<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
--------- ---------.
COMMISSION FILE NO. 0-9036
LANNETT COMPANY, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
STATE OF DELAWARE 23-0787-699
(STATE OF INCORPORATION) (I.R.S. EMPLOYER I.D. NO.)
9000 STATE ROAD
PHILADELPHIA, PA 19136
(215) 333-9000
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND TELEPHONE NUMBER)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
----- ----
As of October 27, 2000, there were 13,206,128 shares of the issuer's common
stock, $.001 par value, outstanding.
Page 1 of 19 pages
Exhibit Index on Page 14
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets as of
September 30, 2000 (unaudited) and
June 30, 2000.............................................................................3
Consolidated Statements of Income
for the three months ended September 30, 2000
and 1999 (unaudited)......................................................................4
Consolidated Statements of Cash Flows
for the three months ended September 30, 2000
and 1999 (unaudited)......................................................................5
Notes to Consolidated Financial
Statements (unaudited)................................................................6 - 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations...............................................................................8 - 11
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings............................................................................11
ITEM 2. Changes in Securities and Use of Proceeds....................................................12
ITEM 3. Defaults upon Senior Securities..............................................................12
ITEM 4. Submission of Matters to a Vote of Security Holders..........................................12
ITEM 5. Other Information............................................................................12
ITEM 6. Exhibits and Reports on Form 8-K.............................................................14
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
LANNETT COMPANY, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
ASSETS 9/30/00 6/30/00
------ -------- -------
<S> <C> <C>
CURRENT ASSETS:
Cash $ - $ -
Trade accounts receivable (net of allowance of $43,000 and $63,000) 463,114 1,047,518
Inventories 3,726,399 2,950,176
Prepaid expenses 89,954 495,961
Deferred tax asset - 46,137
- -----------
Total current assets 4,279,467 4,539,792
----------- -----------
PROPERTY, PLANT AND EQUIPMENT 8,372,265 7,652,539
Less accumulated depreciation (2,874,627) (2,698,355)
----------- -----------
5,497,638 4,954,184
RESTRICTED CASH EQUIVALENTS 1,626,873 2,026,445
OTHER ASSETS 256,364 266,947
DEFERRED TAX ASSET 832,736 1,026,599
----------- -----------
Total assets $12,493,078 $12,813,967
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIENCY)
CURRENT LIABILITIES:
Line of Credit 829,986 1,058,524
Accounts payable 475,065 747,200
Accrued expenses 264,052 494,499
Current portion of long-term debt 703,746 692,496
----------- -----------
Total current liabilities 2,272,849 2,992,719
----------- -----------
LONG-TERM DEBT, LESS CURRENT PORTION 4,422,103 4,605,350
----------- -----------
LINE OF CREDIT - SHAREHOLDER 4,225,000 4,225,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY/(DEFICIENCY):
Common stock -
authorized 50,000,000 shares par value $.001:
issued and outstanding, 5,206,128 shares 13,206 13,206
Additional paid-in capital 2,312,575 2,312,575
Accumulated deficit (752,655) (1,334,883)
----------- -----------
Total shareholders' equity 1,573,126 990,898
----------- -----------
Total liabilities and shareholders' equity $12,493,078 $12,813,967
=========== ===========
</TABLE>
See notes to consolidated financial statements
3
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LANNETT COMPANY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
9/30/00 9/30/99
------- -------
<S> <C> <C>
NET SALES $ 1,763,965 $ 2,717,193
COST OF SALES 1,454,677 1,848,278
------------ ------------
Gross profit 309,288 868,915
RESEARCH AND DEVELOPMENT EXPENSES 94,059 130,063
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 370,251 300,255
------------ ------------
Operating profit/(loss) (155,022) 438,597
------------ ------------
OTHER INCOME (EXPENSE):
Income from settlement of lawsuit, net of fees 1,173,149 -
Interest income-restricted 29,522 31,436
Interest expense, including $140,217 and $147,650 to shareholder (208,536) (232,291)
------------ ------------
994,135 (200,855)
NET INCOME BEFORE TAXES 839,113 237,742
------------ ------------
TAXES 256,885 7,500
------------ ------------
NET INCOME $ 582,228 $ 230,242
============ ============
BASIC INCOME PER SHARE $ .04 $ .04
============ ============
DILUTED INCOME PER SHARE $ .04 $ .02
============ ============
BASIC WEIGHTED AVERAGE
NUMBER OF SHARES 13,206,128 5,206,128
============ ============
DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES 13,206,128 13,838,758
============ ============
</TABLE>
See notes to consolidated financial statements
4
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LANNETT COMPANY, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
9/30/00 9/30/99
------- -------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 582,228 $ 230,242
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 186,855 160,366
Deferred tax benefit 240,000 -
Changes in assets and liabilities which provided/(used) cash:
Trade accounts receivable 584,404 210,239
Inventories (776,223) (358,991)
Prepaid expenses 406,007 (2,595)
Accounts payable (272,135) 28,129
Accrued expenses (230,447) 15,289
------------ ------------
Net cash provided by operating activities 720,689 282,679
------------ ------------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment (719,726) (113,735)
Restricted cash equivalents for purchase of plant and equipment - (29,058)
- ------------
Net cash used in investing activities (719,726) (142,793)
------------ ------------
FINANCING ACTIVITIES:
Borrowings under line of credit - shareholder - -
Net borrowings/(repayments) under line of credit (228,538) 132,637
Repayments of accrued interest - shareholder - (227,603)
Repayments of debt (171,997) (161,924)
Proceeds from debt, net of restricted cash 399,572 -
------------ -
Net cash used in financing activities (963) (256,890)
------------ ------------
NET DECREASE IN CASH - (117,004)
CASH, BEGINNING OF YEAR - 117,004
------------ ------------
CASH, END OF PERIOD $ - $ -
============ ============
</TABLE>
See notes to consolidated financial statements
5
<PAGE> 6
LANNETT COMPANY, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position
and the results of operations and cash flows.
The results of operations for the three months ended September 30, 2000 and
1999 are not necessarily indicative of results for the full year.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these consolidated
financial statements be read in conjunction with the consolidated financial
statements and the notes included in the Company's Annual Report on Form
10-KSB for the year ended June 30, 2000.
NOTE 2. NEW ACCOUNTING STANDARDS
In July 2000, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities.
This statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This statement, as amended by SFAS No. 137, Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date of
FASB Statement No. 133, was effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. There has been no accounting, or financial effect
on the Company for the quarter ended September 30, 2000 with respect to this
Statement. The Company will continue to analyze the impact, if any, of adopting
SFAS No. 133 will have on its consolidated financial position and results of
operations.
NOTE 3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
---------------- ------------
(unaudited)
<S> <C> <C>
Raw materials $ 1,248,137 $ 785,795
Work-in-process 741,753 1,023,521
Finished goods 1,448,989 899,686
Packaging supplies 287,520 241,174
------------ -------------
$ 3,726,399 $ 2,950,176
============= =============
</TABLE>
6
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NOTE 4. INCOME TAXES
The provision for state income taxes for the three months ended
September 30, 2000 was $20,000. The provision for federal income taxes for
the three months ended September 30, 2000 was $236,885. The provisions for
state and federal income taxes for the three months ended September 30, 1999
were eliminated by the utilization of federal net operating loss carryforwards,
with the exception of $7,500 in federal income taxes.
NOTE 5. RELATED PARTY TRANSACTIONS
The Company had sales of approximately $16,000 and $2,017,000 during the
three months ended September 30, 2000 and 1999, respectively, to a distributor
(the "related party") in which the owner is a relative of the Chairman of the
Board of Directors and principal shareholder of the Company. The Company also
paid sales commissions to the related party of approximately $144,000 during the
three months ended September 30, 2000. Accounts receivable includes amounts due
from the related party of approximately $9,000 and $13,000 at September 30, 2000
and June 30, 2000, respectively. Accrued expenses includes amounts due to the
related party of approximately $22,000 and $71,000 at September 30, 2000 and
June 30, 2000, respectively.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS.
In addition to historical information, this Form 10-QSB contains
forward-looking information. The forward-looking information contained herein is
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected in the forward-looking statements.
Important factors that might cause such a difference include, but are not
limited to, those discussed in the following section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date of this Form
10-QSB. The Company undertakes no obligation to publicly revise or update these
forward-looking statements to reflect events or circumstances which arise later.
Readers should carefully review the risk factors described in other documents
the Corporation files from time to time with the Securities and Exchange
Commission, including the Annual report on Form 10-KSB filed by the Corporation
in Fiscal 2000, and any Current Reports on Form 8-K filed by the corporation.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED
WITH THREE MONTHS ENDED SEPTEMBER 30, 1999.
Net sales for the three months ended September 30, 2000 ("First Quarter
Fiscal 2001") decreased by 35.1% to $1,763,965 from net sales of $2,717,193 for
the three months ended September 30, 1999 ("First Quarter Fiscal 2000"). Sales
decreased during First Quarter Fiscal 2001 due mainly to decreased sales of the
Company's Over-The-Counter ("OTC") product line. OTC sales decreased by
approximately $825,000 from First Quarter Fiscal 2000 to First Quarter Fiscal
2001. Prescription sales decreased by approximately $128,000 from First Quarter
Fiscal 2000 to First Quarter Fiscal 2001. This decrease in sales is a result of
increased competition, and market conditions. The Company expects to increase
sales by introducing more products into its line, and using additional sales and
marketing resources.
Cost of sales decreased by 21.3%, to $1,454,677 in First Quarter Fiscal
2001 from $1,848,278 in First Quarter Fiscal 2000. The cost of sales decrease is
due to the decrease in sales from the First Quarter Fiscal 2000 to the First
Quarter Fiscal 2001, offset by lower absorption of fixed overhead and production
costs. Gross profit margins for First Quarter Fiscal 2001 and First Quarter
Fiscal 2000 were 17.5% and 32.0%, respectively. The decrease in the gross profit
percentage is due to reduced sales combined with a lower absorption of fixed
overhead and production costs.
Selling, general and administrative expenses increased by 23.3% to
$370,251 in First Quarter Fiscal 2001 from $300,255 in First Quarter Fiscal
2000. This increase is a result of an increase in commissions to sales
representatives for incremental sales programs.
As a result of the foregoing, the Company reported an operating loss of
$155,022 for First Quarter Fiscal 2001, as compared to an operating profit of
$438,597 for First Quarter Fiscal 2000.
Included in other income is $1,173,149 in income from settlement of a
lawsuit, net of fees, for First Quarter Fiscal 2001. The lawsuit was initiated
after a chemical supplier failed to supply the Company with raw material for
its manufacturing process, despite the existence of a signed five-year supply
contract. Lannett alleged that the breach of contract delayed the introduction
of one of its products into the marketplace. Consequently, the Company and the
defending party settled the suit out of court. The Company received
approximately $1.5 million in First Quarter Fiscal 2001.
8
<PAGE> 9
The Company incurred approximately $300,000 in legal fees relating to
the lawsuit. These fees were netted with the income received in First Quarter
Fiscal 2001.
The Company's interest expense decrease from $232,291 in First Quarter
Fiscal 2000 to $208,536 in First Quarter Fiscal 2001 as a result of principal
repayments, and lower debt balances.
The Company's income tax expense increased from $7,500 in First Quarter
Fiscal 2000 to $256,885 in First Quarter Fiscal 2001 as a result of the
Company's net operating loss valuation allowance being reduced to zero in the
prior year. Subsequent to this, the Company thereby reduces its deferred tax
benefit for current income tax expenses.
The Company reported net income of $582,228 for First Quarter Fiscal
2001, $0.04 basic income per share, $0.04 on a diluted basis, compared to net
income of $230,242 for First Quarter Fiscal 2000, $0.04 basic income per share,
$0.02 on a diluted basis.
LIQUIDITY AND CAPITAL RESOURCES -
Net cash provided from operating activities of $720,689 during First
Quarter Fiscal 2001 was attributable to net income of $582,228 as adjusted for
the effects of non-cash items of $426,855 and changes in operating assets and
liabilities totaling ($288,394). Significant changes in operating assets and
liabilities are comprised of: i) a decrease in accounts receivable of $584,404
due to better collection terms, and decreased sales, ii) an increase in
inventories of $776,223 due to increases in raw materials, and finished goods in
anticipation of increased sales levels in Fiscal 2001, and iii) an decrease in
prepaid expenses of $406,007 due primarily to the Company's settlement of a
lawsuit in which previously capitalized legal fees related to the suit were
charged to operations in First Quarter Fiscal 2001.
The net cash used in investing activities consisted of $719,726
expended during First Quarter Fiscal 2001 primarily for machinery and equipment.
The Company has budgeted for $1,500,000 in capital expenditures in Fiscal 2001.
The anticipated additional capital expenditure requirements will support the
Company growth from new product introductions. As of September 30, 2000,
approximately $1,627,000 from the proceeds of the bonds issued during Fiscal
1999 was available in financing restricted for certain future capital
expenditures.
The Company has a $4,250,000 revolving line of credit from a
shareholder who is also the Chairman of the Board ("Shareholder Line of
Credit"). At September 30, 2000, the Company has $4,225,000 outstanding and
$25,000 available under this line of credit. The maturity date on the
Shareholder Line of Credit was extended to October 1, 2001. Accrued interest at
September 30, 2000, and June 30, 2000 was $0 and $22,977, respectively.
The Company also had a convertible debenture made available to it by
William Farber. The maturity date of the shareholder debenture was December 23,
1999. On December 22, 1999, William Farber elected to convert the debenture into
shares of common stock of the Company. The shareholder debenture and accrued
interest was convertible at the rate of 4,000 shares of common stock for each
$1,000 of outstanding indebtedness. The principal balance on the debenture at
the time of conversion was $2,000,000, and the interest on the debenture was
paid to date; therefore the transaction converted the $2,000,000 of indebtedness
to 8,000,000 shares of the Company's common stock.
In April 1999, the Company entered into a loan agreement (the
"Agreement") with a governmental authority (the "Authority") to finance future
construction and growth projects of the Company. The Authority has issued
$3,700,000 in tax-exempt variable rate demand and fixed rate revenue bonds to
provide the funds to finance such growth projects pursuant to a trust indenture
(the "Trust Indenture"). A portion of the Company's proceeds from the bonds was
used to pay for bond issuance costs of approximately $170,000. The remainder of
the proceeds
9
<PAGE> 10
were deposited into a money market account, which is restricted to
future plant and equipment needs of the Company as specified in the Agreement.
The Agreement requires the Company to repay the Authority loan through
installment payments beginning in May 2003 and continuing through May 2014, the
year the bonds mature. At September 30, 2000, the Company had $3,700,000
outstanding on the Authority loan, which is classified as a long-term liability.
In April 1999, an irrevocable letter of credit of $3,770,000 was issued by a
bank to secure payment of the Authority Loan and a portion of the related
accrued interest. At September 30, 2000, no portion of the letter of credit has
been utilized.
In April 1999, the Company authorized and directed the issuance of
$2,300,000 in taxable variable rate demand and fixed rate revenue bonds pursuant
to a trust indenture between the Company and a bank as trustee (the "Trust
Indenture"). From the proceeds of the bonds, $750,000 was utilized to pay
deferred interest owed to the principal shareholder of the Company and
approximately $1,440,000 was paid to a bank to refinance a mortgage term loan
and equipment term loans. The remainder of the proceeds was used to pay bond
issuance costs of approximately $109,000. The Trust Indenture requires the
Company to repay the bonds through installment payments beginning in May 2000
and continuing through May 2003, the year the bonds mature. At September 30,
2000, the Company had $2,094,361 outstanding on the bonds, of which $681,663 is
classified as currently due. In April 1999, an irrevocable letter of credit of
approximately $2,349,000 was issued by a bank to secure payment of the bonds and
a portion of the related accrued interest. At September 30, 2000 no portion of
the letter of credit has been utilized.
The Company has a $2,000,000 line of credit from a bank. The line of
credit is due October 31, 2000, at which time the Company expects to renew and
extend the due date. The line of credit is limited to 80% of qualified accounts
receivable and 50% of qualified inventory. At September 30, 2000, the Company
had $829,986 outstanding under the line of credit, including $310,429 of
payments in transit not yet recorded by the bank. At September 30, 2000, the
Company had $1,170,014 available under the line of credit.
The Company believes that cash generated from its operations and the
balances available under the Company's existing loans and lines of credit as of
September 30, 2000, are sufficient to finance its level operations and currently
anticipated capital expenditures.
Except as set forth in this report, the Company is not aware of any
trends, events or uncertainties that have or are reasonably likely to have a
material adverse impact on the Company's short-term or long-term liquidity or
financial condition.
PROSPECTS FOR THE FUTURE
As of September 30, 2000, fifteen additional products are under
development. Four of these products are being developed and manufactured for
other companies; and the other eleven products are being developed as part of
the Lannett product line. Three of the Lannett products have been redeveloped
and submitted to the Federal Drug Administration ("FDA") for supplemental
approval. Five additional products represent previously approved Abbreviated New
Drug Applications ("ANDA's") which the Company is planning to reintroduce. The
other three Lannett products represent new products that the Company is planning
to introduce. Since the Company has no control over the FDA review process,
management is unable to anticipate when it will be able to begin producing and
shipping additional products.
10
<PAGE> 11
YEAR 2000
The Year 2000 issue relates to limitations in computer systems and applications
that may prevent proper recognition of the Year 2000. The potential full effect,
if any, of the Year 2000 issue on the company and its business partners will not
be fully determinable until later. If problems related to the Year 2000 arise
(e.g. with significant suppliers, changes in demand, etc.) within the company or
entities with which the company conducts business, the company's revenues and
financial condition could be adversely impacted.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Regulatory Proceedings. The Company is engaged in an industry, which is subject
to considerable government regulation relating to the development, manufacturing
and marketing of pharmaceutical products. Accordingly, incidental to its
business, the Company periodically responds to inquiries or engages in
administrative and judicial proceedings involving regulatory authorities,
particularly the FDA and the Drug Enforcement Agency.
Employee Claim. A claim of retaliatory discrimination has been filed by a former
employee with the Pennsylvania Human Relations Commission ("PHRC"). The Company
has denied liability in this matter, which is being investigated by the PHRC
pursuant to its normal procedures. Management believes that the outcome will not
have a material adverse impact on the financial position of the Company.
A claim of sexual harassment and retaliation also has been filed against the
Company by another former employee. The claim was cross-filed with the PHRC and
with the Equal Employment Opportunity Commission, which already has closed its
file on the charge. The Company has filed an answer with the PHRC denying the
charge, and the PHRC is investigating the claim pursuant to its normal
procedures. Management believes that the outcome of this charge also will not
have a material adverse impact on the financial position of the Company.
DES Cases. The Company is currently engaged in several civil actions as a
co-defendant with many other manufacturers of Diethylstilbestrol ("DES"), a
synthetic hormone. Prior litigation established that the Company's pro rata
share of any liability is less than one-tenth of one percent. The Company was
represented in many of these actions by the insurance company with which the
Company maintained coverage during the time period that damages were alleged to
have occurred. The insurance company denied coverage of actions filed after
January 1, 1992. With respect to these actions, the Company paid nominal damages
or stipulated to its pro rata share of any liability. The Company has either
settled or is currently defending over 500 such claims. Management believes that
the outcome will not have a material adverse impact on the financial position of
the Company.
11
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ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) A list of the exhibits required by Item 601 of Regulation S-B to be
filed as a part of this Form 10-QSB is shown on the Exhibit Index filed
herewith.
(b) The Company did not file any reports on Form 8-K during First Quarter
Fiscal 2001.
12
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SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LANNETT COMPANY, INC.
Dated: October 31, 2000 By: / s / Larry Dalesandro
----------------
Larry Dalesandro
Chief Operating Officer
By: / s / William Farber
--------------
William Farber
Chairman of the Board
13
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing Page
------ ----------- ---------------- ----
<S> <C> <C> <C>
3(a) Articles of Incorporation Incorporated by reference to the Proxy Statement -
filed with respect to the Annual Meeting of
Shareholders held on December 6, 1991 (the "1991
Proxy Statement").
3(b) By-Laws, as amended Incorporated by reference to the 1991 Proxy -
Statement.
4(a) Specimen Certificate for Common Incorporated by reference to Exhibit 4(a) to -
Stock Form 8 dated April 23, 1993 (Amendment No. 3 to
Form 10-K f/y/e June 30, 1992) ("Form 8")
10(a) Loan Agreement dated August 30, Incorporated by reference to the Annual Report -
1991 between the Company and on Form 10-K f/y/e June 30, 1991
William Farber
10(b) Amendment #1 to Loan Agreement Incorporated by reference to Exhibit 10(b) to -
dated March 15, 1993 the Annual Report on Form 10-KSB f/y/e June 30,
1993 ("1993 Form 10-K")
10(c) Amendment #2 to Loan Agreement Incorporated by reference to Exhibit 10(c) to -
dated August 1, 1994 the Annual Report on Form 10-KSB f/y/e June 30,
1994 ("1994 Form 10-K")
10(d) Amendment #3 to Loan Agreement Incorporated by reference to Exhibit 10(d) to -
dated May 15, 1995 the Annual Report on Form 10-KSB f/y/e June 30,
1995 ("1995 Form 10-K")
10(e) Amendment #4 to Loan Agreement Incorporated by reference to Exhibit 10(e) to -
dated December 31, 1995 the Annual Report on Form 10-KSB f/y/e June 30,
1996 ("1996 Form 10-K")
10(f) Amendment #5 to Loan Agreement Incorporated by reference to Exhibit 10(f) to -
dated June 30, 1996 the Annual Report on Form 10-KSB f/y/e June 30,
1996 ("1996 Form 10-K")
Amendment #6 to Loan Incorporated by reference to Exhibit 10(g) to
Agreement dated November 1, the Annual Report on Form 10-KSB f/y/e
10(g) 1996 June 30, 1997 ("1997 Form 10-KSB")
10(h) Amendment #7 to Loan Agreement Incorporated by reference to Exhibit 10(h) to
dated September 9, 1997 the Annual Report on 1997 Form 10-KSB
10(i) Amendment #8 to Loan Agreement Incorporated by reference to Exhibit 10(i) to
dated June 30, the Annual Report on Form 10-KSB f/y/e
</TABLE>
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<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing Page
------ ----------- ---------------- ----
<S> <C> <C> <C>
1998 June 30,1998 ("1998 Form 10-KSB")
10(j) Amendment #9 to Loan Agreement Incorporated by reference to Exhibit 10(j) to
dated December 30, 1998 the Annual Report on Form 10-KSB f/y/e June 30,
1999 ("1999 Form 10-KSB")
10(k) Loan Agreement dated May 4, 1993 Incorporated by reference to Exhibit 10(c) to -
between the Company and Meridian the 1993 Form 10-K
Bank
10(l) Amendment to Loan Documents Incorporated by reference to Exhibit 10(e) to -
between the Company and Meridian the Annual Report on Form 10-KSB f/y/e June 30,
Bank dated as of December 8, 1993 1994 ("1994 Form 10-K")
10(m) Letter Agreement between the Incorporated by reference to Exhibit 10(f) to -
Company and Meridian Bank dated the Annual Report on Form 10-KSB f/y/e June 30,
December 21, 1993 1994 ("1994 Form 10-K")
10(n) Third Amendment to Loan Incorporated by reference to Exhibit 10(g) to -
Agreement dated as of June 9, the Annual Report on Form 10-KSB f/y/e June 30,
1994 1994 ("1994 Form 10-K")
10(o) Fourth Amendment to Loan Incorporated by reference to Exhibit 10(i) to -
Documents between the Company the Annual Report on Form 10-KSB f/y/e June 30,
and Meridian Bank as of October 1995 ("1995 Form 10-K")
27, 1994
10(p) Letter Agreement between the Incorporated by reference to Exhibit 10(j) to -
Company and Meridian Bank dated the Annual Report on Form 10-KSB f/y/e June 30,
October 27, 1994 1995 ("1995 Form 10-K")
10(q) Letter Agreement between the Incorporated by reference to Exhibit 10(k) to -
Company and Meridian Bank dated the Annual Report on Form 10-KSB f/y/e June 30,
July 10, 1995 1995 ("1995 Form 10-K")
10(r) Amendment to Security Agreement Incorporated by reference to Exhibit 10(l) to -
between the Company and Meridian the Annual Report on Form 10-KSB f/y/e
Bank dated as of July 31, 1995 June 30, 1995 ("1995 Form 10-K")
10(s) Line of Credit Note dated July Incorporated by reference to Exhibit 10(m) to -
31, 1995 the Annual Report on Form 10-KSB f/y/e June 30,
1995 ("1995 Form 10-K")
10(t) Fifth Amendment to Loan Incorporated by reference to Exhibit 10(n) to -
Agreement dated July 31, 1995 the Annual Report on Form 10-KSB f/y/e June 30,
1995 ("1995 Form 10-K")
10(u) Amendment to Loan agreement Incorporated by reference to Exhibit 10(q) to -
between the the Annual Report on Form 10-KSB f/y/e
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing Page
------ ----------- ---------------- ----
<S> <C> <C> <C>
Company and Meridian Bank, June 30, 1996 ("1996 Form 10-K")
dated March 5, 1996.
10(v) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated March
20, 1997.
10(w) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated March
20, 1997.
10(x) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated May 23,
1997.
10(y) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated September
24, 1997.
10(z) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated December
10, 1997.
10(aa) Amendment to Loan agreement Incorporated by reference to Exhibit 10(h) to
between the Company and the Annual Report on 1997 Form 10-KSB
Corestates Bank, dated December
10, 1997.
10(ab) Amendment to Loan agreement Incorporated by reference to Exhibit 10(aa) to
between the Company and the Annual Report on 1998 Form 10-KSB
Corestates Bank, dated June
11, 1998.
10(ac) Amendment to Loan agreement Incorporated by reference to Exhibit 10(ab) to
between the Company and the Annual Report on 1998 Form 10-KSB
Corestates Bank, dated June 1998.
10(ad) Line of Credit Note dated Incorporated by reference to Exhibit 10(ad) to
March 11, 1999 the Annual Report on 1999 Form 10-KSB
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing Page
------ ----------- ---------------- ----
<S> <C> <C> <C>
10(ae) Taxable Variable Rate Incorporated by reference to Exhibit 10(ae) to
Demand/Fixed Rate Revenue Bonds, the Annual Report on 1999 Form 10-KSB
Series of 1999
10(af) Philadelphia Authority for Incorporated by reference to Exhibit 10(af) to
Industrial Development the Annual Report on 1999 Form 10-KSB
Tax-Exempt Variable Rate
Demand/Fixed Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999
10(ag) Reimbursement and Agreements Incorporated by reference to Exhibit 10(ag) to
supporting bond issues the Annual Report on 1999 Form 10-KSB
10(ah) Amendment No. 1 to Reimbursement Incorporated by reference to Exhibit 10(i) to
Agreement and Waiver the Annual Report on 1999 Form 10-KSB
10(ai) Employment Agreement between the Incorporated by reference to Exhibit 10(ah) to
Company and Vlad Mikijanic the Annual Report on 1994 Form 10-KSB
10(aj) Supply Agreement dated January Incorporated by reference to Exhibit 10(ad) to
14, 1997 the Annual Report on 1998 Form 10-KSB
10(ak) Supply Agreement dated January Incorporated by reference to Exhibit 10(ae) to
17, 1997 the Annual Report on 1998 Form 10-KSB
10(al) Supply Agreement dated January Incorporated by reference to Exhibit 10(af) to
17, 1997 the Annual Report on 1998 Form 10-KSB
10(am) Supply Agreement dated February Incorporated by reference to Exhibit 10(ag) to
11, 1997 the Annual Report on 1998 Form 10-KSB
10(an) Supply Agreement dated May 27, Incorporated by reference to Exhibit 10(ah) to
1997 the Annual Report on 1998 Form 10-KSB
11 Computation of Per Share Earnings Filed Herewith 18
22 Subsidiaries of the Company Incorporated by reference to the Annual Report
on Form 10-K f/y/e June 30, 1990
23 Consent of Deloitte & Touche Incorporated by reference to Exhibit 23 to the
Annual Report on 1999 Form 10-KSB
27 Financial Data Schedule Filed Herewith 19
</TABLE>
17
