<PAGE>
As filed with the Securities and Exchange Commission on
July 31, 1996
Registration No. 333-02411
___________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
AMENDMENT NO. 2
to
FORM S-3
Registration Statement
Under the
Securities Act of 1933
_________________________________
HEALTH-CHEM CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-2682801
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification Number)
Organization)
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
(212) 398-0700
(Address, Including Zip Code, and Telephone
Number, Including Area Code of Registrant's
Principal Executive Offices)
________________________________________
Marvin M. Speiser, President
Health-Chem Corporation
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
(212) 398-0700
(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code of
Agent for Service)
Copies to:
Bruce M. Schloss, Esq. Paul Bork, Esq.
General Counsel Hinckley, Allen & Snyder
Health-Chem Corporation One Financial Center
1212 Avenue of the Americas 45th Floor
24th Floor Boston, MA 02111
New York, NY 10036
________________________________
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this registration
statement becomes effective.
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, other than securities
offered only in connection with dividend or interest-
reinvestment plans, check the following box: [X]
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 therefor become effective in accordance with
Section 8(a) of this 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.<PAGE>
<PAGE>
Subject to completion, dated July 31, 1996.
PROSPECTUS
HEALTH-CHEM CORPORATION
1,320,000 Shares Common Stock
Health-Chem Corporation ("Health-Chem" or the "Company")
is granting to holders of the outstanding shares of common
stock, par value $.01 per share ("Common Stock"), of Health-
Chem of record at the close of business on August 2, 1996
(the "Record Date"), transferable subscription rights (the
"Rights" or the "Subscription Rights") to purchase up to
1,320,000 shares of Common Stock, at the price of $__ per
share (the "Subscription Price"), on the basis of three
shares of Common Stock for each ten shares of Common Stock
owned on the Record Date (the "Subscription Privilege"). The
Rights will be evidenced by transferable stock purchase
warrants (the "Warrants"). No fractional Rights or cash in
lieu thereof will be distributed or paid by the Company.
Each record holder of Common Stock will receive a Warrant
representing one Right for each share held. A holder of ten
Rights shall be entitled to exercise all ten Rights to
purchase three shares of Common Stock. Holders of Warrants
may not exercise Rights in groups of less than ten.
Approximately 1,320,000 shares of Common Stock will be
offered for sale in this offering, representing seventeen
percent of the Company's outstanding Common Stock. The grant
of Rights and the offering of shares of Common Stock hereby
is referred to in this Prospectus as the "Offering". See
"The Offering".
The Rights are transferrable and are expected to trade on
the American Stock Exchange, Inc. and in the over-the-counter
market. The Rights will expire at 5:00 p.m., Eastern
Daylight Time, on September 6, 1996, unless extended by
Health-Chem (as extended, the "Expiration Date"). The
Company makes no representation as to whether a market will
develop in the Rights, and, if such market should develop,
the price at which Rights may trade.
The Rights being offered hereby are subject to
cancellation if the Offering is prohibited by law or enjoined
by a court of law. In that event, any payments received by
Continental Stock Transfer and Trust Company, New York, New
York (the "Rights Agent"), in respect of the Subscription
Price shall be promptly returned. See "The Offering -
Cancellation of Rights Offering" and "Recent Developments".
<PAGE>
Exercise of the Subscription Rights is irrevocable.
The Subscription Price has been determined by Health-
Chem's Board of Directors. The closing price of a share of
Common Stock reported on the American Stock Exchange, Inc. on
August 1, 1996 was $________.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Subscription Discounts and Proceeds to
Price Commissions the Company (1)
<S> <C> <C> <C>
Per Share. . $_________ $0.00 $_________
Total. . . . $_________ $0.00 $_________
</TABLE>
(1) Before deducting expenses of the Offering and the amount
to be paid by the Company in acquiring the shares of Common
Stock being offered hereby. See "Use of Proceeds" and "Stock
Purchase Agreement".
The date of this Prospectus is August 2, 1996.
<PAGE>
<PAGE>
IN CONNECTION WITH THIS OFFERING THE COMPANY MAY EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE RESPECTIVE
MARKET PRICES OF THE COMMON STOCK AND THE RIGHTS AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK
EXCHANGE, IN THE OVER-THE-COUNTER-MARKET, OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
ADDITIONAL INFORMATION
Health-Chem Corporation ("Health-Chem" or the "Company"),
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (including
all amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act")
with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the Commission,
this Prospectus omits certain information contained in the
Registration Statement. For further information with respect
to the Company and the Common Stock offered hereby, reference
is hereby made to the Registration Statement and to the
exhibits and schedules filed therewith. Statements contained
in this Prospectus regarding the contents of any agreement or
other document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance
reference is made to the copy of such agreement or document
filed as an exhibit to the Registration Statement, each
statement being qualified in all respects by such reference.
The Registration Statement, including exhibits and schedules
thereto, may be inspected at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W. Washington,
DC 20549, and copies of all or any part thereof may be
obtained from such office upon payment of the prescribed
fees.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated by reference into this
prospectus:
(1) The Company's annual report for the fiscal year
ended December 31, 1995 on Form 10-K
(2) The Company's definitive proxy statement dated April
5, 1996 for the 1996 Annual Meeting of Stockholders
(3) The Company's quarterly report for the fiscal
quarter ended March 31, 1996 on Form 10-Q.
<PAGE>
All documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior
to the termination of the Offering shall be deemed to be
incorporated by reference into the Prospectus.
The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered on the
written request of any such person, a copy of any or all of
the documents described above which have been incorporated by
reference in this Prospectus, other than exhibits to such
documents. Written requests for copies of such documents
should be addressed to Bruce M. Schloss, Esq., Secretary,
Health-Chem Corporation, 1212 Avenue of the Americas, 24th
Floor, New York, New York, 10036.
_____________________________
<PAGE>
<PAGE>
THE OFFERING
The Subscription Rights Offering
The Company is offering up to 1,320,000 shares of Common
Stock (the "Total Maximum") to record holders of Health-Chem
Common Stock other than Marvin M. Speiser as of the close of
business on the Record Date pursuant to transferable
Subscription Rights represented by the Warrants. The total
number of shares being offered to record holders reflects Mr.
Speiser's retention of such number of shares as would have
been offered to Mr. Speiser had the Company offered, and had
he participated in, an offering composed of all 1,782,689
shares held by Mr. Speiser subject to the Company's options
described under the section of this prospectus entitled
"Stock Purchase Agreement". The Subscription Privilege
entitles holders of Common Stock as of the Record Date to
purchase three shares of Common Stock for every ten shares of
Common Stock held on the Record Date. No fractional shares
or fractional Rights or cash in lieu therefor will be issued,
distributed, or paid by the Company. Stockholders of record
will be delivered a Warrant representing one Right for each
Share of Common Stock held on the Record Date. Warrants
shall be exercisable by a holder in groups of ten Rights (for
three shares) and not in groups of less than ten Rights, but
a holder may exercise some Rights without exercising all
Rights granted to such holder. Subject to the foregoing,
holders of the Company's Common Stock are entitled to
subscribe for all, or any portion of, the shares of Common
Stock underlying their Subscription Privilege.
The Purpose of the Offering
The Board of Directors of the Company has concluded that
it is in the best interest of the Company and its
stockholders to increase the number of shares of the
Company's Common Stock in the hands of non-affiliates, and
that it is likely that the capital markets will be better
able to analyze and evaluate the performance of the Company
from a financial perspective if a relatively large percentage
of the Company's outstanding Common Stock were not subject to
repurchase by the Company. The Company has the right to
acquire from Mr. Speiser 1,207,689 shares of its Common Stock
pursuant to an option agreement dated as of August 30, 1991
(the "1991 Option") and 575,000 shares of its Common Stock
pursuant to an option agreement dated as of July 15, 1994
(the "1994 Option" and, collectively with the 1991 Option,
the "Options"). As of July 31, 1996, the per share exercise
price under the 1991 Option was $0.46, and the per share
exercise price under the 1994 Option was $2.36. The exercise
price under each Option is an amount equal to Mr. Speiser's
acquisition cost for the underlying Common Stock, including
<PAGE>
amount equal to interest calculated at prime from the
creation of such Option. The Company and Mr. Speiser have
entered into a Stock Purchase Agreement dated as of March 29,
1996, as amended (the "Stock Purchase Agreement") pursuant to
which this Offering is being effected. Under the terms of
the Stock Purchase Agreement, Mr. Speiser will provide the
shares of Common Stock for purchase by the Company in an
amount approximately equal to the number of shares of Common
Stock to be issued to subscribers in the Subscription Rights
Offer. Under the Stock Purchase Agreement, Mr. Speiser is
obligated to sell up to 1,269,820 shares of Common Stock to
the Company, which shares are currently subject to the
Options, at a price equal to the weighted per share average
exercise price under the Options (which was $1.07 as of July
31, 1996). To the extent that subscriptions are validly
exercised for an amount in excess of that, Mr. Speiser may
sell the additional amount to the Company at the Average
Option Price (as defined below in the section entitled "Stock
Purchase Agreement") or the Company will issue shares from
treasury. For terms of the Options and the Stock Purchase
Agreement, see "Stock Purchase Agreement."
The proceeds of the Offering will be used, in part, to
fund the purchase of the Common Stock from Mr. Speiser under
the Stock Purchase Agreement. See "Stock Purchase Agreement"
and "Use of Proceeds."
Rights Agent
In connection with the Offering and the related
transactions, Continental Stock Transfer & Trust Company (the
"Rights Agent") has been engaged by the Company as a rights
agent pursuant to an agreement executed between the Company
and the Rights Agent (the "Rights Agent Agreement"). The
Rights Agent acts as the Transfer Agent and Registrar for the
Company. Holders of Rights will be permitted to exercise
and/or transfer all or a portion of such Rights through the
Rights Agent, and/or may sell all or a portion of such Rights
through a registered broker-dealer, by appropriate
endorsement and delivery of the Warrant. The Company will
pay the fees and expenses of the Rights Agent and has also
agreed to indemnify the Rights Agent from certain liability
that the Rights Agent may incur in connection with the
Offering.
Information Agent
Questions and requests for copies of applicable
documents and for assistance concerning the exercise or
transfer of the Rights should be directed to MacKenzie
Partners, Inc., (the "Information Agent") at the address and
<PAGE>
telephone and telecopy numbers set forth under the heading
"Additional Information" below. The Company will pay the
fees and expenses of the Information Agent and has also
agreed to indemnify the Information Agent from certain
liability that the Information Agent may incur in connection
with the Offering.
Plan of Distribution
The Rights are transferable and it is expected that the
Rights will be traded on the American Stock Exchange until
the close of business on September 5, 1996, the day preceding
the Expiration Date of the Subscription Rights Offering.
There can be no assurances as to whether a market will
develop in the Rights, and, if such market should develop,
whether the market will remain available throughout the
exercise period, or the price at which Rights may trade.
Expiration Date
The Subscription Rights Offering will expire at 5:00 p.m.,
Eastern Daylight Time, on September 6, 1996, unless extended
in the sole discretion of the Board of Directors of the
Company to a date not later than September 16, 1996. After
the Expiration Date, unexercised Subscription Rights will be
null and void. The Company will not be obligated to honor
any Warrants received by the Rights Agent after the
Expiration Date, regardless of when the documents were sent.
Procedure for Subscribing for Common Stock in the Offering
Holders of Warrants who desire to exercise their
Subscription Rights must deliver to the Rights Agent, on or
prior to the Expiration Date, the properly completed and
endorsed Warrant with the required signatures guaranteed,
together with a payment in full of the Subscription Price for
each share of Common Stock subscribed for. Such payment must
be by check or bank draft drawn upon a U.S. bank, payable to
Continental Stock Transfer & Trust Company, as Rights Agent
for the Company. Parties interested in wiring funds for
subscription may do so in accordance with the Warrant and the
related Letter of Instruction and should contact the Rights
Agent at (212) 509-4000, ext. 227. The Subscription Price
will be deemed to have been received by the Rights Agent only
upon (i) clearance of any uncertified check, (ii) receipt by
the Rights Agent of any certified check or bank draft drawn
upon a U.S. bank, or (iii) receipt of good funds in the
Rights Agent's account designated above. If paying by
uncertified personal check, please note that the funds paid
<PAGE>
thereby may take at least five business days to clear.
Accordingly, persons who wish to pay the Subscription Price
by means of an uncertified personal check are urged to make
payment sufficiently in advance of the Expiration Date to
ensure that such payment is received and clears by such date
and are urged to consider payment by means of certified or
cashier's check or wire transfer of funds. All funds
received in payment of the Subscription Price shall be held
by the Rights Agent and held in a special agency account.
Earnings on such funds, if any, will be retained by the
Company whether or not the Offering is consummated.
The address to which the Warrant and payment of the
Subscription Price should be delivered is:
To: Continental Stock Transfer & Trust Company,
Attn: Reorganization Department
By Hand By Overnight Courier By Mail
2 Broadway 2 Broadway 2 Broadway
19th Floor New York, NY 10004 New York, NY 10004
New York, NY 10004
Telephone questions are directed to the Reorganization
Department at (212) 509-4000, ext. 227.
If the aggregate Subscription Price paid by a holder of
Common Stock exceeds the amount necessary to purchase the
number of shares of Common Stock for which such holder has
indicated an intention to subscribe, the excess payment
tendered shall be returned following the Expiration Date.
With respect to endorsed Warrants submitted by holders of
Common Stock, unless such endorsed Warrant (i) provides that
the shares of Common Stock to be issued pursuant to the
exercise of Subscription Rights are to be delivered to the
holder of such Subscription Rights or (ii) is submitted for
the account of an eligible guarantor institution, pursuant to
Rule 17Ad-15 (an "Eligible Institution"), promulgated under
the Exchange Act, signatures on such endorsed Warrants must
be guaranteed with a Medallion Guarantee by an Eligible
Institution.
Holders of the Company's Common Stock for the account of
others, such as brokers, trustees or depositories for
securities, should notify the respective beneficial owners of
such shares as soon as possible to ascertain such beneficial
owners' intentions and to obtain instructions with respect to
Subscription Rights. If such a beneficial owner so instructs,
the record holder of such Subscription Rights should
<PAGE>
complete, endorse, and deliver the appropriate Warrants to
the Rights Agent with the proper payment. In addition,
beneficial owners of Common Stock held through such a nominee
holder should contact the holder and request the holder to
affect transactions in accordance with the beneficial owners'
instructions.
The instructions accompanying the Warrants should be read
carefully and followed in detail. Warrants and payment
should be sent to the Rights Agent. Do not send Warrants or
payments to the Company.
The method of delivery of Warrants and payments of the
Subscription Price to the Rights Agent will be at the
election and risk of holders of Common Stock, but if sent by
mail, it is recommended that such Warrants and payments be
sent by registered mail, properly insured, with return
receipt requested and that a sufficient number of days be
allowed to ensure receipt by the Rights Agent and clearance
of payment prior to the Expiration Date. Because uncertified
personal checks may take five business days to clear, holders
are strongly urged to pay, or arrange for payment, by means
of certified or cashier's check or wire transfer of funds.
All questions concerning the time limits, validity, form,
endorsement, exercise or eligibility of Warrants received or
any exercise of Subscription Rights will be determined by the
Company, whose determinations will be final and binding. The
Company in its sole discretion may waive any defect or
irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the
purported subscriptions for shares of Common Stock. Warrants
will not be deemed to have been received or accepted until
all irregularities have been waived or cured within such time
as the Company determines in its sole discretion. Neither
the Company nor the Rights Agent will be under any duty to
give notification of any defect or irregularity in connection
with the submission of Warrants or incur any liability for
failure to give such notification.
Subscriptions for Common Stock which are received by the
Rights Agent from holders of Common Stock exercising
Subscription Rights may not be revoked. Subscription Rights
are transferable by appropriate endorsement and delivery of
the Warrant or Warrants representing such Rights.
Certain directors and executive officers of the Company
may assist in the Offering by, among other things, generally
being available to answer questions of potential subscribers.
None of such directors and executive officers will receive
compensation for such services.
<PAGE>
None of such directors and executive officers are
registered as securities brokers or dealers under the federal
or applicable state securities laws, nor are any such persons
affiliated with any broker or dealer. Because none of such
persons are in the business of either effecting securities
transactions for others or buying and selling securities for
their own account, they are not required to register as
brokers or dealers under the federal securities laws. In
addition, the proposed activities of such directors and
executive officers are exempted from registration pursuant to
a specific safe-harbor provision of Rule 3a4-1 under the
Exchange Act. Substantially similar exemptions from
registration are available under applicable state securities
laws.
If a Rights holder wishes to exercise Rights, but time
will not permit such holder to cause the Warrant(s)
evidencing such Rights to reach the Rights Agent on or prior
to the Expiration Date, such Rights may nevertheless be
exercised if all of the following conditions (the "Guaranteed
Delivery Procedures") are met:
(a) such holder has caused payment in full of the
Subscription Price for each share being purchased pursuant to
the Subscription Privilege to be received (in the manner set
forth above) by the Rights Agent on or prior to the
Expiration Date;
(b) the Rights Agent receives, on or prior to the
Expiration Date, a notice of guaranteed delivery (a "Notice
of Guaranteed Delivery"), substantially in the form provided
with the "Instructions as to Exercise of Warrants" (the
"Instructions") distributed with the Warrants, from a member
firm of a registered national securities exchange or a member
of the National Association of Securities Dealers, Inc., from
a commercial bank or trust company having an office or
correspondent in the United States, or from a financial
institution acceptable to the Rights Agent (each an
"Acceptable Institution"), stating the name of the exercising
Rights holder, the number of Rights represented by the
Warrant(s) held by such exercising Rights holder, the number
of shares being purchased pursuant to the Subscription
Privilege and guaranteeing the delivery to the Rights Agent
of any Warrant(s) evidencing such Rights within three AMEX
trading days following the date of the Notice of Guaranteed
Delivery; and
(c) the properly completed Warrant(s) evidencing the
Rights being exercised, with any required signature
guaranties, is received by the Rights Agent within three AMEX
trading days following the date of the Notice of Guaranteed
Delivery relating thereto. The Notice of Guaranteed Delivery
may be delivered to the Rights Agent in the same manner as
<PAGE>
Warrants at the address set forth above, or may be
transmitted to the Rights Agent by telegram or facsimile
transmission to the attention of the Reorganization
Department, with reference to this Offering (telecopy No.
(212) 509-5150). Additional copies of the form of Notice of
Guaranteed Delivery are available upon request from the
Rights Agent, whose addresses and telephone numbers are set
forth herein.
If an exercising Rights holder does not indicate the
number of Rights being exercised, or does not forward full
payment of the aggregate Subscription Price for the number of
Rights that the Rights holder indicates are being exercised,
then the Rights holder will be deemed to have exercised the
Subscription Privilege with respect to the maximum number of
Rights that may be exercised for the aggregate Subscription
Price payment delivered by the Rights holder. To the extent
that the aggregate Subscription Price payment delivered by
the Rights holder exceeds the product of the Subscription
Price multiplied by the number of shares receivable for the
number of Rights evidenced by the Warrants delivered by the
Rights holder (such excess being the "Subscription Excess"),
the Subscription Excess paid by that Rights holder shall be
returned as soon as practicable by mail, without interest or
deduction.
Any questions or requests for assistance concerning the
method of exercising Rights or requests for additional copies
of this Prospectus, the Instructions, or the Notice of
Guaranteed Delivery should be directed to the Information
Agent at the address and telephone and telecopy numbers set
forth under the heading "Additional Information" below.
Methods of Transferring Rights
The Rights may be purchased or sold through usual
investment channels. It is anticipated that they will trade
on the AMEX until the close of business on the last AMEX
trading day preceding the Expiration Date.
The Rights evidenced by a single Warrant may be
transferred in whole by endorsing the Warrant for transfer in
accordance with the accompanying instructions. A portion of
the Rights evidenced by a single Warrant (but not fractional
Rights) may be transferred by delivering to the Rights Agent
a Warrant properly endorsed for transfer, with instructions
to register such portion of the Rights evidenced thereby in
the name of the transferee (and to issue a new Warrant to the
transferee evidencing such transferred Rights). In such
event, a new Warrant evidencing the balance of the Rights
will be issued to the Rights holder or, if the Rights holder
so instructs, to an additional transferee.
<PAGE>
Rights holders wishing to transfer all or a portion of
their Rights (but not fractional Rights) should allow a
sufficient amount of time prior to the Expiration Date for
(i) the transfer instructions to be received and processed by
the Rights Agent, (ii) a new Warrant to be issued and
transmitted to the transferee or transferees with respect to
transferred Rights, and to the transferor with respect to
retained Rights, if any, and (iii) the Rights evidenced by
such new Warrants to be exercised or sold by the recipients
thereof. Neither the Company nor the Rights Agent shall have
any liability to a transferee or transferor of Rights if
Warrants are not received in time for exercise or sale prior
to the Expiration Date.
Except for the fees charged to the Company by the Rights
Agent, all commissions, fees and other expenses (including
brokerage commissions and transfer taxes) incurred in
connection with the purchase, sale or exercise of Rights will
be for the account of the transferor of the Rights, and none
of such commissions, fees or expenses will be paid by the
Company or the Rights Agent.
Issuance of Common Stock
Certificates representing shares of Common Stock
purchased pursuant to the Offering will be delivered to
purchasers as soon as practicable after the receipt of a
valid Subscription. No fractional shares of Common Stock
will be issued in the Offering.
Certain Federal Income Tax Considerations
The following is a summary of the opinion of the
Company's tax counsel, Hinckley, Allen & Snyder, as to
material federal income tax consequences under present law to
holders of Common Stock upon the issuance of Rights and to
Rights holders upon exercise and disposition of the Rights.
This discussion is based on the provisions of the Internal
Revenue Code of 1986, as amended (the "Tax Code"), final,
temporary and proposed Treasury regulations thereunder, and
administrative and judicial interpretations thereof, all as
in effect as of the date hereof and all of which are subject
to change (possibly on a retroactive basis). Legislative,
judicial or administrative changes or interpretations could
alter or modify the tax discussion set forth below. This
discussion does not purport to deal with all aspects of
federal income taxation that may be relevant to a particular
Rights holder in light of such Rights holder's personal
investment circumstances or to certain types of Rights
holders subject to special treatment under the federal income
<PAGE>
tax laws (e.g., life insurance companies, tax exempt
organizations, foreign corporations and nonresident aliens).
No attempt is made to consider any aspects of state, local or
foreign taxation. Finally, substantial uncertainties
resulting from the lack of definitive judicial or
administrative authority and interpretations apply to various
tax issues addressed herein. The Company has not sought, nor
does it intend to seek, any rulings from the IRS relating to
such issues or any other issues.
EACH RIGHTS HOLDER IS URGED TO CONSULT SUCH RIGHTS HOLDER'S
OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE
RIGHTS OFFERING WITH RESPECT TO SUCH RIGHTS HOLDER'S OWN
PARTICULAR TAX SITUATION, INCLUDING THE APPLICATION AND
EFFECT OF THE TAX CODE, AS WELL AS STATE, LOCAL AND FOREIGN
INCOME AND OTHER TAX LAWS.
Issuance of the Rights. Holders of Common Stock will not
recognize taxable income, for federal income tax purposes, in
connection with the receipt of the Rights.
Basis and Holding Period of the Rights. Unless a shareholder
elects otherwise (as provided in (ii) below), if the fair
market value of the Rights on the date of issuance is less
than 15% of the fair market value (on the date of issuance)
of the Common Stock with respect to which the Rights are
received, the basis of the Rights received by a shareholder
as a distribution with respect to such shareholder's Common
Stock will be zero. If, however, either (i) the fair market
value of the Rights on the date of issuance is 15% or more of
the fair market value (on the date of issuance) of the Common
Stock with respect to which the Rights are received or (ii)
the shareholder elects, in his or her federal income tax
return for the taxable year in which the Rights are received,
to allocate part of the basis of such Common Stock to the
Rights, then upon exercise or transfer of the Rights, the
shareholder will allocate such shareholder's basis in such
Common Stock between the Common Stock and the Rights in
proportion to the fair market values of each on the date of
issuance, except that, in either case, no allocation of basis
will be made to the Rights if the Rights expire unexercised.
The holding period of a shareholder with respect to the
Rights received as a distribution on such shareholder's
Common Stock will include the shareholder's holding period
for the Common Stock with respect to which the Rights were
issued. With respect to a purchaser of Rights, the tax basis
of such Rights will be equal to the purchase price paid
therefore and the holding period for such Rights will begin
on the date following the date of purchase.
Transfer of the Rights. Holders of Common Stock who sell the
Rights received in the issuance prior to exercise will
recognize gain or loss equal to the difference between the
sale proceeds and the basis of such shareholder, if any, in
<PAGE>
the Rights sold. Such gain or loss will be capital gain or
loss if gain or loss from a sale of Common Stock held by such
shareholder would be characterized as capital gain or loss at
the time of such sale. Any gain or loss recognized on a sale
of Rights acquired by purchase will be capital gain or loss
if Common Stock would, if acquired by the seller, be a
capital asset in the hands of such seller.
Lapse of the Rights. Upon the lapse of any Rights received
by Rights holders on the issuance, such Rights holders will
not recognize any gain or loss, and no adjustment will be
made to the basis of the Common Stock, if any, owned by such
Rights holders. Upon the expiration of any Rights purchased
by purchasers of the Rights, such purchasers will be entitled
to a loss equal to their tax basis in the Rights. Any loss
recognized on the expiration of the Rights acquired by the
purchase will be a capital loss if Common Stock would, if
acquired by the seller, be a capital asset in the hands of
such seller.
Exercise of the Rights; Basis and Holding Period of the
Common Stock Acquired through Exercise. Rights holders will
not recognize any gain or loss upon the exercise of such
Rights. The basis of the Common Stock acquired through the
exercise of the Rights will be equal to the sum of the
Exercise Price therefor and any basis of the Rights holder in
such Rights. The holding period for the Common Stock
acquired through exercise of the Rights will commence on the
date the Rights are exercised.
Blue Sky Limitation
The Company will not be required to make the Offering
available to or to issue shares of Common Stock to any holder
of Common Stock who is resident in a state or other
jurisdiction in which the Company deems, in its sole
discretion, that the costs associated with the compliance
with applicable securities law are excessive relative to the
benefit conferred or in which offers or sales may be
unlawful.
Right to Extend or Terminate the Offering
The Company expressly reserves the right: (i) to extend the
Expiration Date to a date not later than September 16, 1996,
upon notice to the Rights Agent; and (ii) as to then-
unexercised Rights only, to terminate the Offering, by notice
to the Rights Agent, if the Offering is prohibited by law or
regulation or is enjoined by a court of law of competent
jurisdiction. The Company is not aware of any pending action
which may result in such an injunction. The Offering would
be terminated by the Company giving oral or written notice
<PAGE>
thereof to the Rights Agent, and making a public announcement
thereof. If the Offering is so terminated, all funds
received from holders of Common Stock will be promptly
refunded without interest. See "Recent Developments."
No Board Recommendation
An investment in the Common Stock must be made pursuant
to each Right holder's or prospective investor's evaluation
of the Offering and of his, her, or its best interests.
Accordingly, the Board of Directors of the Company does not
make any recommendation regarding the purchase, sale,
transfer, or exercise of Rights. The Board of Directors
does, however, encourage Rights holders to carefully consider
either exercising or selling their Rights prior to the
Expiration Date.
Additional Information
If you have questions or require additional information
concerning the Offering, contact the Information Agent at 156
Fifth Avenue, New York, New York 10010, Telephone (800) 322-
2885, Telecopy (212) 929-0308.
USE OF PROCEEDS
The Company intends to use the proceeds of the Offering
to fund the payment to Mr. Speiser for the purchase of shares
of Common Stock pursuant to the Stock Purchase Agreement (as
described below, which shares shall be approximately equal to
the number of shares of Common Stock to be issued in the
Offering), and, to the extent that such proceeds exceed the
aggregate exercise price, to offset costs incurred in
connection with the Offering and for other corporate
purposes. See "Stock Purchase Agreement" for discussion of
the determination of the per share amount to be paid to Mr.
Speiser in exercise of the Options covering shares to be
offered hereunder.
STOCK PURCHASE AGREEMENT
Mr. Speiser, his wife, and entities controlled by them
are currently the beneficial holders of 3,565,846 shares of
the 7,982,424 outstanding shares of common stock $.01 par
value of the Company (the "Common Stock"). Of these
3,565,846 shares, a total of 1,782,689 are subject to
repurchase by the Company pursuant to the Options. The terms
<PAGE>
of certain 10.375% convertible subordinated debentures (the
"Debentures") more fully described in the Company's annual
report incorporated herein by reference, restrict the
Company's ability to repurchase Company Common Stock, except
in certain circumstances, one of which is repurchase with the
proceeds of the substantially concurrent sale of Common
Stock.
The Board of Directors of the Company, has concluded
that it is in the best interests of the Company and its
stockholders to increase the number of shares of the
Company's Common Stock in the hands of non-affiliates, and
that it is likely that the capital markets will be better
able to analyze and evaluate the performance of the Company
from a financial perspective if a relatively large percentage
of the Company's outstanding Common Stock were not subject to
repurchase by the Company. The Company and Mr. Speiser
entered into a Stock Purchase Agreement dated as of March 29,
1996, as amended (the "Stock Purchase Agreement") pursuant to
which this Offering is being effected. Under the Stock
Purchase Agreement, Mr. Speiser will provide the shares of
Common Stock for purchase by the Company in an amount
approximately equal to the number of shares of Common Stock
to be issued to subscribers in the Subscription Rights Offer.
Pursuant to the Stock Purchase Agreement, the Company
has agreed to (a) undertake this Offering; (b) set the
Offering exercise price per share at an amount not less than
the Company's weighted average purchase price for all
1,782,689 shares subject to the 1991 Option and the 1994
Option (the "Average Option Price"); and (c) amend the 1991
Option and the 1994 Option to permit the partial exercise of
each option agreement in proportion to the total number of
shares subscribed for pursuant to the Offering, producing a
per share exercise price equal to the Average Option Price.
As of July 31, 1996 the per share exercise price was $0.46
for the 1,207,689 shares under the 1991 Option and the per
share exercise price was $2.36 for the 575,000 shares under
the 1994 Option, and the Average Option Price for all
1,782,689 shares subject to the Options was $1.07 per share.
Under the terms of the Stock Purchase Agreement, upon
conclusion of the Offering Mr. Speiser will retain the
512,869 shares subject to the Options but not subject to the
Stock Purchase Agreement and all unsubscribed for shares free
of any option of the Company and the Options shall terminate.
RECENT DEVELOPMENTS
On or about May 21, 1996, two stockholders of the
Company commenced an action against the Company, its
directors, and a former director in the Court of Chancery of
the State of Delaware, in and for the County of Newcastle
(C.A. #15007). The Complaint, which contains direct and
<PAGE>
derivative claims and is styled as both an individual and a
class action, alleges that the defendants have breached their
fiduciary duties insofar as the transactions under the Stock
Purchase Agreement unfairly benefit Mr. Speiser to the
detriment of the other stockholders and violate the terms of
a 1991 Chancery Court order under which a derivative action
was settled.
Plaintiffs sought expedited proceedings and preliminary
injunctive relief. A hearing before the Chancery Court on
Plaintiffs' Motion for a Preliminary Injunction was held on
June 24, 1996. In a Memorandum Opinion dated July 3, 1996,
the Vice Chancellor denied the Plaintiffs' Motion, on the
basis that the Plaintiffs failed to show irreparable harm or
the likelihood of establishing that the 1991 Chancery Court
order was violated. On July 23, 1994, the Delaware Supreme
Court denied the Plaintiffs' interlocutory appeal of the Vice
Chancellor's decision. The Plaintiffs may still seek money
damages after a trial on the merits. No trial date has been
established. The Company continues to believe that the
allegations in the Complaint are without merit and that its
directors have acted scrupulously in the exercise of their
fiduciary duties. The Company also believes that an adverse
determination in this proceeding would not have a materially
adverse effect on the business or financial condition of the
Company. The Company intends to vigorously resist the
efforts of these plaintiffs to interfere with the
effectuation of this Offering and the transactions
contemplated hereunder.
LEGAL MATTERS
The validity of the issuance of the shares of Common
Stock offered hereby will be passed on for the Company by
Hinckley, Allen & Snyder, Boston, Massachusetts.
EXPERTS
The consolidated financial statements and the related
financial statement schedule of the Company as of December
31, 1995, and for the year then ended which were included in
the Company's Annual Report Form 10-K for the year ended
December 31, 1995, and incorporated herein by reference, have
been audited by Coopers & Lybrand L.L.P., independent
auditors as stated in their report appearing therein. The
consolidated financial statement and related financial
schedules of the Company as of December 31, 1994 and for each
of the two years in the period ended December 31, 1994 which
were included in the Company's Annual Report on Form 10-K for
<PAGE>
the year ended December 31, 1995, and incorporated herein by
reference have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing
therein. In each case, these financial statements have been
so incorporated herein by reference in reliance upon the
respective reports of each such firm given upon their
authority as experts in accounting and auditing.
<PAGE>
<PAGE>
HEALTH-CHEM CORPORATION
_____________________
No dealer, salesman or other person has been authorized
to give any information or to make any representations not
contained in this Prospectus in connection with the offer
contained in this Prospectus by the Company. This Prospectus
does not constitute an offer to sell or the solicitation of
any offer to buy the securities offered hereby by anyone in
any jurisdiction in which such offer or solicitation is not
authorized, or to any person to whom it is unlawful to make
such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that information herein
is correct as of any time subsequent to the date hereof.
_____________________
TABLE OF CONTENTS
Page
Additional Information
Documents Incorporated by Reference
The Offering
Use of Proceeds
Stock Purchase Agreement
Recent Developments
Legal Matters
Experts
_______________________
Prospectus dated August 2, 1996
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits.
Exhibit No. Description of Exhibit
8 Tax Matters Opinion of Hinckley, Allen & Snyder
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Hinckley, Allen & Snyder (included
in Exhibit 8)
II-1
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to (a) the incorporation by reference in this
registration statement of Health-Chem Corporation on Form S-3
(File No. 333-02411), as amended, of our report dated March
15, 1996, (except for the last two paragraphs of Note 9 which
are dated as of March 26, 1996) on our audit of the
consolidated financial statements and financial statement
schedule of Health-Chem Corporation as of December 31, 1995
and for the year then ended which report is included in the
1995 annual report on Form 10-K, which is incorporated by
reference in this Registration Statement on Form S-3 and (b)
the reference to us under the heading "Experts" in the
Prospectus which is part of said Registration Statement.
COOPERS & LYBRAND L.L.P.
One South Market Square
Harrisburg, PA
July 29, 1996
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this
Registration Statement of Health-Chem Corporation on Form S-3
(File No. 333-02411), as amended, of our report dated March
15, 1995, on our audit of the consolidated financial
statements and financial statement schedule of Health-Chem
Corporation appearing in the Health-Chem Corporation Annual
Report on Form 10-K for the year ended December 31, 1995, and
to the reference to us under the heading "Experts" in the
Prospectus which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Baltimore, MD
July 29, 1996
<PAGE>
<PAGE> SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds
to believe that it meets all the requirements for filing on
Form S-3 and has duly caused this Amendment No. 1 to its
Registration Statement (File No. 333-02411) to be signed on
its behalf by the undersigned, thereunto duly authorized in
The City of New York, State of New York on July 29, 1996.
HEALTH-CHEM CORPORATION
By:/s/ Marvin M. Speiser
Marvin M. Speiser, President
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates
indicated.
Name and Signature Title(s) Date
/s/ Marvin M. Speiser
Marvin M. Speiser President, Chief July 29, 1996
Executive Officer
and Chairman of
the Board
(Principal
Executive Officer)
/s/ Robert D. Speiser
Robert D. Speiser Executive Vice July 29, 1996
President and
Director
/s/ Steven Bernstein*
Steven Bernstein Senior Vice President July 29, 1996
and Director
/s/ Paul R. Moeller*
Paul R. Moeller Vice President - July 29, 1996
Finance and Director
(Principal Financial
and Principal
Accounting Officer)
/s/ Bruce M. Schloss Vice President, July 29, 1996
Bruce M. Schloss Secretary and
Director
<PAGE>
Name and Signature Title(s) Date
/s/ Matthew Goldstein*
Matthew Goldstein Director July 29, 1996
/s/ Samuel R. Goodson*
Samuel R. Goodson Director July 29, 1996
/s/ Eugene Roshwalb*
Eugene Roshwalb Director July 29, 1996
/s/ Milton Y. Zussman*
Milton Y. Zussman Director July 29, 1996
*By /s/ Bruce M. Schloss, Attorney-In-Fact
<PAGE>
June 11, 1996
Health-Chem Corporation
1212 Avenue of the Americas
New York, NY 10036
Re: Health-Chem Corporation
Gentlemen:
We have acted as special counsel to Health-Chem Corporation (the
"Company") in connection with the registration under the Securities Act
of 1933, as amended (the "Act") of up to 1,320,000 shares of the
Company's common stock $.01 par value per share (the "Shares") and of
certain transferable subscription rights (the "Rights") to purchase such
Shares, pursuant to Registration Statement No. 333-02411 on Form S-3 (the
"Registration Statement").
You have requested us to advise you of our opinion with respect to
material federal income tax consequences to holders of common stock upon
the issuance of Rights and to Rights holders upon exercise and
disposition of the Rights.
This opinion is based on the provisions of the Internal Revenue Code of
1986, as amended (the "Tax Code"), final, temporary and proposed treasury
regulations thereunder, and administrative and judicial interpretations
thereof, all as in effect as of the date hereof and all of which are
subject to change (possibly on a retroactive basis). Legislative,
judicial or administrative changes or interpretations could alter or
modify the tax discussion set forth below. This discussion does not
<PAGE>
Health-Chem Corporation
June 11, 1996
Page 2
purport to deal with all aspects of federal income taxation that may be
relevant to a particular Rights holder in light of such Rights holder's
personal investment circumstances or to certain types of Rights holders
subject to special treatment under the federal income tax laws. This
opinion does not consider any aspects of state, local or foreign
taxation.
Finally, substantial uncertainties resulting from the lack of definitive,
judicial or administrative authority and interpretation apply to various
tax issues addressed herein. The Company has not sought nor does it
intend to seek, any rulings from the Internal Revenue Service relating
to such issues or any other issues.
Based on the Registration Statement, and the foregoing, we are of the
following opinion.
1. Holders of common stock will not recognize taxable income, for
federal income tax purposes, in connection with the receipt of the
Rights.
2. Unless a shareholder elects otherwise (as provided in (ii) below),
if the fair market value of the Rights on the date of issuance is
less than 15% of the fair market value (on the date of issuance)
of the common stock with respect to which the Rights are received,
the basis of the Rights received by a shareholder as a distribution
with respect to such shareholder's common stock will be zero. If,
however, either (i) the fair market value of the Rights on the date
of issuance is 15% or more of the fair market value (on the date
of issuance) of the common stock with respect to which the Rights
are received or (ii) the shareholder elects, in his or her federal
income tax return for the taxable year in which the Rights are
received, to allocate part of the basis of such common stock to the
Rights, then upon exercise or transfer of the Rights, the
shareholder will allocate such shareholder's basis in such common
stock between the common stock and the Rights in proportion to the
fair market values of each on the date of issuance, except that,
in either case, no allocation of basis will be made to the Rights
<PAGE>
Health-Chem Corporation
June 11, 1996
Page 3
if the Rights expire unexercised. The holding period of a
shareholder with respect to the Rights received as a distribution
on such shareholder's common stock will include the shareholder's
holding period for the common stock with respect to which the
Rights are issued. With respect to a purchaser's Rights, the tax
basis of such Rights will be equal to the purchase price paid
therefor and the holding period for such Rights will begin on the
date following the date of purchase.
3. Holders of common stock who sell the Rights received in the
issuance prior to exercise will recognize gain or loss equal to the
difference between the sale proceeds and the basis of such
shareholder, if any, in the Rights sold. Such gain or loss will
be capital gain or loss if gain or loss from the sale of common
stock held by such shareholder would be characterized as capital
gain or loss at the time of such sale. Any gain or loss recognized
on a sale of Rights acquired by purchase will be capital gain or
loss if common stock would, if acquired by the seller, be a capital
asset in the hands of such seller.
4. Upon the lapse of any Rights received by Rights holders on the
issuance, such Rights holder will not recognize any gain or loss,
and no adjustment will be made to the basis of the common stock,
if any, owned by such Rights holders. Upon the expiration of any
Rights purchased by purchasers of the Rights, such purchasers will
be entitled to a loss equal to their tax basis in the Rights. Any
loss recognized on the expiration of the Rights acquired by the
purchase will be a capital loss if common stock would, if acquired
by the seller, be a capital asset in the hands of such seller.
<PAGE>
Health-Chem Corporation
June 11, 1996
Page 4
5. Rights holders will not recognize any gain or loss upon the
exercise of such Rights. The basis of the common stock acquired
through the exercise of the Rights will be equal to sum of the
exercise price therefor and any basis of the Rights holder in such
Rights. The holding period for the common stock acquired through
exercise of the Rights will commence on the date the Rights are
exercised.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to our firm in the Registration
Statement in the section entitled "Legal Matters."
Very truly yours,
HINCKLEY, ALLEN & SNYDER
