a creditor of the Company, the identity of certain
management, the voting control of certain management over PMF's Preferred Stock,
CGI's role as a customer and stockholder of the Company, and PDK's role as a
significant customer to the Company, certain conflicts of interest may occur
between the Company and PMF, CGI or PDK.

PRODUCT LIABILITY INSURANCE

The Company, like other manufacturers of products that are ingested, faces
inherent risk of exposure to product liability claims. Accordingly, currently
the Company maintains product liability insurance as a named insured on each of
its suppliers' policies. The Company requires that its suppliers have minimum
coverage of $1,000,000 and that the Company is named insured on the policy.
While management believes that its insurance coverage is adequate, there can be
no assurance that any judgment against the Company will not exceed liability
coverage. A judgment significantly in excess of the amount of insurance coverage
would have a material adverse effect on the Company.

FACILITIES

The Company's headquarters, plant operations, warehousing and shipping
facilities are housed in a modern forty thousand (40,000) square foot building.
The Company leases the building pursuant to a lease which expires on October 14,
1998. The lease provides for no rental payments from May 1996 through August
1996 and monthly rental payments ranging from $19,167 to $23,000 thereafter
through October 1998. In the judgment of management, the lease with the Landlord
reflects a rent at current fair market value.

LITIGATION

There is no material litigation pending or threatened against the Company
nor are there any such proceedings to which the Company is a party.

18
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The names and ages of the directors, executive officers and significant
employees, and promoters of the Company are set forth below.

<TABLE>
<CAPTION>
NAME AGE POSITION HELD
- ------------------------------------------------ --- ------------------------------------------------
<S> <C> <C>
Lawrence D. Simon............................... 31 President, Chairman, Chief Financial Officer and
Director
Reginald Spinello............................... 43 Director
Matthew L. Harriton............................. 33 Director and Secretary
Dr. Daniel Durchslag............................ 53 Director
</TABLE>

BACKGROUND OF EXECUTIVE OFFICERS AND DIRECTORS

Lawrence D. Simon has been the President, Chairman, Chief Financial Officer
and a Director of the Company since May 1, 1996. He was the National Sales
Director for Futurebiotics, Inc. ('Futurebiotics') from October 1, 1995, until
his resignation on April 30, 1996. Futurebiotics distributes, markets and sells
vitamins, minerals, herbal formulations and specialty nutritional supplements
principally to health food stores through regional distributors. Prior to
joining Futurebiotics Mr. Simon was Regional Sales Manager for PDK Labs Inc.,
(from April 10, 1992 to September 30, 1995). Prior to PDK Labs Inc., Mr. Simon
was President of LDS Products Inc. (from March 1990 to March of 1991). LDS
Products Inc., is a brokerage corporation specializing in sales to wholesale
companies in Eastern Europe. Prior to LDS Products Inc., Mr. Simon was an
Auditor with Coopers & Lybrand LLP (from December 1988 to March 1990). He is a
graduate of Cleveland State University with a Bachelors Degree in Business
Administration.

Reginald Spinello has been a Director of the Company since May 1, 1996. He
has been the President and a Director of Futurebiotics since its formation in
March, 1994. Futurebiotics distributes, markets and sells vitamins, minerals,
herbal formulations and specialty nutritional supplements principally to health
food stores through regional distributors. In addition, he is the Executive Vice
President of PDK Labs Inc., a position he has held since September 1993. Mr.
Spinello joined PDK Labs Inc. in September 1991 as Vice President of Operations.
Prior to joining PDK Labs Inc. Mr. Spinello was President and Founder of
Internal Reinforcements from 1985 to 1991, a specialty distributor and marketer
of natural vitamins and supplements. Prior to Internal Reinforcements, Mr.

Spinello was Founder and President of Superior Supplements (a company with no
affiliation to the Company). Mr. Spinello sold his entire interest in this
company in 1985 and the company was dissolved in 1992. Mr. Spinello graduated
from Bryant College with a B.S. Degree in Business Administration. Additionally,
he has studied in the field of nutrition and is a non-practicing nutrition
consultant. See 'Risk Factors--Conflicts of Interest.'

Matthew L. Harriton has been a Director and Secretary of the Company since
May 1, 1996. He has also been a director of Decor Group, Inc., a manufacturer
and marketer of wall, table and freestanding sculptures since March 1996. Mr.
Harriton has been the Chief Financial Officer of Embryo Development Corporation
since January 1996 and the Chief Executive Officer since April 1997. Embryo
Development Corporation is a public company which specializes in developing and
distributing medical devices. Prior to joining Embryo Development Corporation,
Mr. Harriton's professional experience included positions at CIBC Wood Gundy
Securities Corporation as an associate (from June 1994 to December 1995),
Coopers & Lybrand as a senior associate (from December 1990 to May 1994), and
The First Boston Corporation as a senior accountant (from June 1986 to May
1988). Mr. Harriton has also served as a director of Perry's Majestic Beer, Inc.
since January 1996, a company involved in the microbrewery industry. He is a
graduate of Lehigh University and received his M.B.A. from Duke University's
Fuqua School of Business.

Dr. Daniel Durchslag, DDS. has been a Director of the Company since May 1,
1996 and has practiced General Cosmetic and Sports Dentistry in Beverly Hills,
California since 1980. From 1973 until 1979, he was an Associate Professor and
Director of Clinics at the University of Southern California School of
Dentistry. He is a graduate of the University of Wisconsin and Loyola
University/Chicago College of Dental Surgery. He is

19
<PAGE>
presently team dentist for the Oakland Raiders. In addition, he has been a
Director of CGI since October 1995. See 'Risk Factors--Conflicts of Interest.'

There are no family relationships between the officers and directors of the
Company.

EXECUTIVE COMPENSATION

Details of the cash or other compensation paid or accrued by the Company to
or on behalf of the Company's President, Chairman and Chief Financial Officer of
the Company since its formation to the end of the Company's fiscal year, June
30, 1997, are set forth in the tables listed below. Each director of the Company
is entitled to receive reasonable out-of-pocket expenses incurred in attending
meetings of the Board of Directors of the Company. The members of the Board of
Directors intend to meet at least quarterly during the Company's fiscal year,
and at such other times duly called.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION

------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ---------- --------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED ALL
OTHER STOCK LTIP OTHER
ANNUAL AWARDS OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS COMPENSATION ($) SARS(#) ($) ($)
- ------------------------------- ---- --------- ------ ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence Simon, President 1997 $ 75,000 $5,833 $ -0- $ -0- -0- $ -0- $ -0-
1996 $ 12,692 $ -0- $ -0- $ -0- 100,000(1) $ -0- $ -0-
</TABLE>

(1) Represents issuance of options to acquire 100,000 shares of common stock at
$6.00 per share exercisable one year from the effective date of the Initial
Public Offering.

AGGREGATED OPTION/SAR EXERCISES -
AND FY-END OPTION/SAR VALUES
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------------- --------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Lawrence Simon, President -0- -0- -0-/100,000 $-0-/-0- (2)
</TABLE>

(2) The exercise price of the options is $6.00 per share.

20
<PAGE>
EMPLOYMENT AGREEMENTS

As of May 1, 1996, the Company entered into a one (1) year employment
agreement with Lawrence D. Simon, pursuant to which Mr. Simon serves as the
Company's President. The agreement provides for Mr. Simon to receive a salary of
$75,000 per annum. In addition, Mr. Simon has been granted an option to purchase
100,000 shares of the outstanding Common Stock of the Company exercisable (i) at
an exercise price equal to the public offering price of the shares of Common
Stock of the Company included in the Units offered for sale in the Initial
Public Offering commencing one year from the effective date of the Initial
Public Offering, and (ii) only at a time when Mr. Simon is employed by the
Company. The agreement can be terminated by the Company, with or without cause,

upon ninety (90) days' notice and contains prohibitions on the disclosure of
confidential information and covenants not to compete with the Company which
survive any such termination. In April 1997, the Company entered into an amended
agreement to Mr. Simon's employment agreement, pursuant to which Mr. Simon's
term of employment was extended for a further year.

1996 STOCK PLAN

In June 1996, the Board of Directors of the Company adopted, and the
stockholders of the Company approved the adoption of, the 1996 Stock Plan
(hereinafter called the '1996 Plan'). The purpose of the 1996 Plan is to provide
an incentive and reward for those executive officers and other key employees in
a position to contribute substantially to the progress and success of the
Company, to closely align the interests of such employees with the interests of
stockholders of the Company by linking benefits to stock performance and to
retain the services of such employees, as well as to attract new key employees.
In furtherance of that purpose, the 1996 Plan authorizes the grant to executives
and other key employees of the Company and its subsidiaries of stock options,
restricted stock, deferred stock, bonus shares, performance awards, dividend
equivalent rights, limited stock appreciation rights and other stock-based
awards, or any combination thereof. The 1996 Plan is expected to provide
flexibility to the Company's compensation methods, after giving due
consideration to competitive conditions and the impact of federal tax laws.

The maximum number of shares of Common Stock with respect to which awards
may be granted pursuant to the 1996 Plan is initially 2,000,000 shares. Shares
issuable under the 1996 Plan may be either treasury shares or authorized but
unissued shares. The number of shares available for issuance will be subject to
adjustment to prevent dilution in the event of stock splits, stock dividends or
other changes in the capitalization of the Company.

The 1996 Plan will be administered by a committee consisting of not less
than two (2) members of the Board of Directors who are 'disinterested' within
the meaning of Rule 16b-3 promulgated under the Exchange Act and 'outside
directors' within the meaning of Section 162(m) of the Code (including persons
who may be deemed outside directors by virtue of any transitional rule which may
be adopted by the Internal Revenue Service implementing such Section). The Board
will determine the persons to whom awards will be granted, the type of award
and, if applicable, the number of shares to be covered by the award. During any
calendar year, no person may be granted under the 1996 Plan awards aggregating
more than 100,000 shares (which number shall be subject to adjustment to prevent
dilution in the event of stock splits, stock dividends or other changes in
capitalization of the Company).

Types of Awards

Stock Options. Options granted under the 1996 Plan may be 'incentive stock
options' ('Incentive Options') within the meaning of Section 422 of the Code or
stock options which are not incentive stock options ('Non-Incentive Options'
and, collectively with Incentive Options, hereinafter referred to as 'Options').
The persons to whom Options will be granted, the number of shares subject to
each Option granted, the prices at which Options may be exercised (which shall
not be less than the fair market value of shares of Common Stock on the date of
grant), whether an Option will be an Incentive Option or a Non-Incentive Option,

the time or times and the extent to which Options may be exercised and all other
terms and conditions of Options will be determined by the Committee.

Each Incentive Option shall terminate no later than ten (10) years from the
date of grant, except as provided below with respect to Incentive Options
granted to 10% Stockholders (as hereinafter defined). No Incentive

21
<PAGE>
Option may be granted at any time after May 2006. Each Non-Incentive Option
shall terminate not later than fifteen (15) years from the date of grant. The
exercise price at which the shares may be purchased may not be less than the
Fair Market Value of shares of Common Stock at the time the Option is granted,
except as provided below with respect to Incentive Options granted to 10%
Stockholders. Options granted to executive officers may not be exercised at any
time prior to six (6) months after the date of grant.

The exercise price of an Incentive Option granted to a person possessing
more than 10% of the total combined voting power of all shares of stock of the
Company or a parent or subsidiary of the Company ('10% Stockholder') shall in no
event be less than 110% of the Fair Market Value of the shares of the Common
Stock at the time the Incentive Option is granted. The term of an Incentive
Option granted to a 10% Stockholder shall not exceed five (5) years from the
date of grant.

The exercise price of the shares to be purchased pursuant to each Option
shall be paid (i) in full in cash, (ii) by delivery (i.e., surrender) of shares
of the Company's Common Stock owned by the optionee at the time of the exercise
of the Option, (iii) in installments, payable in cash, if permitted by the
Committee or (iv) any combination of the foregoing. The stock-for-stock payment
method permits an optionee to deliver one (1) or more shares of previously owned
Common Stock of the Company in satisfaction of the exercise price of subsequent
Options. The optionee may use the shares obtained on each exercise to purchase a
larger number of shares on the next exercise. (The foregoing assumes an
appreciation in value of previously acquired shares). The result of the
stock-for-stock payment method is that the optionee can generally avoid
immediate tax liability with respect to any appreciation in the value of the
stock utilized to exercise the Option.

Shares received by an optionee upon exercise of a Non-Incentive Option may
not be sold or otherwise disposed of for a period determined by the Board upon
grant of the Option, which period shall be not less than six (6) months nor more
than three (3) years from the date of acquisition of the shares (the 'Restricted
Period'), except that, during the Restricted Period (i) the optionee may offer
the shares to the Company and the Company may, in its discretion, purchase up to
all the shares offered at the exercise price and (ii) if the optionee's
employment terminates during the Restricted Period (except in limited
instances), the optionee, upon written request of the Company, must offer to
sell the shares to the Company at the exercise price within seven (7) business
days. The Restricted Period shall terminate in the event of a Change in Control
of the Company (as defined), or at the discretion of the Board. After the
Restricted Period, an optionee wishing to sell must first offer such shares to
the Company at the Fair Market Value.

Limited Stock Appreciation Rights. The Committee is authorized, in
connection with any Option granted under the 1996 Plan, to grant the holder of
such Option a limited stock appreciation right ('LSAR'), entitling the holder to
receive, within sixty (60) days following a Change in Control, an amount in cash
equal to the difference between the exercise price of the Option and the market
value of the Common Stock on the effective date of the Change in Control. The
LSAR may be granted in tandem with an Option or subsequent to grant of the
Option. The LSAR will only be exercisable to the extent the related Option is
exercisable and will terminate if and when the Option is exercised.

Restricted and Deferred Stock. An award of restricted stock or deferred
stock may be granted under the 1996 Plan. Restricted stock is subject to
restrictions on transferability and other restrictions as may be imposed by the
Committee at the time of grant. In the event that the holder of restricted stock
ceases to be employed by the Company during the applicable restrictive period,
restricted stock that is at the time subject to restrictions shall be forfeited
and reacquired by the Company. Except as otherwise provided by the Committee at
the time of grant, a holder of restricted stock shall have all the rights of a
stockholder including, without limitation, the right to vote restricted stock
and the right to recover dividends thereon. An award of deferred stock is an
award that provides for the issuance of stock upon expiration of a deferral
period established by the Committee. Except as otherwise determined by the
Committee, upon termination of employment of the recipient of the award during
the applicable deferral period, all stock that is at the time subject to
deferral shall be forfeited. Until such time as the stock which is the subject
of the award is issued, the recipient of the award has no rights as a
stockholder.

Dividend Equivalent Awards. A dividend equivalent gives the recipient the
right to receive cash or other property equal in value to the dividends that
would be paid if the recipient held a specified number of shares of Common
Stock. A dividend equivalent right may be granted as a component of another
award or as a free standing award.

22
<PAGE>
Bonus Shares and other Share Based Awards. The 1996 Plan authorizes the
Committee to grant shares as a bonus, or to grant shares or other awards in lieu
of obligations of the Company to pay cash under other plans or compensatory
arrangements, upon such terms as shall be determined by the Committee. The 1996
Plan also authorizes the Committee to grant other forms of awards based upon,
payable in, or otherwise related in whole or in part to, Common Stock,
including, without limitation, convertible or exchangeable debentures or other
debt securities, other rights convertible or exchangeable into shares, purchase
rights for shares, awards contingent upon performance of the Company, and awards
valued by reference to the book value of shares of Common Stock or awards
determined by reference to the value of securities of, or the performance of,
specified subsidiaries.

PRINCIPAL STOCKHOLDERS

The following table sets forth information as of the date of this
Prospectus with respect to the beneficial ownership of the Company's outstanding
voting securities by (i) any holder of more than five percent (5%) of the

outstanding shares; (ii) the Company's officers and directors; and (iii) the
directors and officers of the Company as a group:

<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL SHARES OF COMMON PERCENTAGE (%) OF SHARES OF PERCENTAGE (%) TOTAL
OWNER(1) STOCK OWNED COMMON STOCK PREFERRED STOCK COMBINED VOTE
- ------------------------------- ---------------- ----------------- --------------- --------------------
<S> <C> <C> <C> <C>
PMF, Inc.(2)(3)................ 2,350,000 58.8 5,000,000 81.7
Compare Generiks, Inc.(4)...... 500,000 12.5 0.0 5.6
Lawrence D. Simon(2)(5)(6)..... 0.0 0.0 5,000,000 55.6
Reginald Spinello(2)(6)........ 0.0 0.0 5,000,000 55.6
Matthew L. Harriton(2)......... 0.0 0.0 0.0 0.0
Dr. Daniel Durchslag(2)(6)..... 0.0 0.0 5,000,000 55.6
All officers and directors as a
group (four (4)
persons)(6).................. 0.0 0.0 5,000,000 55.6
</TABLE>

- ------------------
(1) Beneficial ownership as reported in the table above has been determined in
accordance with Instruction (b1) to Item 403 of Regulation S-B of the
Securities Exchange Act.

(2) The address of each stockholder shown above is c/o Superior Supplements,
Inc., 270 Oser Avenue, Hauppauge, NY 11788.

(3) PMF, Inc., a corporation wholly owned by Barry Gersten, the founder of the
Company, is record holder of such shares. Mr. Gersten may be deemed to hold
sole investment and voting power over such shares. Does not include
2,350,000 shares of Common Stock issuable upon exercise of 2,350,000 Class A
Warrants. All of the shares of Common Stock, Class A Warrants and shares of
Common Stock issuable upon exercise of the Class A Warrants owned by PMF,
Inc. are being registered in this Offering.

(4) The address of Compare Generiks, Inc. is 300 Oser Avenue, Hauppauge, New
York 11788.

(5) Does not include an option to purchase 100,000 shares of Common Stock which
is not exercisable for one year from the effective date of the Initial
Public Offering.

(6) Includes 5,000,000 shares of Preferred Stock owned by PMF, Inc. PMF, Inc.
granted a voting trust on May 1, 1996 for a period of five (5) years to
Lawrence D. Simon, Reginald Spinello and Dr. Durchslag. Any disagreement is
to be resolved by the vote of a majority of the trustees. Accordingly, each
of them may be deemed to hold voting power over such shares. PMF, Inc. has
retained all other rights of beneficial ownership in such shares.

23
<PAGE>
CERTAIN TRANSACTIONS

On April 24, 1996, the Company was formed in the State of Delaware.

On April 24, 1996, PMF, Inc., a company wholly-owned and controlled by
Barry Gersten, acquired (i) (a) 3,000,000 shares of Common Stock of the Company,
par value $.0001 per share, and (b) 3,000,000 Class A Warrants for a cash
consideration of $50,000, and (ii) 5,000,000 shares of Series A Preferred Stock
of the Company, par value $.0001, per share, for a cash consideration of $5,000.
The Series A Preferred Stock has no dividend rights and has a liquidation right
of $.02 per share. Each share of Series A Preferred Stock shall be entitled to
one (1) vote per share on all matters presented to stockholders of the Company.
See 'Description of Securities.' Each Class A Warrant entitles the holder to
purchase one (1) share of Common Stock of the Company at the Initial Public
Offering price, commencing one (1) year after the effective date of the Initial
Public Offering. Simultaneously with the Initial Public Offering, PMF, the
Selling Securityholder in this Offering, also completed an underwritten public
offering of securities by selling 325,000 Units consisting of 650,000 shares of
Common Stock and 650,000 Class A Warrants to purchase an additional 650,000
shares of Common Stock. The Company did not receive any of the proceeds of the
sale of securities by PMF.

On May 1, 1996 PMF, Inc. granted a voting trust for a period of five (5)
years to Lawrence D. Simon, Reginald Spinello and Dr. Daniel Durchslag over the
5,000,000 Preferred Shares owned by PMF, Inc. The voting trust provides for the
majority decision to control the vote in the event of any disagreement between
the trustees.

On May 14, 1996, the Company entered into an agreement to supply PDK Labs
Inc. with vitamins and dietary supplements in bulk tablet form (the 'PDK
Agreement'). The agreement, as amended, provides for PDK Labs Inc. to purchase
certain products at specified prices. PDK Labs Inc. agreed to purchase products
having a minimum aggregate sales price of $2,500,000 per annum for each year
during the term of the PDK Agreement. In the event that PDK Labs Inc. fails to
purchase the minimum amount of products in any year, the Company will be paid
$100,000 as liquidated damages (pro-rated by reference to the percentage of said
minimum amount purchased during the related year). The term of the PDK Agreement
is for a period of three (3) years, automatically renewable for successive one
(1) year terms. Sales to PDK approximated 87% of total sales for the year ended
June 30, 1997. See 'Risk Factors--Conflicts of Interest.'

On May 31, 1996, the Company agreed to exclusively supply Compare Generiks,
Inc. with vitamins in bulk tablet form (other than any vitamins sold under the
'Energex' trade mark or as part of the 'Energex' product line) at the Company's
cost plus fifteen percent (15%) pursuant to a supply agreement between the
Company and Compare Generiks, Inc. (the 'Compare Agreement'). The term of the
Compare Agreement is for a period of three (3) years, automatically renewable
for successive one (1) year terms. As of September 15, 1997, there have been no
sales to Compare Generiks, Inc. See 'Risk Factors--Conflicts of Interest.'

On May 31, 1996, Compare Generiks, Inc., acquired 500,000 shares of Common
Stock of the Company (14.29% of the issued and outstanding shares of Common
Stock prior to the Initial Public Offering), par value $.0001 per share (i) for
a cash consideration of $100,000, and (ii) in consideration of the issuance of
200,000 shares of common stock of Compare Generiks, Inc. In June, 1996, a
registration statement filed by Compare Generiks, Inc. was declared effective by

the Securities and Exchange Commission registering the 200,000 shares of common
stock owned by the Company. The Company, in three separate transactions, sold
all of its shares of common stock of Compare Generiks, Inc. In connection with
the sale of such shares, the Company received an aggregate of $700,000 in
proceeds.

In June, 1996, the Company borrowed $200,000 from PMF, Inc., the Company's
founder, at an annual interest rate of eight percent (8%) pursuant to a
promissory note dated June 26, 1996, repayable on June 25, 1998.

On July 21, 1997, the Company entered into a management agreement with PDK
Labs Inc. pursuant to which PDK Labs Inc. agreed to supply certain management
services to the Company in consideration for the payment by the Company of a
management fee of $10,000 per month.

The Company believes that all transactions with PDK Labs Inc., Compare
Generiks, Inc. and officers or shareholders of the Company and their affiliates
were made on terms no less favorable to the Company than those available from
unaffiliated parties. The Company intends that in the future any such
transactions shall also be made on terms no less favorable than those available
from unaffiliated parties.

24
<PAGE>
DESCRIPTION OF SECURITIES

The Selling Securityholder is offering 2,350,000 shares of Common Stock,
par value $.0001 per share, 2,350,000 Class A Warrants and 2,350,000 shares of
Common Stock issuable upon exercise of the Class A Warrants.

COMMON STOCK

The Company is authorized to issue up to 25,000,000 shares of Common Stock,
of which 4,000,000 shares will be issued and outstanding as of the date of this
Prospectus. All of the issued and outstanding shares of Common Stock will be
fully paid, validly issued and non-assessable.

Subject to the rights of holders of Preferred Stock, if any, holders of
shares of Common Stock of the Company are entitled to share equally on a per
share basis in such dividends as may be declared by the Board of Directors out
of funds legally available therefor. There are presently no plans to pay
dividends with respect to the shares of Common Stock. See 'Dividend Policy.'
Upon liquidation, dissolution or winding up of the Company, after payment of
creditors and the holders of any senior securities of the Company, including
Preferred Stock, if any, the assets of the Company will be divided pro rata on a
per share basis among the holders of the shares of Common Stock. The Common
Stock is not subject to any liability for further assessments. There are no
conversion or redemption privileges nor any sinking fund provisions with respect
to the Common Stock and the Common Stock is not subject to call. The holders of
Common Stock do not have any pre-emptive or other subscription rights.

Holders of shares of Common Stock are entitled to cast one (1) vote for
each share held at all stockholders' meetings including the annual meeting, for
all purposes, including the election of directors. The Common Stock does not

have cumulative voting rights.

PREFERRED STOCK

The Company's Certificate of Incorporation authorizes 10,000,000 shares of
'blank check' Preferred Stock, whereby the Board of Directors of the Company
shall have the authority, without further action by the holders of the
outstanding Common Stock, to issue shares of Preferred Stock from time to time
in one or more classes or series, to fix the number of shares constituting any
class or series and the stated value thereof, if different from the par value,
and to fix the term of any such series or class, including dividend rights,
dividend rates, conversion or exchange rights, voting rights, rights and terms
of redemption (including sinking fund provisions), the redemption price and the
liquidation preference of such class or series. As of the date of this
Prospectus, there are 5,000,000 shares of Series A Preferred Stock issued and
outstanding. The Company has agreed with the Underwriters of the Initial Public
Offering that it will not issue any additional shares of preferred stock for a
period of twelve (12) months from the date of the Initial Public Offering
without the prior written consent of the Underwriters.

SERIES A PREFERRED STOCK

Designation and Amount; Par Value. The shares of such series are
designated as Series A Preferred Stock and the number of shares constituting
such series is 5,000,000, all of which are issued and outstanding. The Series A
Preferred Stock has $.0001 par value per share.

Dividends. Holders of the Series A Preferred Stock do not have any right
to the payment of any dividend.

Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the shares
of Series A Preferred Stock shall have a liquidation preference in the aggregate
amount of $100,000 or $.02 per share of Series A Preferred Stock.

Voting Rights. Each holder of Series A Preferred Stock shall be entitled
to one (1) vote per share on all matters presented to the stockholders of the
Company.

Rank. The shares of Series A Preferred Stock rank senior to all series of
preferred stock and the Common Stock in all respects.

25
<PAGE>
CLASS A WARRANTS

Each Class A Warrant entitles the holder to purchase one (1) share of
Common Stock at a price of $5.25 per share for a period of four (4) years
commencing one (1) year from the effective date of the Initial Public Offering.
As of the date of this Prospectus, there are 3,500,000 Class A Warrants issued
and outstanding. Each Class A Warrant is redeemable by the Company for $.05 per
Class A Warrant, at any time after February 25, 1998, upon thirty (30) days'
prior written notice, if the closing price of the Common Stock, as reported by
the principal exchange on which the Common Stock is traded, the NASD OTC

Bulletin Board or the National Quotation Bureau Incorporated, as the case may
be, exceeds $10.00 per share for twenty (20) consecutive trading days within a
period of thirty (30) trading days ending on the fifth trading day prior to the
date of the notice of redemption. Upon thirty (30) days' written notice to all
holders of Class A Warrants, the Company shall have the right, subject to
compliance with Rule 13E-4 under the Securities Exchange Act of 1934 and the
filing of Schedule 13E-4 and, if required, a post-effective amendment to this
registration statement, to reduce the exercise price and/or extend the term of
the Class A Warrants.

The Class A Warrants can only be exercised when there is a current
effective registration statement covering the shares of Common Stock underlying
the Class A Warrants. If the Company does not or is unable to maintain a current
effective registration statement, the holders of Class A Warrant certificates
will be unable to exercise the Class A Warrants and the Class A Warrants may
become valueless. Moreover, if the shares of Common Stock underlying the Class A
Warrants are not registered or qualified for sale in the state in which a holder
of Class A Warrant certificates resides, such holder might not be permitted to
exercise the Warrants. See 'Risk Factors--Current Prospectus and State Blue Sky
Registration in Connection with the Exercise of the Warrants.'

Each Class A Warrant may be exercised by surrendering the Warrant
certificate, with the form of election to purchase on the reverse side of the
Class A Warrant certificate properly completed and executed, together with
payment of the exercise price, or $5.25 per share, to the Transfer Agent. The
Class A Warrants may be exercised in whole or from time to time in part. If less
than all of the Class A Warrants evidenced by a Warrant certificate are
exercised, a new Class A Warrant certificate will be issued for the remaining
number of Class A Warrants.

Holders of the Class A Warrants are protected against dilution of the
equity interest represented by the underlying shares of Common Stock upon the
occurrence of certain events, including, but not limited to, issuance of stock
dividends. If the Company merges, reorganizes or is acquired in such a way as to
terminate the Class A Warrants, the Class A Warrants may be exercised
immediately prior to such action. In the event of liquidation, dissolution or
winding up of the Company, holders of the Class A Warrants are not entitled to
participate in the Company's assets.

For the life of the Class A Warrants, the holders thereof are given the
opportunity, at nominal cost, to profit from a rise in the market price of the
Common Stock. The exercise of the Class A Warrants will result in the dilution
of the then book value of the Common Stock of the Company held by the public
investors and would result in a dilution of their percentage ownership of the
Company.

DELAWARE ANTI-TAKEOVER LAW

The Company is governed by the provisions of Section 203 of the General
Corporation Law of Delaware, an anti-takeover law enacted in 1988. In general,
the law prohibits a Delaware public corporation from engaging in a 'business
combination' with an 'interested stockholder' for a period of three (3) years
after the date of the transaction in which the person became an interested
stockholder, unless it is approved in a prescribed manner. As a result of

Section 203, potential acquirors of the Company may be discouraged from
attempting to effect acquisition transactions with the Company, thereby possibly
depriving holders of the Company's securities of certain opportunities to sell
or otherwise dispose of such securities at above-market prices pursuant to such
transactions.

26
<PAGE>
LIMITATION ON LIABILITY OF DIRECTORS

In connection with the Initial Public Offering, the Underwriters of the
Initial Public Offering have agreed to indemnify the Company, its directors, and
each person who controls it within the meaning of Section 15 of the Securities
Act with respect to any statement in or omission from the Registration Statement
or the Prospectus or any amendment or supplement thereto if such statement or
omission was made in reliance upon information furnished in writing to the
Company by the Underwriters specifically for or in connection with the
preparation of the Registration Statement, the Prospectus, or any such amendment
or supplement thereto.

Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers and to purchase insurance with respect
to liability arising out of the performance of their duties as directors and
officers provided that this provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
arising under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal benefit.

The Delaware General Corporation Law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's by-laws, any agreement, vote of stockholders or otherwise.

Article Ninth of the Company's Certificate of Incorporation eliminates the
personal liability of directors to the fullest extent permitted by Section 102
of the Delaware General Corporation Law.

The effect of the foregoing is to require the Company to the extent
permitted by law to indemnify the officers and directors of the Company for any
claim arising against such persons in their official capacities if such person
acted in good faith and in a manner that he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

The Company does not currently have any liability insurance coverage for
its officers and directors.

COMMISSION POLICY

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and other agents of the Company, the Company
has been informed that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.

TRANSFER AGENT & REGISTRAR

The transfer agent and registrar for the Company's securities is American
Stock Transfer & Trust Company (the 'Transfer Agent').

PRIOR COMPANY OFFERING

On February 26, 1997, a Registration Statement under the Act was declared
effective by the Securities and Exchange Commission ('SEC') with respect to an
underwritten public offering (the 'Offering') of (A) 250,000 Units ('Units') by
the Company, and (B) 325,000 Units by PMF, Inc. a company wholly-owned and
controlled by Barry Gersten, and the Company and PMF, Inc. sold the Units
offered thereby. The Units sold by the Company and PMF, Inc. were comprised of
1,150,000 shares of Common Stock and 1,150,000 Class A Warrants to purchase an
additional 1,150,000 shares of Common Stock. Sales of securities under this
Prospectus by the Selling Securityholder or even the potential of such sales may
have an adverse effect on the market price of the Company's securities.

27
<PAGE>
SELLING SECURITYHOLDER

On the date of this Prospectus, a Registration Statement under the Act with
respect to the sale of 2,350,000 shares of Common Stock, 2,350,000 Class A
Warrants and 2,350,000 shares of Common Stock issuable upon exercise of the
Class A Warrants by PMF, Inc. ('PMF'), a company wholly-owned and controlled by
Barry Gersten, (hereinafter referred to as the 'Selling Securityholder') offered
thereby, was declared effective by the Securities and Exchange Commission
('SEC'), and the Selling Securityholder commenced the sale of shares of Common
Stock and Class A Warrants offered thereby. Prior to the sale of the shares of
Common Stock and Class A Warrants offered thereby, PMF owned 2,350,000 shares of
Common Stock, 5,000,000 shares of Series A Preferred Stock and 2,350,000 Class A
Warrants. Following the sale of the Common Stock and Class A Warrants offered
hereby, PMF will own none of the outstanding shares of Common Stock, none of the
outstanding Class A Warrants and 100% of the outstanding Preferred Stock. Sales
of the shares of Common Stock and Class A Warrants under this prospectus by the
Selling Securityholder or even the potential of such sales may have an adverse
effect on the market price of the Company's securities. See 'Risk
Factors--Shares Eligible for Future Sale may Adversely Affect the Market.' The
Company will not receive any of the proceeds of sale of the shares of Common
Stock or Class A Warrants by the Selling Securityholder. In the event the Class
A Warrants offered by PMF are exercised the Company will receive the proceeds of
the exercise of such warrants. The resale of the securities of the Selling
Securityholder are subject to Prospectus delivery and other requirements of the
Securities Act of 1933, as amended (the 'Act').

Sales of securities by the Selling Securityholder or even the potential of
such sales would likely have an adverse effect on the market prices of the
securities offered hereby.

PLAN OF DISTRIBUTION

The securities offered hereby may be sold from time to time directly by the
Selling Securityholder. Alternatively, the Selling Securityholder may from time
to time offer such securities through underwriters, dealers or agents. The
distribution of securities by the Selling Securityholder may be effected in one
or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more broker-dealers for resale of such 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
Securityholder in connection with such sales of securities. The securities
offered by the Selling Securityholder may be sold by one or more of the
following methods, without limitations: (a) a block trade in which a broker or
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers, and (d) faceto-face
transactions between sellers and purchasers without a broker-dealer. In
effecting sales, brokers or dealers engaged by the Selling Securityholder may
arrange for other brokers or dealers to participate. The Selling Securityholder
and intermediaries through whom such securities are sold may be deemed
'underwriters' within the meaning of the Act with respect to the securities
offered, and any profits realized or commissions received may be deemed
underwriting compensation.

At the time a particular offer of securities is made by or on behalf of the
Selling Securityholder, to the extent required, a Prospectus will be distributed
which will set forth the number of shares being offered and the terms of the
Offering, including the name or names of any underwriters, dealers or agents, if
any, the purchase price paid by any underwriter for sales purchased from the
Selling Securityholder and any discounts, commissions or concessions allowed or
reallowed or paid to dealers and the proposed selling price to the public.

28
<PAGE>
LEGAL MATTERS

The validity of the securities being offered hereby will be passed upon for
the Company by Bernstein & Wasserman, LLP, 950 Third Avenue, New York, NY 10022.

EXPERTS

Certain of the financial statements of the Company included in this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their reports, have been examined by Holtz Rubenstein &
Co., LLP, independent certified public accountants, which appear elsewhere
herein and in the Registration Statement.

ADDITIONAL INFORMATION

This Prospectus constitutes part of a Registration Statement on Form SB-2
filed by the Company with the Securities and Exchange Commission (the
'Commission') under the Securities Act and omits certain information contained
in the Registration Statement. Reference is hereby made to the Registration
Statement and to its exhibits for further information with respect to the
Company and the Common Stock and the Class A Warrants offered hereby. Statements
contained herein concerning provisions of documents are necessarily summaries of
such documents, and each statement is qualified in its entirety by reference to
the copy of the applicable document filed with the Commission.

The Registration Statement, including the exhibits thereto, may be
inspected without charge at the public reference facilities maintained by the
Commission at: 450 Fifth Street, Washington, D.C. 20549; and at the offices of
the Commission located at 7 World Trade Center, New York, NY 10048; and copies
of such material may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, Washington, D.C. 20549 at prescribed rates.

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Certified Public Accountants F-1

Financial Statements:

Balance sheet as of June 30, 1997 F-2

Statements of operations for the year ended June 30, 1997
and for the period April 24, 1996 (inception) to
June 30, 1996 F-3

Statement of stockholders' equity for the year ended
June 30, 1997 and for the period April 24, 1996 (inception)
to June 30, 1996 F-4

Statements of cash flows for the year ended June 30, 1997 and
for the period April 24, 1996 (inception) to June 30, 1996 F-5

Notes to financial statements F-6 - F-11

<PAGE>

Independent Auditors' Report

Board of Directors and Stockholders
Superior Supplements, Inc.
Hauppauge, New York

We have audited the balance sheet of Superior Supplements, Inc. as of June 30,
1997, and the related statements of operations, stockholders' equity and cash
flows for the year ended June 30, 1997 and for the period April 24, 1996
(inception) to June 30, 1996. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Superior Supplements, Inc. as
of June 30, 1997 and the results of its operations and its cash flows for the
year ended June 30, 1997 and for the period April 24, 1996 (inception) to June
30, 1996, in conformity with generally accepted accounting principles.

HOLTZ RUBENSTEIN & CO., LLP

Melville, New York
August 4, 1997

F-1

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

BALANCE SHEET

JUNE 30, 1997

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 412,914
Investments in available-for-sale securities 772,496
Accounts receivable (Note 10) 1,167,585
Inventories (Note 3) 1,644,983
Prepaid expenses 45,627
------------
Total current assets 4,043,605

PROPERTY AND EQUIPMENT, net (Note 4) 1,039,583

OTHER ASSETS, net 138,347
------------
$ 5,221,535
============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable and accrued expenses $ 2,376,037
Note payable (Note 6) 200,000
Income taxes payable (Note 9) 3,600
------------
Total current liabilities 2,579,637
------------
DEFERRED TAX LIABILITY (Note 9) 9,000
------------

COMMITMENTS (Note 10)

STOCKHOLDERS' EQUITY: (Notes 5 and 8)
Common stock, $.0001 par value; authorized 25,000,000
shares; 4,000,000 shares issued and outstanding 400
Preferred stock, $.0001 par value; authorized 10,000,000
shares; 5,000,000 shares issued and outstanding 500
Additional paid-in capital 3,145,441
Unrealized gain on available-for-sale investments 10,088
Deficit (523,531)
------------

2,632,898
------------
$ 5,221,535
============

See notes to financial statements

F-2

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

STATEMENTS OF OPERATIONS

Period
April 24, 1996
Year Ended (Inception) to
June 30, 1997 June 30, 1996
------------- -------------
NET SALES (Note 10) $ 4,628,129 $ 857,398
----------- ----------

COSTS AND EXPENSES:

Cost of sales 4,228,476 738,040
Selling, general and administrative (Note 10) 467,108 70,969
----------- ----------
4,695,584 809,009
----------- ----------

OPERATING (LOSS) INCOME (67,455) 48,389
----------- ----------

OTHER INCOME (EXPENSE):

Loss on sale of securities (Note 8) (442,586) --
Interest expense (28,479) --
----------- ----------

(471,065) --
----------- ----------

(LOSS) EARNINGS FROM OPERATIONS
BEFORE INCOME TAX (538,520) 48,389

PROVISION FOR INCOME TAX (Note 9) 20,200 13,200
----------- ----------

NET (LOSS) INCOME $ (558,720) $ 35,189
=========== ==========

NET (LOSS) INCOME PER SHARE (Note 2) $ (.15) $ .01
=========== ==========

WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK
OUTSTANDING (Note 2) 3,663,014 3,500,000
=========== ==========

See notes to financial statements

F-3

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

(Note 8)

<TABLE>
<CAPTION>
Common Stock Preferred Stock
25,000,000 Shares 10,000,000 Shares Unrealized
$.0001 Par Value $.0001 Par Value Gain (Loss)
----------------- ----------------- Additional on Investment (Deficit)
Par Par Paid-in Available- Retained
Shares Value Shares Value Capital for-Sale Earnings Total
--------- ----- --------- ----- ---------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of stock for cash at inception 3,000,000 $300 5,000,000 $500 $ 54,200 $ -- $ -- $ 55,000

Issuance of stock for cash and stock
of Compare Generiks, Inc. 500,000 50 -- -- 1,249,950 -- -- 1,250,000

Unrealized loss on investment available-for-sale -- -- -- -- -- (60,100) -- (60,100)

Net income -- -- -- -- -- -- 35,189 35,189
--------- ---- --------- ---- ---------- -------- --------- -----------

Balance, June 30, 1996 3,500,000 350 5,000,000 500 1,304,150 (60,100) 35,189 1,280,089

Issuance of stock in connection
with initial public offering 500,000 50 -- -- 1,841,291 -- -- 1,841,341

Net change in unrealized gain (loss)
on investment available-for-sale -- -- -- -- -- 70,188 -- 70,188

Net loss -- -- -- -- -- -- (558,720) (558,720)
--------- ---- --------- ---- ---------- -------- --------- -----------

Balance, June 30, 1997 4,000,000 $400 5,000,000 $500 $3,145,441 $ 10,088 $(523,531) $ 2,632,898
========= ==== ========= ==== ========== ======== ========= ===========
</TABLE>

See notes to financial statements

F-4

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

STATEMENTS OF CASH FLOWS

Period
April 24, 1996
Year Ended (Inception) to
June 30, 1997 June 30, 1996
------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ (558,720) $ 35,189
----------- ---------
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operations:

Deferred income taxes 16,600 (10,800)
Depreciation and amortization 120,778 1,666
Loss on sale of investment 442,586 --
Increase in assets:

Accounts receivable (775,338) (392,247)
Inventories (1,545,397) (99,586)
Prepaid expense (45,627) --
Other assets (100,846) (39,167)
Increase (decrease) in liabilities:

Accounts payable and accrued expenses 1,614,589 761,448
Taxes payable (20,400) 24,000
----------- ---------
Total adjustments (293,055) 245,314
----------- ---------
Net cash (used in) provided by
operating activities (851,775) 280,503
----------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment (819,033) (341,328)
Purchases of marketable securities (1,496,934) --
Proceeds from the sale of investments 1,445,140 --
----------- ---------
Net cash used in investing activities (870,827) (341,328)
----------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from issuance of stock 1,841,341 155,000
Proceeds from notes payable -- 200,000
Proceeds from bridge notes payable -- 300,000

Repayment of bridge notes payable (300,000) --
----------- ---------
Net cash provided by financing activities 1,541,341 655,000
----------- ---------

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (181,261) 594,175

CASH AND CASH EQUIVALENTS,
beginning of period 594,175 --
----------- ---------

CASH AND CASH EQUIVALENTS, end of period $ 412,914 $ 594,175
=========== =========

See notes to financial statements

F-5

<PAGE>

SUPERIOR SUPPLEMENTS, INC.

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED JUNE 30, 1997 AND FOR THE PERIOD
APRIL 24, 1996 (INCEPTION) TO JUNE 30, 1996

1. Organization and Nature of Operations:

Superior Supplements, Inc. (the "Company") is a Delaware Corporation
which was formed on April 24, 1996. The Company manufactures and markets dietary
supplement products including vitamins, minerals, herbs and specialty
nutritional supplements, in bulk tablet, capsule and powder form.

The Company was in the development stage through June 30, 1996. The
year 1997 is the first year during which it is considered an operating company.

2. Summary of Significant Accounting Policies:

a. Inventories

Inventories are valued at lower of cost (first-in, first-out method)
or market.

b. Investments

Available-for-sale securities are carried at fair value with the
unrealized holding gain (loss) included in stockholders' equity. A decline in
the market value of any available-for-sale security below cost that is deemed
other than temporary is charged to earnings resulting in the establishment of a
new cost basis for the security.

Investments in available-for-sale securities at June 30, 1997 consist
of U.S. Treasury notes.

c. Depreciation

Depreciation is computed on the straight-line method over the useful
lives of the related assets (5-10 years). Leasehold improvements are amortized
over their expected useful lives.

d. Income taxes

Deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities,
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

e. Statement of cash flows

For purposes of the statement of cash flows, the Company considers all

highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents.

f. Net (loss) income per share

Net (loss) income per share is computed using the weighted average
number of common and common equivalent shares outstanding during the period.

F-6

<PAGE>

2. Summary of Significant Accounting Policies: (Cont'd)

g. Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.

h. Concentration of credit risk

Financial instruments which potentially expose the Company to credit
risk, as defined by Statement of Financial Accounting Standard No. 105 ("FAS
105"), consists primarily of trade accounts receivable. Wholesale distributors
of dietary supplements and over-the-counter pharmaceuticals account for all of
the Company's trade receivables. The risk associated with this concentration is
limited due to their geographic dispersion.

i. Accounting for stock-based compensation

The Company accounts for its stock-based compensation costs using the
intrinsic value based method of accounting prescribed by APB Opinion No. 25 and
will provide pro forma disclosures of net income and earnings per share as if
the fair value-based method prescribed by Financial Accounting Standards Board
Statement No. 123 ("FASB") had been applied in measuring compensation expense.

j. New standards

In February 1997, the FASB issued Statement 128, "Earnings Per Share"
("Statement 128"), which simplifies the standards for computing earnings per
share previously used and makes them comparable to international standards. The
Statement is effective for financial statements issued for periods ending after
December 15, 1997, and earlier application is not permitted. The Company does
not believe that the adoption of this Statement will have a material effect to
its financial statements.

3. Inventories:

Inventories consist of the following at June 30, 1997:

Raw material $ 938,123
Work-in-process 600,105
Finished goods 106,755
----------
$1,644,983
==========

4. Property and Equipment:

Property and equipment consists of the following at June 30, 1997:

Equipment $ 643,073
Leasehold improvements 444,822
Furniture and fixtures 72,466
-----------
1,160,361
Less accumulated depreciation 120,778
-----------
$ 1,039,583
===========

F-7

<PAGE>

4. Property and Equipment: (Cont'd)

Depreciation expense for the year ended June 30, 1997 was $120,778. No
depreciation was recorded as of June 30, 1996 as none of the productive
equipment had been placed in operation.

5. Bridge Notes Payable:

In May 1996 the Company borrowed $300,000 from two unrelated parties at
8%. Each lender received a "Principal Bridge Note" and a "Convertible Bridge
Note." The Convertible Bridge Notes, which in the aggregate equal $100,000,
contained conversion features which entitled the holder to convert the note into
1,000,000 Class A Warrants. In order to expedite NASD approval of the Initial
Public Offering, in February 1997, the Company repaid its obligations under the
Principal Bridge Notes and the Convertible Bridge Notes. As a result, the
holders of the Convertible Bridge Notes have forfeited their right to convert
such Notes into Class A Warrants.

6. Note Payable:

On June 26, 1996, the Company borrowed $200,000 from PMF, Inc., the
Company's founder. This note bears interest at 8% per annum. Principal and

accrued interest is due on June 25, 1998.

7. Revolving Credit Agreement:

In May 1996, the Company entered into a revolving credit agreement with
Dune Holdings, Inc. ("Dune"), one of the Company's Bridge Lenders, pursuant to
which the Company can borrow up to $200,000 for a period of twenty four (24)
months at an interest rate of fifteen percent (15%) per annum. As of June 30,
1997, the Company had no outstanding balance.

8. Stockholders' Equity:

a. Capitalization

Pursuant to the Company's certificate of incorporation, the Company is
authorized to issue 25,000,000 shares of common stock and 10,000,000 shares of
preferred stock. All stock has a $.0001 par value. Each share of common and
preferred has one vote in all matters.

b. Initial capitalization

In April 1996, the Company issued 3,000,000 shares of common stock,
3,000,000 Class A Warrants and 5,000,000 shares of preferred stock for $55,000
("Founders' Stock"). The preferred shares, issued in April 1996, are designated
as Series A Preferred Shares. The Board of Directors has the authority to issue
preferred stock in one or more series and to fix the rights and other terms. The
Series A Preferred Shares rank senior to all series of preferred and common
stock, do not have any right to the payment of any dividend, and in the event of
any voluntary or involuntary liquidation of the Company are entitled to $.02 per
share.

Each Class A Warrant entitles the holder to purchase one (1) share of
common stock of the Company at the initial public offering price ($6.00 per
share), commencing one (1) year from the date of the Company's initial public
offering (March 4, 1997).

F-8

<PAGE>

8. Stockholders' Equity: (Cont'd)

c. Issuance of stock for stock and cash

On May 31, 1996, Compare Generiks, Inc. ("Compare") (see Note 10c)
acquired 500,000 shares of common stock of the Company, for $100,000 and the
issuance of 200,000 shares of common stock of Compare Generiks, Inc. The value
of the shares ($1,150,000) issued in connection with this transaction have been
determined using a fair value of $5.75 per share representing approximately
two-thirds of the market value of Compare's stock at May 31, 1996.

During December 1996 and January 1997, the Company sold the 200,000
shares of Compare stock for gross proceeds of $700,000, resulting in a loss of
$450,000.

d. Reserved shares

At June 30, 1997, the Company has 5,700,000 shares of common stock
reserved for future issuances.

e. Public offering

On February 26, 1997, the Company completed its Initial Public
Offering of securities. During the offering an aggregate of 575,000 units, each
comprised of two (2) shares of the Company's Common Stock and two (2) Class A
Redeemable Purchase Warrants, were sold. 325,000 of said units were sold by PMF,
Inc., as Selling Securityholder and 250,000 of said units were sold by the
Company which raised gross proceeds of $3,000,000 for the Company.

Effective with the closing of the offering, the Company entered into a
two-year consulting agreement with the underwriter. The consulting fee of
$72,000 is being charged to operations ratably over the term of the agreement.

In addition, the Company issued to the underwriter an option
("Underwriters' Option") to purchase up to 50,000 units at an exercise price of
$19.80 per unit. The option is exercisable for a period of four years,
commencing one (1) year from the date of the public offering.

f. Stock option plan

The Company has adopted a Stock Option Plan (the "Plan") covering
2,000,000 shares of common stock of the Company. Options under the Plan are
granted at terms set by the Board of Directors at the time of issuance. To date,
no options have been granted under the Plan.

9. Income Taxes:

Income tax provision consists of the following:

Period
April 24, 1996
Year Ended (Inception) to
June 30, 1997 June 30, 1996
------------- -------------
Federal:
Current $ - $ 14,000
Deferred 9,950 (6,350)
---------- ----------
9,950 7,650
---------- ----------
State:
Current 3,600 10,000
Deferred 6,650 (4,450)
---------- ----------
10,250 5,550

---------- ----------
$ 20,200 $ 13,200
========== ==========

F-9

<PAGE>

9. Income Taxes: (Cont'd)

Net deferred income tax asset (liability) is composed of the following at
June 30, 1997:

Net operating loss and investment credit carryforward $ 44,000
Capital loss carryforward 168,000
Other (5,800)
Unrealized gain on investments (3,200)
Valuation allowance (212,000)
---------
$ (9,000)
=========

The difference between the corporation's effective income tax rate and
the United States Statutory rate is reconciled below:

United States statutory rate 34.0% 34.0%
State income taxes, net of Federal
income tax benefit (1.2) 7.0
Effect of graduated rates -- (13.7)
Other (36.4) --
----- -----
(3.6)% 27.3%
===== =====

At June 30, 1997, the Company has available approximately $38,000 and
$29,000 of unused operating loss carryforwards and unused investment credits,
respectively, that may provide future tax benefits. The operating losses and
investment credits expire in 2012 and 2004, respectively.

The Company also has available approximately $443,000 of unused capital
loss carryforwards that may be applied against future capital gains. The loss
carryforwards expire in 2002.

10. Commitments:

a. Employment agreement

The Company has an employment agreement with an officer, expiring in
April 1998, which provides for an aggregate annual salary of $75,000. The
officer was also granted an option to purchase 100,000 shares of the outstanding
common stock of the Company exercisable at an exercise price equal to the

initial public offering price $6.00 per share one (1) year after the effective
date of the Company's initial public offering. The Company accounts for its
stock-based compensation costs under APB Opinion No. 25. Accordingly, no
compensation cost has been recognized as of June 30, 1997. Had compensation cost
been determined on the basis of FASB No. 123, the effect on net (loss) income
and (loss) earnings per share would have been immaterial.

b. Lease

On May 1, 1996 the Company entered into a 30-month lease agreement for
its office and warehouse space. The lease provided for no monthly rental
payments through July 1996, $23,000 per month beginning August 1996 to May 1996,
$19,166 per month from June 1997 to October 14, 1997 and $20,833 per month from
October 15, 1997 to October 14, 1998. Accordingly, the Company has given effect
to such rent concessions and has accrued rent expense aggregating $12,000 as of
June 30, 1997 using the straight-line basis over the term of the lease.

Rent expense approximated $223,000 and $39,000 for the periods ended
June 30, 1997 and 1996, respectively.

F-10

<PAGE>

9. Commitments: (Cont'd)

c. Supply and management agreements

The Company is party to an amended supply agreement with PDK Labs Inc.
("PDK"). The agreement, which expires in May 1999, provides for PDK to purchase
certain products at specified prices. In the event that PDK fails to purchase a
minimum amount ($2,500,000) of products in any given year, the Company will be
paid up to $100,000, on a pro-rata basis, as liquidated damages. Sales to PDK
approximated $4,013,000 and $823,000 for the periods ended June 30, 1997 and
1996, respectively. Included in accounts receivable at June 30, 1997 is
approximately $890,000 due from PDK.

The Company is also party to a supply agreement with Compare Generiks,
Inc. ("Compare"). Terms of this agreement are similar to the agreement with PDK,
except there are no minimum purchase requirements. As of June 30, 1997 there
have been no sales under this agreement.

The Company is also obligated under a management agreement with PDK
pursuant to which PDK agreed to supply certain management services to the
Company in consideration for the payment of a management fee of $10,000 per
month.

11. Fair Value of Financial Instruments:

The methods and assumptions used to estimate the value of the following

classes of financial instruments were:

Current Assets and Current Liabilities: The carrying amount of cash,
current receivables and payables and certain other short-term financial
instruments approximate their fair value.

At June 30, 1997, the carrying amount and fair value of the Company's
financial instruments are as follows:

Carrying Fair
Amount Value
-------- -----
Cash and cash equivalents $ 412,914 $ 412,914
Accounts receivable 1,167,585 1,167,585
Investment available-for-sale 772,496 772,496
Notes payable 200,000 200,000
Other current liabilities 2,379,637 2,379,637

12. Supplementary Information - Statement of Cash Flows:

Cash paid for interest and income taxes was $12,479 and $15,100,
respectively, for the year ended June 30, 1997. No cash was paid for interest
and income taxes in the period ended June 30, 1996.

In May 1996 Compare acquired 500,000 shares of common stock of the
Company, for $100,000 and the issuance of 200,000 shares of common stock of
Compare (valued at $1,150,000).

F-11

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER WOULD BE UNLAWFUL.

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

TABLE OF CONTENTS

PAGE
----
Available Information........................................... 2
Prospectus Summary.............................................. 3
The Company................................................... 3
The Offering.................................................. 4
Summary Financial Information................................. 6
Risk Factors.................................................... 7
Capitalization.................................................. 12
Dividend Policy................................................. 12
Selected Financial Information.................................. 13
Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................... 14
Business........................................................ 15
Management...................................................... 19
Principal Stockholders.......................................... 23
Certain Transactions............................................ 24
Description of Securities....................................... 25
Prior Company Offering.......................................... 27
Selling Securityholder.......................................... 28
Plan of Distribution............................................ 28
Legal Matters................................................... 29
Experts......................................................... 29
Additional Information.......................................... 29
Financial Statements............................................ F-1

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

2,350,000 SHARES OF COMMON STOCK,
PAR VALUE $.0001 PER SHARE
AND
2,350,000 CLASS A WARRANTS

SUPERIOR SUPPLEMENTS, INC.

------------------------
PROSPECTUS
------------------------

, 1997

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

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

In connection with the Company's initial public offering, the Underwriters
of the Company's initial public offering agreed to indemnify the Company, its
directors, and each person who controls it within the meaning of Section 15 of
the Act with respect to any statement in or omission from the registration
statement or the Prospectus or any amendment or supplement thereto if such
statement or omission was made in reliance upon information furnished in writing
to the Company by the Underwriters specifically for or in connection with the
preparation of the registration statement, the prospectus, or any such amendment
or supplement thereto.

Article Ninth of the Company's Certificate of Incorporation eliminates the
personal liability of directors to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law.

The Company has liability insurance coverage for its officers and
directors.

ITEMS 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses in connection with this Offering which are being
paid by the Selling Securityholder are as follows:

SEC filing fee*...................... $ 8,279
Accounting fees and expenses*........ $ 5,000
Legal fees and expenses*............. $ 5,000
Printing and engraving*.............. $ 5,000
Miscellaneous expenses*.............. $ 2,000
-------
Total........................... $25,279
-------
-------
- ------------------
* Estimated

II-1
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

The following information sets forth all securities of the Company sold by
it since inception, which securities were not registered under the Securities
Act of 1933, as amended:

In April, 1996, the Company issued (i) (a) 3,000,000 shares of Common Stock
to PMF, Inc., a company wholly-owned and controlled by Barry Gersten, and (b)
3,000,000 Class A Warrants for a cash consideration of $50,000 and (ii)
5,000,000 shares of Preferred Stock to PMF, Inc. for a cash consideration of
$5,000.

In May, 1996, the Company issued 500,000 shares of Common Stock to Compare
Generiks, Inc. ('CGI') (i) for a cash consideration of $100,000, and (ii) in
exchange for the issuance of 200,000 shares of common stock of CGI.

In May, 1996, the Company borrowed an aggregate of $300,000 from Dune
Holdings, Inc. and Clinthill Investment Ltd., two (2) unaffiliated lenders (the
'Bridge Lenders'). In exchange for making loans to the Company, each Bridge
Lender received two promissory notes (the 'Bridge Notes'). Certain of the Bridge
Notes are in the aggregate principal amount of $200,000 (the 'Principal Bridge
Notes') and the other Bridge Notes are in the aggregate principal amount equal
to $100,000 (the 'Convertible Bridge Notes'). Each of the Bridge Note bears
interest at the rate of eight percent (8%) per annum. The Bridge Notes are due
and payable upon the earlier of (i) April 30, 1997 and (ii) the closing of an
initial underwritten public offering of the Company's securities. In addition,
each Convertible Bridge Note converts into a number of Class A Warrants equal to
ten (10) times the principal amount of such Convertible Bridge Note upon
consummation of the Offering. The Company entered into the bridge financing
transactions because it required additional financing and no other sources of
financing were available to the Company at that time. Further, the Company
agreed to register the Class A Warrants issuable upon conversion of the
Convertible Bridge Notes, as well as the shares of Common Stock issuable upon
exercise of the Class A Warrants in the first registration statement filed by
the Company following the date of the loan. In order to expedite NASD approval
of the Company's initial public offering, in February 1997, the Company repaid
its obligations under the Principal Bridge Notes and the Convertible Bridge

Notes. As a result, the holders of the Convertible Bridge Notes have forfeited
their right to convert such notes into Class A Warrants.

The Company has relied on Section 4(2) of the Securities Act of 1933, as
amended, for its private placement exemption, such that the sales of the
securities were transactions by an issuer not involving any public offering.

Reference is also made hereby to 'Certain Transactions,' 'Principal
Stockholders' and 'Description of Securities' in the Prospectus for more
information with respect to the previous issuance and sale of the Company's
securities.

All of the aforesaid securities have been appropriately marked with a
restricted legend and are 'restricted securities' as defined in Rule 144 of the
rules and the regulations of the Securities and Exchange Commission, Washington
D.C. 20549. All of the aforesaid securities were issued for investment purposes
only and not with a view to redistribution, absent registration. All of the
aforesaid persons have been fully informed and advised concerning the
Registrant, its business, financial and other matters. Transactions by the
Registrant involving the sales of these securities set forth above were issued
pursuant to the 'private placement' exemptions under the Securities Act of 1933,
as amended, as transactions by an issuer not involving any public offering. The
Registrant has been informed that each person is able to bear the economic risk
of his investment and is aware that the securities were not registered under the
Securities Act of 1933, as amended, and cannot be re-offered or re-sold until
they have been so registered or until the availability of an exemption
therefrom. The Transfer Agent and registrar of the Registrant will be instructed
to mark 'stop transfer' on its ledgers to assure that these securities will not
be transferred absent registration or until the availability of an exemption
therefrom is determined.

II-2

<PAGE>
ITEM 27. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
1.01* -- Form of Underwriting Agreement.
1.02* -- Form of Agreement Among Underwriters
1.03* -- Form of Consulting Agreement.
1.04* -- Form of Selected Dealer Agreement.
1.05* -- Form of Warrant Exercise Fee Agreement.
3.01* -- Certificate of Incorporation of the Company dated April 24, 1996.
3.02* -- By-Laws of the Company.
3.03* -- Form of Certificate of Designation of Series A Preferred Stock.
4.01* -- Specimen Certificate for shares of Common Stock.
4.02* -- Specimen Certificate for shares of Series A Preferred Stock.
4.03* -- Specimen Certificate for Class A Redeemable Common Stock Purchase
Warrant.
4.04* -- Form of Warrant Agreement by and among the Company and American
Stock Transfer & Trust Company.
4.05* -- Form of Underwriters' Unit Purchase Warrant.
5.01 -- Opinion of Bernstein & Wasserman, LLP, counsel to the Company.
9.01* -- Form of Voting Trust Agreement.
10.01* -- Supply Agreement between the Company and PDK dated as of May 14,
1996.
10.02* -- Supply Agreement between the Company and CGI dated as of May 31,
1996.
10.03* -- Lease between the Company and Park Associates dated as of May 1,
1996.
10.04* -- Subscription Agreement between the Company and CGI dated as of May
31, 1996.
10.05* -- Employment Agreement between the Company and Lawrence D. Simon dated
as of May 1, 1996.
10.06* -- Form of May, 1996 Bridge Loan Agreements.
10.07* -- Revolving Credit Agreement between the Company and Dune dated May
31, 1996.
10.08* -- Promissory Note in favor of PMF dated June 26, 1996.
10.09* -- 1996 Stock Plan.
10.10** -- Amendment to Supply Agreement between the Company and PDK Labs Inc.
dated as of July 21, 1997.
10.11** -- Management Agreement between the Company and PDK Labs Inc. dated as
of July 21, 1997.
10.12** -- Amendment to Employment Agreement between the Company and Lawrence
D. Simon dated as of April 30, 1997.
23.01 -- Consent of Bernstein & Wasserman, LLP (to be included in Exhibit
5.01).
23.02 -- Consent of Holtz Rubenstein & Co., LLP

- ------------------
* Incorporated by reference to the Company's Registration Statement on Form
SB-2, No. 333-9761.

** Incorporated by reference to the Company's Form 10-KSB for the year ended
June 30, 1997.

II-3
<PAGE>
ITEM 28. UNDERTAKINGS

(a) Rule 415 Offering

The undersigned Registrant will:

1. File, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Act;

(ii) Reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement;

(iii) Include any additional or changed material information on the
plan of distribution.

2. For determining liability under the Act, treat each such
post-effective amendment as a new registration statement of the securities
offered, and the Offering of such securities at that time shall be deemed
to be the initial bona fide offering.

3. File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the Offering.

(b) Indemnification

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or controlling persons of the Registrant
pursuant to the provisions referred to in Item 22 of this Registration Statement
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned Registrant will:

1. For determining any liability under the Act, treat the information
omitted from the form of Prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in the form of a

prospectus filed by the small business issuer under Rule 424(b)(1) or (4)
or 497(h) under the Act as part of this Registration Statement as of the
time the Commission declared it effective.

2. For any liability under the Act, treat each post-effective
amendment that contains a form of prospectus as a new registration
statement for the securities offered in the Registration Statement, and
that the Offering of the securities at that time as the initial bona fide
Offering of those securities.

II-4

<PAGE>
SIGNATURES

IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE REGISTRANT, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL THE REQUIREMENTS FOR FILING ON FORM SB-2 AND AUTHORIZED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, IN NEW
YORK, NEW YORK ON OCTOBER 3, 1997.

SUPERIOR SUPPLEMENTS, INC.

By: /s/ LAWRENCE D. SIMON
-------------------------------------
Lawrence D. Simon
President, Chairman, Chief Financial
Officer, Principal Accounting Officer
and Director

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENTS THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE TITLE DATE
- ------------------------- --------------------------------- ---------------

/s/ LAWRENCE D. SIMON President, Chairman, Chief October 3, 1997
- ------------------------- Financial Officer, Principal
Lawrence D. Simon Accounting Officer and Director

/s/ REGINALD SPINELLO Director October 3, 1997
- -------------------------
Reginald Spinello

/s/ MATTHEW L. HARRITON Director, Secretary October 3, 1997
- -------------------------
Matthew L. Harriton

/s/ DR. DANIEL DURCHSLAG Director October 3, 1997
- -------------------------
Dr. Daniel Durchslag

II-5

<PAGE>
October 6, 1997

Board of Directors
Superior Supplements, Inc.
270 Oser Avenue
Hauppauge, New York 11788

Re: Superior Supplements, Inc.
Registration Statement on Form SB-2

Gentlemen:

We have acted as counsel for Superior Supplements, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company of a registration statement (the "Registration Statement") on Form
SB-2, under the Securities Act of 1933, relating to the public offering by a
selling stockholder (the "Selling Securityholder") of of 2,350,000 shares of the
Company's Common Stock, par value $.0001 per share (the "Common Stock") and
2,350,000 Class A Redeemable Common Stock Purchase Warrants (the "Class A
Warrants") (together, the "Selling Securityholder's Securities").

We have examined the Certificate of Incorporation and the By-Laws of
the Company, the minutes of the various meetings and consents of the Board of
Directors of the Company, the Warrant Agreement and Unit Purchase Option, the
forms of certificates representing the Common Stock and the Class A Warrants,
originals or copies of such records of the Company, agreements, certificates of
public officials, certificates of officers and representatives of the Company
and others, and such other documents, certificates, records, authorizations,
proceedings, statutes and judicial decisions as we have deemed necessary to form
the basis of the opinion expressed below. In such examination, we have assumed
the genuiness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity to originals of all documents submitted to us
as copies thereof. As to various questions of fact material to such opinion, we
have relied upon statements and certificates of officers and representatives of
the Company and others.

Based on the foregoing, we are of the opinion that:

1. The shares of Common Stock and Class A Warrants included in the
Selling Securityholder's Securities have been duly authorized, validly issued,
fully paid and nonassessable; and, when sold in accordance with the Registration
Statement will continue to be duly authorized,

<PAGE>

Board of Directors
October 6, 1997
Page 2
- --------------------------------------------------------------------------------

validly issued, fully paid and nonassessable.

2. The shares of Common Stock issuable upon exercise of the Class A
Warrants included in the Selling Securityholder's Securities have been duly
authorized and reserved for issuance and, when issued in accordance with the
terms of the Class A Warrants included in the Selling Securityholder's
Securities, will be duly authorized, validly issued, fully paid and
nonassessable.

We hereby consent to be named in the Registration Statement and the
Prospectus as attorneys who have passed upon legal matters in connection with
the offering of the securities offered thereby under the caption "Legal
Matters."

We further consent to your filing a copy of this opinion as an exhibit
to the Registration Statement.

Very truly yours,

BERNSTEIN & WASSERMAN, LLP

B&W/jm

<PAGE>
CONSENT OF INDEPENDENT AUDITORS

We consent to the use in this Registration Statement of Superior Supplements,
Inc. on Form SB-2 of our report on Superior Supplements, Inc. dated August 4,
1997, appearing in the Prospectus which is part of this Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

HOLTZ RUBENSTEIN & CO., LLP

Melville, New York
October 6, 1997