================================================================================
As filed with the Securities and Exchange Commission on October 10, 1995
Registration No. 33-61917
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ROYCE LABORATORIES, INC.
------------------------
(Exact name of registrant as specified in its charter)
Florida
------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
59-2202295
---------------------------------------
(I.R.S. Employer Identification Number)
5350 N.W. 165th Street
Miami, Florida 33014
Telephone: (305) 624-1500
-------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Patrick J. McEnany
President and Chief Executive Officer
Royce Laboratories, Inc.
5350 N.W. 165th Street
Miami, Florida 33014
Telephone: (305) 624-1500
---------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Philip B. Schwartz, Esq.
Akerman, Senterfitt & Eidson, P.A.
One Brickell Square
801 Brickell Avenue, 24th Floor
Miami, Florida 33131
Telephone: (305) 374-5600
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
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]
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. [ ]
================================================================================
<PAGE>
-------------------
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 SECTION 8(A), MAY
DETERMINE.
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Price Aggregate Amount of
Being Per Security Offering Registration
Title of Each Class of Securities Being Registered Registered Price Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(1)........................................... 833,333 $7.625 6,354,164.10 2,190.92
Common Stock issuable upon exercise of the Warrants(2) 833,333 6.50 5,416,664.50 1,867.67
Common Stock issuable upon exercise of the Placement
Agent Warrant(3).......................................... 83,333 6.00 499,998.00 172.40
Common Stock(4)........................................... 6,882 $8.6875 59,787.38 20.62
Common Stock issuable upon exercise of the
Davis Option(5)........................................... 6,667 $5.8125 38,751.94 13.37
- ------------------------------------------------------------------------------------------------------------------------------------
Total Registration Fee.................................... $4,264.98(6)
====================================================================================================================================
<FN>
- ------------------
(1) These shares are being registered on behalf of certain selling
shareholders of the Company pursuant to the Company's registration
obligations owed to such shareholders. See "Selling Shareholders." The
Proposed Maximum Offering Price for these shares is estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457,
based on average of the bid and ask closing price of the Company's Common
Stock on August 15, 1995.
(2) Represents shares of Common Stock issuable to certain selling shareholders
of the Company. These shares are being registered pursuant to the
Company's registration obligations owed to such shareholders. See
"Selling Shareholders." Each Warrant is exercisable at $6.50 per share.
See "Description of the Warrants."
(3) Represents shares of Common Stock issuable to Gruntal and Co. Incorporated
upon the exercise of outstanding common stock purchase warrants. Such
warrants are exercisable at $6.00 per share. See "Description of
Securities Registered - Placement Agent Warrant."
<PAGE>
(4) Represents shares of Common Stock issued to Sheldon Davis Associates, Inc.
("Davis") pursuant to a settlement between Davis and the Company. The
Proposed Maximum Offering Price for these shares is estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457,
based on average of the bid and ask closing price of the Company's Common
Stock on September 28, 1995.
(5) Represents shares of Common Stock issuable to Davis upon the exercise of
outstanding options. Such options are exercisable at $5.8125 per share.
See "Description of Securities Registered -- Davis Option."
(6) A registration fee of $4,230.99 was paid upon the initial filing of this
Registration Statement; therefore, $33.99 is payable in connection with
the filing of this Amendment No. 1.
</FN>
</TABLE>
<PAGE>
ROYCE LABORATORIES, INC.
CROSS-REFERENCE SHEET
REGISTRATION STATEMENT CAPTION OR
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
1. Forepart of Registration Statement and Front Cover Page
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front and Outside Back
of Prospectus Cover Pages of Prospectus
3. Summary Information, Risk Factors and Prospectus Summary; Risk Factors
Ratio of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security-Holders Selling Shareholders; Plan of
Distribution
8. Plan of Distribution Front Cover Page; Selling
Shareholders; Plan of
Distribution
9. Description of Securities to be Registered Description of Securities
Registered
10. Interests of Named Experts and Counsel Experts; Legal Matters
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain
Reference Documents by Reference
13. Disclosure of Commission Position on Not Applicable
Indemnification for Securities Act
Liabilities
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PRELIMINARY PROSPECTUS, DATED OCTOBER 10, 1995
ROYCE LABORATORIES, INC.
COMMON STOCK
Royce Laboratories, Inc. (the "Company") hereby registers 833,333
shares (the "Shares") of its common stock, $.005 par value (the "Common Stock"),
for the account of certain selling shareholders. The Shares were issued in a
private placement which was completed on July 21, 1995 (the "Private
Placement"). See "Description of Securities - Private Placement." The Company is
also registering up to 833,333 shares of its Common Stock issuable upon the
exercise of warrants (the "Warrants") owned by the selling shareholders. The
Warrants were also issued in the Private Placement. See "Description of the
Warrants" for a description of the terms of the Warrants. Additionally, the
Company is registering up to 83,333 shares of its Common Stock issuable upon the
exercise of a warrant (the "Placement Agent Warrant") owned by Gruntal & Co.,
Incorporated ("Gruntal"). Gruntal received the Placement Agent Warrant as part
of its compensation for acting as the Placement Agent in the Private Placement.
See "Description of Securities Registered - Placement Agent Warrant" for a
description of the terms of the Placement Agent Warrant.
The Company is also hereby registering 6,882 shares (the "Davis
Shares") of its Common Stock for the account of Sheldon Davis Associates, Inc.
("Davis") and 6,666 shares of its Common Stock issuable upon the exercise of
options owned by Davis (the "Davis Options"). Davis received the Davis Shares
and the Davis Options pursuant to a settlement of litigation between Davis and
the Company. See "Description of Securities Registered - Davis Options."
The holders of the Shares, the Warrants, the Placement Agent Warrant,
the Davis Shares and the Davis Options (with respect to the shares of common
stock underlying the Warrants and the Placement Agent Warrant and the Davis
Options) may sell the shares of Common Stock registered hereby from time to time
in the public market. See "Plan of Distribution." The Company will receive the
proceeds from the exercise of the Davis Options, the Warrants and the Placement
Agent Warrant (if it is exercised for cash), but will not receive any proceeds
from the sale by the Selling Shareholders, Gruntal or Davis of the shares of
Common Stock offered hereby. The holder of the Placement Agent Warrant has the
right at any time and from time to time to exercise the Placement Agent Warrant
in whole or in part by surrendering the Placement Agent Warrant Certificate in
exchange for the number of shares of Common Stock equal to (x) the number of
shares as to which the Placement Agent Warrants are being exercised multiplied
by (y) a fraction, the numerator of which is the Market Price (as defined in the
Placement Agent Warrant) of the Common Stock at the date of exercise less the
Exercise Price and the denominator of which is such Market Price. The Selling
Shareholders will not bear any of the expenses related to this registration. The
Company is obligated to register the Shares and the shares of Common Stock
underlying the Warrants pursuant to the terms of the purchase agreements
(collectively, the "Purchase Agreement") between the Company and the purchasers
of the Shares and the Warrants and by the terms of the Placement Agent Warrant.
For all purposes hereunder, the registered holders of the Shares and
the Warrants, Davis and Gruntal may sometimes be collectively referred to herein
as the "Selling Shareholders" and the Shares, the Davis Shares and the shares of
Common Stock underlying the Warrants, the Davis Options and the Placement Agent
Warrant may sometimes be collectively referred to herein as the "Registered
Securities."
The Common Stock is quoted on the automated quotation system of the
National Association of Securities Dealers, Inc. ("NASDAQ") under the symbol
"RLAB." On September 28, 1995, the average of the bid and ask closing prices of
the Common Stock was $8.6875 per share.
<PAGE>
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
DISCUSSION UNDER "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION, NOR HAS THE
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 ___________, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., and at its following
regional offices: Suite 788, 1375 Peachtree St. N.E., Atlanta, Georgia 30367;
Suite 1400, 500 West Madison Street, Chicago, Illinois; and 7 World Trade
Center, New York, New York. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Act") with respect
to the securities being offered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits thereto. For further information about the Company and the securities
offered hereby, reference is made to the Registration Statement and to the
exhibits filed as a part thereof. The statements contained in this Prospectus as
to the contents of any contract or other document identified as exhibits in this
Prospectus are not necessarily complete and, in each instance, reference is made
to a copy of such contract or document filed as an exhibit to the Registration
Statement, each statement being qualified in any and all respects by such
reference. The Registration Statement, including exhibits, may be inspected
without charge at the principal reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all
or any part thereof may be obtained upon payment of fees prescribed by the
Commission from the Public Reference Section of the Commission at its principal
office in Washington, D.C. set forth above.
The Company's Common Stock is quoted on NASDAQ under the symbol "RLAB."
All of the reports required to be filed by the Company with NASDAQ and other
information concerning the Company can be inspected at 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are hereby
incorporated by reference in this Prospectus: (1) the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, as amended, (2) the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, (3) the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 and
(4) the Company's Proxy Statement dated June 7, 1995, for use at the Company's
1995 Annual Meeting of Shareholders. Each document filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the date
of this Prospectus but prior to the termination of this offering to which this
Prospectus relates, shall be deemed to be incorporated by reference in this
Prospectus and made a part of this Prospectus from the date any such document is
filed. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents described above, other than exhibits to such
documents (unless such exhibits have been specifically incorporated by reference
therein). Requests for such copies should be directed to Robert E. Band, Vice
President - Finance, at the principal executive offices of the Company at 5350
N.W. 165th Street, Miami, Florida 33014, telephone (305) 624-1500.
-3-
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION, FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE
IN THIS PROSPECTUS. EACH INVESTOR IS URGED TO READ THIS PROSPECTUS IN ITS
ENTIRETY. UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL INFORMATION IN THIS
PROSPECTUS (I) HAS BEEN ADJUSTED TO REFLECT A ONE-FOR-THREE REVERSE STOCK SPLIT
OF THE OUTSTANDING COMMON STOCK WHICH BECAME EFFECTIVE ON DECEMBER 23, 1993, AND
(II) ASSUMES NO EXERCISE OF ANY OUTSTANDING OPTIONS OR WARRANTS.
INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE
HEADING "RISK FACTORS."
THE COMPANY
The Company develops, manufactures and markets generic prescription and
over-the-counter drugs in solid dosage form (tablets and capsules). Tablets and
capsules comprise the largest portion of the prescription pharmaceutical market.
As of the date of this Prospectus, the Company manufactures and markets the
following generic pharmaceutical products:
<TABLE>
<CAPTION>
BRAND NAME
PRODUCT NAME EQUIVALENT USE
- ------------ ---------- ---
<S> <C> <C>
Chlorzoxazone Parafon Forte(Registered trademark) Muscle relaxant
Doxepin Hydrochloride Sinequan(Registered trademark) Tranquilizer
Yohimbine Hydrochloride Yocon(Registered trademark) Sympathicolytic
and mydriatic
Perphenazine and Amitriptyline Triavil(Registered trademark) Anti-depressant
Hydrochloride
Amiloride Hydrochloride and Moduretic(Registered trademark) Anti-hypertensive
Hydrochlorothiazide
Lorazepam Ativan(Registered trademark) Tranquilizer
Baclofen Lioresal(Registered trademark) Muscle relaxant
Hydroxyzine Hydrochloride Atarax(Registered trademark) Tranquilizer
Cyclobenzaprine Hydrochloride Flexeril(Registered trademark) Muscle relaxant
Pindolol Visken(Registered trademark) Anti-hypertensive
Quinine Sulfate none Anti-malarial
</TABLE>
The Company has filed abbreviated new drug applications ("ANDAs") with
the Food and Drug Administration ("FDA") for ten additional products in 18
dosage strengths. Since January 1994, the FDA has approved the Company's ANDAs
for six generic prescription drugs and has also tentatively approved the
Company's ANDA for a seventh generic prescription drug. The Company's ANDA for
Piroxicam was approved in September 1995 and the Company expects to commence
distribution of this product during the fourth quarter of 1995. The Company
currently has approximately 20 products under development and expects to file
ANDAs for approximately 10 to 12 products over the next 12 months.
Generic drugs are the chemical and therapeutic equivalents of
brand-name drugs for which patents and/or marketing exclusivity rights have
expired. Although subject to the same standards for safety and effectiveness as
their brand name equivalents, generic drugs are typically sold under their
chemical names, typically at prices substantially below their brand name
equivalents. The Company
-4-
<PAGE>
believes that the market for generic pharmaceuticals has grown and will continue
to grow because of various factors, including the aging of the U.S. population,
continuing efforts to contain health care costs by governmental agencies, health
care institutions and third party payors, and the increasing awareness and
acceptance of generic drugs by physicians, pharmacists and consumers.
The Company's objective is to increase the number of products offered
while being an efficient, low cost manufacturer of generic pharmaceuticals. The
Company's product development strategy is to focus on selected niche products,
as well as on drugs such as Captopril, whose brand name equivalents have U.S.
sales of over $100 million. The Company has identified a number of products
which it believes offer growth opportunities, such as drugs having a controlled
substance as one of their active ingredients, certain overlooked products and
selected drugs with difficult-to-develop formulations. The Company sells its
products primarily to drug wholesalers, generic drug distributors, retail buying
groups, managed care organizations and drug chains. The Company believes that
its willingness to manufacture products under a customer's private label
provides an additional opportunity for growth since many of the larger generic
drug companies do not manufacture private label products. The Company believes
it has an efficient manufacturing facility and that it will realize significant
operating leverage as its sales volume increases.
The Company maintains its executive offices at 5350 N.W. 165th Street,
Miami, Florida 33014. Its telephone number is (305) 624-1500.
RECENT DEVELOPMENTS
In March 1995, the Company received a tentative approval from the FDA
of the Company's ANDA for Captopril (a generic version of Capoten(Registered
trademark)), an anti-hypertensive drug. In order to market Captopril, the
Company must receive final approval of its ANDA, which will not be granted until
the expiration of patent protection for Capoten(Registered trademark) and is
subject to the Company remaining in substantial compliance with current good
manufacturing practices. During 1994, sales of Capoten(Registered trademark) in
the United States were approximately $581 million.
Under the recently adopted General Agreement on Tariffs and Trade
("GATT") treaty implementing legislation, patent protection for
Capoten(Registered trademark) was extended from August 8, 1995 until February
13, 1996. However, on June 26, 1995, the Company asserted in a certification
filed with the FDA that under GATT, the Company should have the right to market
Captopril after August 8, 1995, subject to the Company's possible obligation to
pay "equitable remuneration" to Bristol-Myers Squibb Company, Inc. and E.R.
Squibb & Sons, Inc. (collectively, "Bristol-Myers") during the period between
August 8, 1995 and February 13, 1996 (the "Delta Period"). Bristol-Myers holds
the patent for Capoten. On August 4, 1995, the Company was sued by Bristol-Myers
for patent infringement relating to Captopril. The suit was brought in the U.S.
District Court for the Southern District of Florida (the "District Court") (Case
No. 95-1682). This lawsuit was filed by Bristol-Myers in response to the filing
of the certification by the Company.
On August 11, 1995, the Company filed an emergency motion with the
District Court seeking to dismiss Bristol-Myers' complaint and to set aside the
statutory injunction (the "Injunction") (which arises automatically under the
Drug Price Competition and Patent Term Restoration Act of 1984) upon the filing
of an infringement action. The Injunction prohibits the FDA from approving the
Company's ANDA for the product in question until the issue of infringement is
resolved by the District Court.
On August 24, 1995, the District Court ruled on the Company's emergency
motion. The District Court stated in its order (the "Order") that under the GATT
treaty, the Company's
-5-
<PAGE>
manufacture, use or sale of Captopril during the Delta Period will not infringe
upon Bristol-Myers' patent for Capoten(Registered trademark). Based upon this
determination, the District Court granted the Company's Emergency Motion to set
aside the Injunction, ruling that the "Injunction prohibiting the FDA from
approving [the Company's] ANDA is dissolved." The District Court further
dismissed Bristol-Myers' complaint for patent infringement. However, the
District Court denied the Company's request that the District Court order an
immediate effective date of the Company's ANDA for Captopril, stating that since
the Inunction has now been lifted, the FDA is "free to immediately approve [the
Company's] ANDA," but that the Company must receive a final approval letter for
this product before it can actually enter the market.
Bristol-Myers has appealed the Order. The Company is vigorously
contesting the appeal. The appeal has been fully briefed and oral argument is
scheduled for October 11, 1995. No assurance can be given as to the outcome of
the appeal.
On or about August 24, 1995, the Company advised the FDA of the
District Court's Order and requested final approval of its ANDA for Captopril.
The FDA has advised the Company that it will delay approval of the Company's
ANDA for Captopril during the pendency of Bristol-Myers' appeal of the Order. On
September 12, 1995 the Company filed a petition with the U.S. Court of Appeals
(the "Court of Appeals") seeking review of the decision by the FDA to delay
approval of the Company's ANDA for Captopril and seeking an order from the Court
of Appeals directing the FDA to immediately issue a final approval of such ANDA.
The appeal is presently being briefed and oral argument is scheduled to be heard
by the Court of Appeals on November 16, 1995. No assurance can be given as to
the outcome of these proceedings.
See "Risk Factors - Tentative Approval of Captopril and General
Agreement on Tariffs and Trade ("GATT") Treaty."
USE OF PROCEEDS
The Company will receive none of the proceeds from sales of the
Registered Securities by the Selling Shareholders. Any proceeds received by the
Company upon the exercise of the Warrants and the Placement Agent Warrant will
be used for working capital.
OUTSTANDING SHARES
As of August 14, 1995, the following Company securities were
outstanding: (i) 12,815,979 shares of Common Stock; and (ii) options and
warrants to purchase an additional 3,064,458 shares of Common Stock.
PLAN OF DISTRIBUTION
The distribution of the Common Stock by the Selling Shareholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market, on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), or any exchange on
which the Common Stock may then be listed, in negotiated transactions, through
the writing of options on shares (whether such options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling shares to or through broker-dealers, and such
-6-
<PAGE>
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or purchasers of
shares for whom they may act as agent (which compensation may be in excess of
customary commissions).
The Selling Shareholders may also sell such shares pursuant to Rule 144
promulgated under the Act, or may pledge shares as collateral for margin
accounts and such shares could be resold pursuant to the terms of such accounts.
The Selling Shareholders and any broker-dealers that act in connection with the
sale of Common Stock might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Act and any commissions received by them and any profit on
the resale of the shares might be deemed to be underwriting discounts or
commissions under the Act. The Selling Shareholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the Common Stock against certain liabilities, including liabilities arising
under the Act.
-7-
<PAGE>
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA AND FOOTNOTES)
THE SUMMARY FINANCIAL DATA SET FORTH BELOW IS DERIVED FROM THE
COMPANY'S FINANCIAL STATEMENTS AND SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND THE NOTES THERETO.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
YEARS ENDED DECEMBER 31, (UNAUDITED)
-------------------------------------------------------- -----------
1990 1991 1992 1993 1994 1994 1995
---- ---- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA(1)
- -----------------
Net sales............................ $1,504 $1,991 $2,423 $3,519 $6,191 $2,464 $4,157
Gross profit......................... 203 541 25 443 1,561 501 1,261
Research and development............. 132 196 283 305 960 343 668
Selling, general and
administrative expenses........... 463 665 2,232 2,001 2,189 1,075 1,395
Operating loss....................... (392) (320) (3,060) (1,887) (1,605) (932) (802)
Other income (expense)............... (119) 42 162 (2,046)(2) 128 26 55
Net income (loss).................... (433) 68(3) (2,898) (3,933) (1,477) (906) (747)
Net income (loss) per
common share....................... $ (.18) $ .01 $ (.31) $ (.41) $ (.14) $ (.09) $ (.06)
Weighted average number of
shares outstanding................. 2,467 7,897 9,321 9,493 10,554 9,840 11,965
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1995
(UNAUDITED)
DECEMBER 31, DECEMBER 31, -----------
1993 1994 ACTUAL ADJUSTED(4)
-------------- --------------- ------ -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA
- ------------------
Working capital.......................... $2,800 $5,300 $4,347 $8,923
Total assets............................. 4,103 8,273 7,116 11,692
Current liabilities...................... 638 1,885 1,304 1,304
Long-term debt........................... - 33 156 156
Stockholders' equity..................... 3,465 6,355 5,656 10,232
<FN>
- ------------------
(1) Certain amounts presented in prior years' financial data have been
reclassified to conform to current year's presentation.
(2) Includes primarily non-cash charges to earnings, including $1,336,000 in
connection with the settlement of the class action and other litigation
and $768,000 in connection with the write-off of Piroxicam inventory and
related items.
(3) Includes a gain on settlement of indebtedness of $346,000.
(4) Adjusted to reflect the sale of 833,333 shares of Common Stock in the
Private Placement and the application of approximately $4,576,000 of the
net proceeds therefrom. See "Description of Securities Registered -
Private Placement."
</FN>
</TABLE>
-8-
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK. THEREFORE, IN EVALUATING THE COMPANY AND ITS BUSINESS
PROSPECTS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS IN ADDITION TO THE OTHER INFORMATION SET FORTH ELSEWHERE IN THIS
PROSPECTUS BEFORE PURCHASING SHARES OF COMMON STOCK IN THIS OFFERING.
HISTORY OF LOSSES. The Company has incurred substantial losses over the
last few years and had an accumulated deficit of approximately $16.3 million at
June 30, 1995. There can be no assurance that the Company will ever become
profitable.
DEPENDENCE ON NEW PRODUCT DEVELOPMENT. The Company's results of
operations will depend, to a significant extent, upon its ability to
successfully commercialize generic pharmaceutical products. Products must be
developed and tested, meet strict regulatory standards, receive requisite
regulatory approvals and be manufactured on a cost-effective basis before
successful commercialization can be achieved. The development and
commercialization process is time consuming and costly. Delays in any part of
the process or the inability of the Company to obtain regulatory approval of its
products could materially adversely affect the Company's future results of
operations. The Company believes that it takes between twelve and thirty months
from the time that an ANDA is filed until its approval, although such time
period has been longer in the past and may be longer in the future. The Company
is dependent on the FDA approval process to introduce new products to the
market. There can be no assurance as to when and if the Company will have new
products to market, or that, if its products are approved, they can be
successfully commercialized.
GOVERNMENT REGULATION. All pharmaceutical manufacturers, including the
Company, are subject to extensive regulation by the FDA and other federal and
state agencies. The Company is subject to periodic inspection of its facilities
and operations and testing of its products by the FDA. The FDA has extensive
enforcement powers over pharmaceutical manufacturers, including the power to
withhold or deny approvals of new products, suspend or withdraw prior product
approvals, request the recall of existing products, seize products, delay or
prevent product sales, enjoin production or shipping, and criminally prosecute
companies and individuals for violations of laws and regulations. Current FDA
procedures may delay initial product shipments. Any manufacturer failing to
comply with FDA requirements may be unable to obtain approvals for the
introduction of new products. In recent years, the ANDA filing procedure has
become more rigorous, time consuming and costly. Further, the Company cannot
predict the extent to which it may be affected by legislative and regulatory
developments concerning its products, operations or the health care field
generally. Regulatory compliance issues or regulatory changes affecting the
Company's operations or the approval or shipment of products could have a
material adverse effect upon the Company's business. See "Business - Government
Regulation." Between July 1992 and December 1993, the Company was in the FDA's
Validity Assessment Program and, as a result, during this period the Company
could not file ANDAs and the FDA did not review ANDAs previously filed by the
Company. The Company was released from this program in December 1993 and since
then has received ANDA approvals for five additional products and a tentative
approval for a sixth product.
TENTATIVE APPROVAL OF CAPTOPRIL AND GENERAL AGREEMENT ON TARIFFS AND
TRADE ("GATT") TREATY. The Company has been granted a tentative approval by the
FDA of its ANDA for Captopril, the generic version of Capoten(Registered
trademark). In order to market Captopril, the Company must receive final
approval of its ANDA, which will not be granted until the expiration of patent
protection for Capoten(Registered trademark) and is subject to the Company
remaining in substantial compliance with current good manufacturing practices.
While the Company believes it will receive final
-9-
<PAGE>
approval of its ANDA when patent protection for Capoten(Registered
trademark) expires, there can be no assurance it will receive such approval.
For a discussion of the current status of the Company's ANDA for Captopril, see
"Prospectus Summary - Recent Developments." There can be no assurance as to when
the Company will be able to commence marketing this product.
PENDING SEC INVESTIGATION. In February 1993, the Securities and
Exchange Commission ("SEC") initiated a formal investigation into possible
violations of Federal securities laws by the Company and certain of its officers
and directors. The SEC investigation is focusing on the Company's public
disclosure during the period between July 1991 and April 1992 regarding the
status of the Company's ANDAs for Piroxicam and Minoxidil and on sales of
securities during this period by certain persons, including Company executive
officers and/or directors Patrick J. McEnany, Richard W. Gross, Rick A. Wilber,
Abul Bhuiyan and Nilkanth Patel. The Company believes that the SEC's
investigation is ongoing. No assurance can be given as to the outcome of the
SEC's investigation or that such outcome will not have a material adverse effect
upon the Company.
NECESSITY OF ADDITIONAL CAPITAL. The amount of capital required by the
Company at various times will depend, in part, on the timing of ANDA approvals
and, accordingly, the timing of the Company's new product introductions, as well
as the size of the market of each new product being launched. The Company may
require additional capital in the future to finance its research and
development, capital expenditues and working capital needs. Under its present
business plan, the Company anticipates that its available cash will meet its
capital requirements through March 31, 1996. While the Company believes that
additional financing will be available, there can be no assurance that such
financing will be secured. If the Company is unable to obtain such capital, it
will likely be forced to reduce the level of its research and development
efforts and to make other changes to its present business plan until such
funding can be secured, which may have a material adverse effect on the Company.
HEALTH CARE REFORM. There is significant political pressure to contain
health care costs at the federal and state levels. The Clinton administration
has previously proposed comprehensive legislation to reform the health care
system. In addition, members of Congress have submitted several alternative
plans for national health care reform. None of the proposals has been adopted.
Members of the Clinton administration and Congress have expressed an interest in
controlling the prices pharmaceutical companies charge for their products. It is
uncertain what reforms, if any, will ultimately be enacted by the federal
government or any state government. There can be no assurance that future
government or private cost control initiatives or other changes in the health
care market will not adversely affect the Company or its industry.
COMPETITION. The drug industry is highly competitive and the Company
experiences substantial competition in connection with the manufacture and sale
of its generic pharmaceuticals. The Company competes with generic drug
manufacturers, brand-name pharmaceutical companies that manufacture or market
generic drugs, the original manufacturers of brand-name drugs that continue to
produce such drugs after patent expirations or introduce generic versions of
their branded products, and manufacturers of new drugs that may compete with the
Company's generic drugs. Many competitors have a greater number of products on
the market and have greater financial and other resources, allowing them to
devote greater resources to research and development and marketing. Newly
introduced generic products with limited or no other generic competition are
typically sold at higher selling prices, often resulting in increased gross
profit margins. As competition from other manufacturers intensifies, selling
prices typically decline. As a result, the maintenance of profitable operations
will be dependent, in part, on the Company's ability to maintain efficient
production capabilities and to develop and introduce new products in a timely
manner.
-10-
<PAGE>
DEPENDENCE ON PRINCIPAL CUSTOMERS. During 1994 and 1993, two customers
accounted for approximately 24% and 27%, respectively, of the Company's net
sales. Further, during 1994 and 1993, the Company's ten largest customers
accounted for approximately 60% and 64%, respectively, of net sales. The loss of
any one of these customers may have an adverse effect on the Company's
operations.
DEPENDENCE ON LIMITED NUMBER OF PRODUCTS. At present, the Company
manufactures and markets 11 generic pharmaceutical products. During 1994, four
of the Company's products each accounted for more than 10 percent of the
Company's net sales (the largest of which accounted for approximately 22 percent
of the Company's net sales) and together accounted for approximately 69 percent
of the Company's net sales. Although the Company's strategy is to increase the
number of products offered, a significant loss of sales of any of these products
could have an adverse impact on the Company's results of operations. The Company
believes that as new products are developed and approved, the Company's largest
product and the Company's dependence thereon will vary from period to period.
DEPENDENCE ON SUPPLIERS. Sources for materials used in the Company's
products must be approved by the FDA, and only one source has been approved for
the active ingredient used in all but three of the Company's products. Any
interruption of materials from sole source suppliers or delays in FDA approval
of new suppliers could have a material adverse effect on the Company's business.
The Company intends to file supplements with the FDA for additional secondary
sources in the future. There can be no assurance as to when and if these
approvals will be received. The Company experienced raw material shortages
during 1993 with respect to its largest product and, while such shortages were
alleviated, there can be no assurance that they will not recur in the future.
PRODUCT LIABILITY INSURANCE. Production and sale of pharmaceutical
products involve an inherent risk of product liability claims and associated
adverse publicity. Insurance coverage is expensive, difficult to obtain and may
not be available in the future on acceptable terms or at all. Although the
Company currently maintains liability insurance for all of its products in the
amount of $3.0 million, there can be no assurance that coverage limits of the
Company's insurance policies will be adequate. A claim brought against the
Company, whether fully covered by insurance or not, could have a material
adverse effect upon the Company.
ATTRACTION AND RETENTION OF KEY PERSONNEL. The success of the Company's
present and future operations will depend, to a large extent, upon the continued
services of the Company's executive officers, including Patrick J. McEnany, its
Chairman and President. The loss of the services of certain of the executive
officers could have a material adverse effect on the Company. The Company's
success is also dependant upon its ability to attract and retain other highly
qualified scientific, managerial and manufacturing personnel. Competition for
such personnel is intense. The Company competes with numerous pharmaceutical and
health care companies, as well as with universities and nonprofit research
organizations for such personnel. There can be no assurance that the Company
will continue to be able to attract and retain qualified personnel.
VOLATILITY OF STOCK MARKET. The market prices for securities of
companies engaged primarily in the development, manufacture and marketing of
pharmaceuticals has historically been volatile. The market price of the Common
Stock has been volatile in the past and may be volatile in the future. Various
factors may influence the market price of the Common Stock including
fluctuations in the Company's operating results, the announcement of
technological innovations or new commercial products by the Company or its
competitors, governmental regulation, regulatory approvals, publicity regarding
the status of the Company's product development efforts, political developments
or proposed legislation in the health care industry, and other investment
considerations.
-11-
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE. Substantially all of the outstanding
Common Stock is available for sale in the public marketplace. There are also
outstanding stock options and warrants to purchase an aggregate of 3,064,458
shares of Common Stock at various exercise prices per share. The Company has an
effective registration statement on Form S-3 covering the public sale of, among
other items, 2,000,000 shares of Common Stock issued by the Company in a private
placement of the Common Stock completed during the third quarter of 1994. No
prediction can be made as to the effect, if any, that sales of shares of Common
Stock or the availability of such shares for sale will have on the market prices
prevailing from time to time. The possibility that substantial amounts of Common
Stock may be sold in the public market may adversely affect prevailing market
prices for the Common Stock, and could impair the Company's ability to raise
capital through the sale of its equity securities.
-12-
<PAGE>
MARKET INFORMATION
The Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "RLAB." The following are the high and low bid quotations for the
quarterly periods shown. Such prices represent quotes or prices between dealers
in securities and do not include retail markup, markdown, or commission and may
not necessarily represent actual transactions:
<TABLE>
<CAPTION>
1993 HIGH LOW
- ---- ---- ---
<S> <C> <C>
First Quarter $9.47 $5.63
Second Quarter 7.13 5.34
Third Quarter 7.03 5.25
Fourth Quarter 7.50 3.94
1994
- ----
First Quarter 8.00 6.13
Second Quarter 6.13 3.00
Third Quarter 4.75 2.75
Fourth Quarter 5.43 3.50
1995
- ----
First Quarter 8.81 4.50
Second Quarter 8.06 5.38
Third Quarter (through August 15, 1995) 7.94 6.25
</TABLE>
On September 28, 1995, the average of the bid and ask prices of the
Common Stock was $8.6875 per share. At September 28, 1995, there were
approximately 10,598 holders of record of the Common Stock.
DIVIDEND POLICY
The Company has never paid cash dividends on its Common Stock and has
no present plans to do so in the foreseeable future. The Company's current
policy is to retain all earnings, if any, for use in the operation of its
business. The payment of future cash dividends, if any, will be at the
discretion of the Board of Directors and will depend upon earnings, financial
requirements of the Company and such other factors as the Board of Directors may
deem relevant.
-13-
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock being offered by the Selling Shareholders. Any net
proceeds received by the Company upon the exercise of the Warrants or the
Placement Agent Warrant will be used for working capital. Pursuant to the terms
of the Sales Agency Agreement between the Company and Gruntal, the Company will
pay Gruntal 1.5% of the gross proceeds from the exercise of the Warrants.
The Company received net proceeds of approximately $4,576,000 from the
Private Placement, which is being used as follows: (i) approximately $1,300,000
for research and development; (ii) approximately $500,000 for capital
expenditures; and (iii) approximately $2,776,000 for working capital.
CAPITALIZATION
The following table sets forth the capitalization of the Company at
June 30, 1995, and as adjusted for the sale of 833,333 shares of the Common
Stock in the Private Placement and the application of the net proceeds
therefrom.
<TABLE>
<CAPTION>
JUNE 30, 1995
(IN THOUSANDS, EXCEPT SHARES)
-----------------------------
ACTUAL ADJUSTED
------ --------
<S> <C> <C>
Long Term Debt................................. $156 $156
Stockholders' Equity
Common Stock, $.005 par value
35,000,000 shares authorized,
issued and outstanding:
(i) actual, 11,975,146 shares; (ii) as
adjusted, 12,808,479 shares................. 60 64
Additional Paid in Capital................... 21,869 26,441
Accumulated Deficit.......................... (16,262) (16,262)
Less Treasury Stock, 2,500 shares, at cost... (11) (11)
------ ------
Total Stockholders' Equity..................... 5,656 10,232
------ ------
Total Capitalization........................... $ 5,812 $10,388
====== ======
</TABLE>
-14-
<PAGE>
DESCRIPTION OF THE WARRANTS
Each Warrant entitles the holder to purchase one share of Common Stock
at an exercise price of $6.50 per share. The following summary of certain
provisions of the Warrant is not complete and is qualified in its entirety by
reference to the form of Warrant, a copy of which is an exhibit to the
Registration Statement (of which this Prospectus forms a part). The holder of
each Warrant is entitled to certain registration rights.
The Warrants may be exercised at any time until July 21, 1996. After
the expiration date, warrant holders shall have no further rights. The Company
will not issue fractional shares of Common Stock. In lieu of fractional shares
of Common Stock, there will be paid to the holder of the Warrants at the time of
the exercise, and upon payment of the exercise price, an amount per share equal
to some fraction of the then current market price (as defined) of the shares of
Common Stock. The warrant holders do not have any voting and any other rights as
shareholders of the Company. The Warrants may not be redeemed by the Company.
The exercise price and the number of shares of Common Stock purchasable
upon the exercise of each Warrant are subject to increase or decrease upon the
happening of certain corporate events. These events are (i) the issuance of a
stock dividend or stock distribution to holders of the Common Stock or a
combination, subdivision or reclassification of the Common Stock; or (ii) the
issuance to all holders of the outstanding Common Stock, without charge to such
holders, of rights or warrants (expiring within forty-five (45) days after the
record date) for determining shareholders entitled to receive them to subscribe
for or purchase Common Stock, or evidence of indebtedness or assets (excluding
cash dividends or distributions payable out of consolidated earnings), or earned
surplus or dividends payable in shares of Common Stock or rights or warrants. No
adjustment in the exercise price will be required unless cumulative adjustments
require an adjustment of at least $.05.
Notwithstanding the foregoing, in case of any consolidation, merger or
sale of all or substantially all of the property of the Company, the holder of
each Warrant shall have the right, upon the subsequent exercise thereof, only to
receive the kind and amount of shares and other securities and property
(including cash) which such holder would have been entitled to receive by virtue
of such transaction had the warrants been exercised immediately prior to such
transaction.
DESCRIPTION OF SECURITIES REGISTERED
The following description of the capital stock of the Company is
subject to the Florida Business Corporation Act and the Company's Articles of
Incorporation (the "Articles") and Bylaws. Copies of the Articles and Bylaws are
exhibits to the Registration Statement (of which this Prospectus forms a part).
The authorized capital stock of the Company consists of 200,000 shares
of preferred stock, $.005 par value (the "Preferred Stock"), none of which is
issued and outstanding, and 35,000,000 shares of Common Stock, $.005 par value.
The holders of capital stock of the Company have no preemptive or other
subscription rights.
COMMON STOCK
Each outstanding share of Common Stock is fully paid and nonassessable.
Holders of outstanding shares of Common Stock are entitled to receive dividends
out of assets legally available therefor at such times and in such amounts
as the Board of Directors may from time to time determine. Upon the liquidation,
dissolution, or winding up of the Company, the assets legally available for
distribution to the shareholders will be distributable ratably among the holders
-15-
<PAGE>
of the Common Stock outstanding at the time, subject to the liquidation
preferences, if any, on any outstanding shares of Preferred Stock.
Holders of the shares of Common Stock have no conversion, subscription
or preemptive rights, and the shares are not subject to redemption. The rights
of the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any series of preferred stock that may be
issued in the future, including voting, dividend, and liquidation rights.
Each stockholder is entitled to one vote for each share of Common Stock
held by such stockholder. The holders of shares do not possess cumulative voting
rights. Therefore, the holders of more than fifty percent of the outstanding
shares voting for the election of directors could elect all of the directors who
are standing for election at such time, and, in such event, the holders of the
remaining shares would be unable to elect any of the Company's directors.
THE PRIVATE PLACEMENT
On July 21, 1995, the Company completed the Private Placement. In the
Private Placement, the Company sold 833,333 units of its securities at a
purchase price of $6.00 per unit. Each unit is comprised of one share of Common
Stock and a twelve-month warrant to purchase one share of Common Stock at an
exercise price of $6.50 per share. The Company received aggregate net proceeds
in the offering of approximately $4,576,000. Gruntal acted as the placement
agent of the Private Placement. In connection with the Private Placement,
Gruntal received a commission of seven percent of the gross proceeds of the
Private Placement and the Company paid accountable expenses of $70,000 to
Gruntal. Gruntal also received the Placement Agent Warrant. See "Placement Agent
Warrant" below. The proceeds of the Private Placement are being used for
research and development, capital expenditures and for working capital. See
"Management's Discussion of Financial Condition and Results of Operations -
Liquidity and Capital Resources."
The 833,333 units were sold in a transaction exempt from registration
under the Act by virtue of the exemption contained in Section 4(2) of the Act
and Regulation D of the rules and regulations thereunder.
This Registration Statement (of which this Prospectus forms a part)
registers for sale the 833,333 shares of Common Stock and the 833,333 shares of
Common Stock underlying the Warrants sold in the Private Placement.
Additionally, this Registration Statement registers for sale the 83,333 shares
of Common Stock underlying the Placement Agent Warrant. If this Registration
Statement has not been declared effective by October 21, 1995, the Company will
be obligated to issue to the investors in the Private Placement five-year
warrants to purchase 41,667 shares of the Common Stock at an exercise price of
$6.50 per share (and to register those shares in this Registration Statement).
PLACEMENT AGENT WARRANT
On July 21, 1995, at the closing of the Private Placement, the Company
issued to Gruntal as part of its compensation for its services, a warrant to
purchase 83,333 shares of Common Stock at an exercise price equal to $6.00 per
share exercisable until July 21, 1998 (the "Placement Agent Warrant"). The
holder of the Placement Agent Warrant may pay the exercise price in cash.
Alternately, the holder of the Placement Agent Warrant has the right at any time
and from time to time to exercise the Placement Agent Warrant in whole or in
part by surrendering the Placement Agent Warrant Certificate in exchange for the
number of shares of Common Stock equal to (x) the number of shares as to which
the Placement Agent Warrants are being exercised multiplied by (y) a fraction,
the numerator of which is the Market Price (as defined in the Placement Agent
Warrant) of the Common Stock at the date of exercise less the Exercise Price and
the denominator of which is such Market Price.
-16-
<PAGE>
The exercise price and the number and kind of securities purchasable
upon exercise is subject to adjustment upon the declaration of certain dividends
and certain reclassifications, subdivisions and combinations of the Common
Stock, certain issuances of Common Stock and rights to acquire Common Stock, and
consolidations and mergers of the Company and sales or other transfers of all or
substantially all of the Company's property. The shares of Common Stock issuable
upon the exercise of the Placement Agent Warrants are being registered in the
Registration Statement (of which this Prospectus forms a part).
REGISTRATION RIGHTS
The Company is required to use its best efforts to maintain the
effectiveness of the Registration Statement (of which this Prospectus forms a
part) until July 21, 1997.
At any time after April 21, 1996, if the Holders of more than a
majority of the shares of Common Stock constituting the Shares, the shares of
Common Stock underlying the Warrants and the shares of Common Stock underlying
the Placement Agent Warrant, voting as a single class, select one or more
underwriters for an offering of the Registered Securities, the Company shall
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the underwriters of such offering and make such
representations and warranties with respect to the Registration Statement or
post-effective amendment thereto, prospectus or amendment or supplement thereto,
and documents incorporated by reference, if any, to the Holders and the
underwriters, if any, of the Registered Securities in form, substance and scope
as are customarily made by registrants in secondary offerings of common stock in
transactions of that type. The Holders shall also enter into and perform their
customary obligations under any such agreement, including without limitation,
customary indemnification and contribution obligations.
DAVIS OPTIONS
In October 1993, the Company and Davis settled a lawsuit pursuant to
which the Company issued 6,882 shares of Common Stock and a three-year option to
purchase 6,666 shares of Common Stock at an exercise price of $5.8125 per share.
CLASS ACTION SETTLEMENT WARRANTS
During April and May 1992, shortly after the Company announced the
receipt of a letter from the FDA regarding the non-approval of the Company's
ANDA for Piroxicam, several lawsuits were filed by shareholders of the Company
against the Company, certain of its officers and directors and two of the
underwriters who participated in the Company's January 1992 public offering
(collectively the "Defendants"). These cases were consolidated into one federal
securities class action lawsuit, captioned IN RE: ROYCE LABORATORIES, INC.
SECURITIES LITIGATION, U.S. District Court, Southern District of Florida. The
complaint was subsequently amended (the "Amended Complaint") and purported to
bring a securities class action against the Defendants on behalf of purchasers
of the Common Stock between September 11, 1991 (when the Company announced it
had received tentative approval of its ANDAs for Piroxicam) and July 8, 1992
(when the Company was placed in the FDA's Validity Assessment Program). The
Amended Complaint alleged, among other things, that the Defendants
misrepresented the Company's prospects for obtaining final approval from the FDA
to manufacture and market Piroxicam.
In September 1993, the Court approved an agreement settling the class
action litigation without the Company admitting or denying any liability.
Pursuant to the settlement agreement, the Company paid $850,000, which was
funded by the Company's directors' and officers' liability insurance, and agreed
to issue to the members of the class 250,000
-17-
<PAGE>
shares of Common Stock and warrants to purchase 658,333 shares of Common Stock
at an exercise price of $15.00 per share (the "Series F Warrants"). The shares
of Common Stock and the Series F Warrants were distributed during the first
quarter of 1995. The Series F Warrants are exercisable for five years from the
date of their issuance, unless such period is extended by the Company. After the
expiration date, Series F Warrantholders have no further rights.
The Series F Warrants may be called at the sole option of the Company,
upon thirty days prior written notice to the registered holders thereof, so long
as the Common Stock trades above $18.00 per share for 20 consecutive trading
days ending not more than 10 days prior to the date that the notice of
redemption is given. Any such redemption shall be for all outstanding Series F
Warrants. If the Company elects to redeem the Series F Warrants, then the
Warrantholders shall have the right to exercise their options until the
redemption date, and thereafter, the holders shall only be entitled to receive
the redemption price therefor. Notice of redemption will be mailed to all Series
F Warrantholders of record at least 30 days but not more than 60 days before the
redemption date.
The exercise price or the number of shares of Common Stock purchasable
upon the exercise of each warrant are subject to increase or decrease upon the
happening of certain corporate events for the purpose of preserving the value of
the exercise privilege of the warrants. These events include (i) the issuance of
a stock dividend or stock distribution to holders of Common Stock or
combination, subdivision or reclassification of Common Stock; or (ii) the
issuance to all holders of the outstanding Common Stock, without charge to such
holders, of rights or warrants (expiring within forty-five (45) days after the
record date) for determining shareholders entitled to receive them to subscribe
for or purchase Common Stock, or evidence of indebtedness or assets (excluding
cash dividends or distributions payable out of consolidated earnings), or earned
surplus or dividends payable in shares of Common Stock or rights or warrants. No
adjustment in the exercise price will be required unless cumulative adjustments
require an adjustment of at least $.001.
Notwithstanding the foregoing, in case of any consolidation, merger or
sale of all or substantially all of the property of the Company, the holder of
each warrant shall have the right, upon the subsequent exercise thereof, only to
receive the kind and amount of shares and other securities and property
(including cash) which such holder would have been entitled to receive by virtue
of such transaction had the warrants been exercised immediately prior to such
transaction.
TRANSFER AGENT
The transfer agent for the Common Stock and the Warrant Agent for the
Company's Series F Warrants is The Trust Company of New Jersey, 35 Journal
Square, Jersey City, New Jersey 07306.
-18-
<PAGE>
SELLING SHAREHOLDERS
The following table lists the number of shares of Common Stock being
registered in the Registration Statement (of which this Prospectus forms a part)
on behalf of each of the Selling Shareholders listed below and the approximate
percentage of the shares of Common Stock outstanding (assuming (i) that no
outstanding options or warrants (except the Warrants and the Placement Agent
Warrant) has been exercised). None of the Selling Shareholders other than Robert
E. Band, Steven Miller, Gregory Reed, Rick A. Wilber, Charles J. Simons and
Henry S. Keel, Jr. (who are executive officers and/or directors of the Company)
has had a material relationship with the Company or any of its affiliates within
the past three years. Other than with respect to the Selling Shareholders who
are executive officers, directors or beneficial owners of more than 5% of any
class of the voting securities of the Company, the Company is not aware of the
ownership of its securities by any of the Selling Shareholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- ---- --------------------- -------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Robert M. Adams 40,000 * 40,000 - -
C. Clarke Ambrose Trust, 20,000 * 20,000 - -
dated April 17, 1992
C. Clark Ambrose 333,334 2.6 333,334 - -
Joan J. Ambrose 20,000 * 20,000 - -
Stephens Ambrose 20,000 * 20,000 - -
Avalon Group, Ltd. Defined
Benefit Trust 5,000 * 5,000 - -
Perry H. Bacon 45,000 * 45,000 - -
John S. Bai 400 * 400 - -
Marcia Band(1) 5,000 * 5,000 - -
Robert E. Band(1) 18,333 * 5,000 13,333 *
Edward Bao & Marta
Bao, JTWROS 10,000 * 10,000 - -
Elaine M. Berson 2,000 * 2,000 - -
Marc M. Berson 4,000 * 4,000 - -
Richard Binder 16,666 * 16,666 - -
Peter Bisson & Fay Lambros
Bisson, JTWROS 10,000 * 10,000 - -
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- ---- --------------------- -------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Allen L. Boorstein 10,000 * 10,000 - -
Ronald A. Cass 2,000 * 2,000 - -
Chinook Equities 20,000 * 20,000 - -
Coastal Surgical Assn. PA
Profit Sharing Trust 24,000 * 24,000 - -
Lorelei Cole 8,332 * 8,332 - -
Loren Comitor 2,000 * 2,000 - -
Commercial Reserve Corp. 10,000 * 10,000 - -
Sheldon Davis Associates, Inc.(2) 13,548 * 13,548 - -
Drobny/Fischer 56,666 * 56,666 - -
Elegant Solutions for
Business, Inc. 8,334 * 8,334 - -
Nan Mar Elia 20,000 * 20,000 - -
Robert M. Fomon 8,000 * 8,000 - -
James C. Gale, Trustee for
Ariana J. Gale 30,000 * 30,000 - -
Michael Gironta 12,000 * 12,000 - -
Gerald L. Gitner 5,000 * 5,000 - -
John D. Goldberg 8,334 * 8,334 - -
Sharon D. Gonsky D/B/A
SDG Associates 20,000 * 20,000 - -
Richard E. Goulding 8,334 * 8,334 - -
Charles L. Greenberg &
Donna Greenberg, JTWROS 20,000 * 20,000 - -
Gruntal & Co., Incorporated(3) 83,333 * 83,333 - -
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- ---- --------------------- -------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Lionel Gary Hest & Amy
Hest, JTWROS 12,000 * 12,000 - -
C. Bradford Jeffries 14,000 * 14,000 - -
Henry Keel(1) 97,914 * 20,000 77,914 *
Daniel Kleinberg & Elaine
Kleinberg, JTWROS 4,000 * 4,000 - -
Frank Bowman Krimmel II 20,000 * 20,000 - -
John Latshaw Trust 30,000 * 30,000 - -
Laurinberg Radiology PA
Profit Sharing Plan 80,000 * 80,000 - -
Steven J. Levinson 14,000 * 14,000 - -
Arthur Liss 8,332 * 8,332 - -
William J. McCluskey 3,000 * 3,000 - -
Bill F. McConnell 8,334 * 8,334 - -
McEnany Roofing, Inc. 5,000 * 5,000 - -
Michael Miller 10,000 * 10,000 - -
Steven R. Miller and
Roxanne G. Miller,
JTWROS(1) 30,700 * 10,000 20,700 *
Richard Moccia 10,000 * 10,000 - -
Ronda Morganstein 4,000 * 4,000 - -
Sy Nagorsky 3,334 * 3,334 - -
Bernabe Palomares MD IRA 80,000 * 80,000 - -
Prins Family Limited
Partnership 18,000 * 18,000 - -
Proper Service Retirement
Plan 8,332 * 8,332 - -
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- ---- --------------------- -------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Robert Pumphrey, Jr. Profit
Sharing Plan 80,000 * 80,000 - -
Gregory Reed and Joan
Reed, JTWROS(1) 67,837 * 6,666 61,171 -
Barry Richter 10,000 * 10,000 - -
Robinson-Sommer-Brand,
MDs, P.A. Profit
Sharing Plan F/B/O
David A. Sommer 5,000 * 5,000 - -
Gregg Rosenberg 15,000 * 15,000 - -
Stacey Rosenberg 15,000 * 15,000 - -
Martin E. Rosenfeld and
Neil Rosenfeld, JTWROS 10,000 * 10,000 - -
Joseph A. Rosin 8,334 * 8,334 - -
Joseph A. Russo 1,600 * 1,600 - -
Robert Sablowsky 10,000 * 10,000 - -
David Saks & Caroll
Saks, JTWROS 10,000 * 10,000 - -
Stewart A. Shiman 50,000 * 50,000 - -
Howard Silverman and
Phyllis Silverman,
JTWROS 15,000 * 15,000 - -
Charles J. Simons Revocable
Trust(1) 41,998 * 12,000 29,998 *
Howard "Buzz" Simons, Arie
Simons and Corey Simons,
JTWROS 16,666 * 16,666 - -
George Skakel 20,000 * 20,000 - -
David B. Smith 6,668 * 6,668 - -
</TABLE>
-22-
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
NAME OWNED BEFORE OFFERING SHARES OFFERED OWNED AFTER OFFERING
- ---- --------------------- -------------- --------------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Southern Medical Associates PA
Balanced Profit Sharing Plan 23,000 * 23,000 - -
Superpharm Corporation 20,000 * 20,000 - -
James Thomas, Sr. MD IRA 82,000 * 82,000 - -
Joan Wainberg 2,000 * 2,000 - -
Stuart Wainberg 7,000 * 7,000 - -
Jack Weinstein 30,000 * 30,000 - -
Robert Weinstein 6,000 * 6,000 - -
Rick A. Wilber(1) 211,497 1.7 10,000 201,497 1.6
Linda Zankl(1) 13,000 * 13,000 - -
Seymour Zwickler,
IRA 10,000 * 10,000 - -
------
1,763,547(4)
=========
<FN>
- ----------------------
* Less than 1%
(1) Messrs. Keel, Reed, Simons and Wilber are directors of the Company. Ms.
Zankl is the wife of Patrick J. McEnany, the Chairman and Chief Executive
Officer of the Company (Mr. McEnany disclaims beneficial ownership over the
shares of Common Stock owned by his wife). Ms. Band is the mother of Robert
E. Band, Vice President-Finance and Chief Financial Officer of the Company
(Mr. Band disclaims beneficial ownership over the shares of Common Stock
owned by his mother). Mr. Miller is an executive officer of the Company.
(2) Composed of the Davis Shares and the Davis Options. For a description of
the Davis Options, see "Description of Securities Registered - Davis
Options."
(3) For a description of the Placement Agent Warrant, see "Description of
Securities Registered - Placement Agent Warrant."
(4) Includes the Shares, the Davis Shares, the shares of Common Stock
underlying the Warrants, the shares of Common Stock underlying the
Placement Agent Warrant and the shares of Common Stock underlying the
Davis Options.
</FN>
</TABLE>
-23-
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock by the Selling
Shareholders may be effected from time to time in one or more transactions
(which may involve block transactions) in the over-the-counter market or on
NASDAQ (or any exchange on which the Common Stock may then be listed) in
negotiated transactions, through the writing of options (whether such options
are listed on an options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealer may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Shareholders
and/or purchasers of shares for whom they may act as agent. The Selling
Shareholders may also sell such shares pursuant to Rule 144 promulgated under
the Act, or may pledge shares as collateral for margin accounts and such shares
could be resold pursuant to the terms of such accounts. The Selling Shareholders
and any broker-dealers that act in connection with the sale of the Common Stock
might be deemed to be "underwriters" within the meaning of Section 2(11) of the
Act and any commission received by them and any profit on the resale of the
shares of Common Stock as principal might be deemed to be underwriting discounts
and commissions under the Act. The Selling Shareholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the Common Stock against certain liabilities, including liabilities
arising under the Act.
Because the Selling Shareholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Act, the Selling Shareholders will be
subject to prospectus delivery requirements under the Act. Furthermore, in the
event of a "distribution" of the shares, such Selling Shareholders, any selling
broker or dealer and any "affiliated purchasers" may be subject to Rule 10b-6
under the Exchange Act, which Rule would prohibit, with certain exceptions, any
such person from bidding for or purchasing any security which is the subject of
such distribution until his participation in that distribution is completed. In
addition, Rule 10b-7 under the Exchange Act prohibits any "stabilizing bid" or
"stabilizing purchase" for the purpose of pegging, fixing or stabilizing the
price of Common Stock in connection with this offering.
In order to comply with certain state securities laws, if applicable,
the Common Stock will not be sold in a particular state unless such securities
have been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Shareholders. The proceeds, if any, from
the exercise of the Warrants and the Placement Agent Warrant will be received by
the Company; no brokerage commissions or discounts will be paid in connection
therewith.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended December 31, 1994, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent certified public accountants, given on the authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
Broad and Cassel, Miami, Florida, has acted as counsel to the Company
in connection with the Registration Statement and has rendered an opinion as to
the validity of the shares of Common Stock offered hereby.
-24-
<PAGE>
================================================================================
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY THE
COMPANY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. 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
ANY OF THE DATES AS OF WHICH INFORMATION IS FURNISHED OR SINCE THE DATE OF THIS
PROSPECTUS.
----------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
Available Information.................................................... 3
Incorporation of Certain Documents by Reference.......................... 3
Prospectus Summary....................................................... 4
Risk Factors............................................................. 9
Market Information.......................................................13
Dividend Policy..........................................................13
Use of Proceeds..........................................................14
Capitalization...........................................................14
Description of the Warrants..............................................15
Description of Securities Registered.....................................15
Selling Shareholders.....................................................19
Plan of Distribution.....................................................24
Experts..................................................................24
Legal Matters............................................................24
1,763,547 SHARES
ROYCE LABORATORIES, INC.
Common Stock
(PAR VALUE $.005 PER SHARE)
-------------
PROSPECTUS
-------------
October __, 1995
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses to be incurred in
connection with the Offering:
<TABLE>
<CAPTION>
AMOUNT*
-------
<S> <C>
SEC Registration Fee..................................... $4,230.99
Printing and Engraving .................................. 1,000.00
Legal Fees and Expenses.................................. 20,000.00
Accounting Fees and Expenses............................. 5,000.00
Blue Sky Fees and Expenses............................... 10,000.00
Miscellaneous............................................ 1,000.00
--------
Total.................................................. $41,230.99
=========
<FN>
- --------------------
* Estimated, except SEC Registration Fee.
</FN>
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 607.0831 of the Florida Business Corporations Act,
directors and officers of the Company are indemnified against liability under
certain circumstances. Reference is made to Article XI of the Company's Articles
of Incorporation, as amended, and to "Description of Securities."
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
3.1 Articles of Incorporation, as amended (incorporated by reference
from Exhibit 3.1 to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992 (the "Form 10-K").
3.2 Certificate of Merger between Auntel Capital, Inc. and Auntel
Acquisition Corp. (incorporated by reference from Exhibit 3.2 to
the Form 10-K).
3.3 Restated and Amended By-laws (incorporated by reference from the
Forms 10-K for the fiscal years ended December 31, 1987 and
1989, respectively).
3.4 Articles of Amendment to Articles of Incorporation (incorporated
by reference from the Form 10-Q for the quarter ended June 30,
1995).
4.1 Specimen Certificate of Common Stock (incorporated by reference
from Exhibit 4.1 to the Form 10-K).
II-2
<PAGE>
ROYCE LABORATORIES, INC.
4.2 Specimen Warrant Certificate for the Series F Warrants
(incorporated by reference from Exhibit 4.2 to the Company's
Registration Statement on Form S-1, SEC file no. 33-72276).
4.3 Form of Warrant Agreement for the Series F Warrants
(incorporated by reference from Exhibit 4.3 to the Company's
Registration Statement on Form S-2, SEC file no. 33-72276).
4.4 Form of Warrant issued in the Private Placement*.
5.1 Opinion of Broad and Cassel*
10.1 Lease Agreement (incorporated by reference from Exhibit 10.1 to
the Form 10-K).
10.2 Royce Laboratories, Inc. Nonqualified Stock Option Plan, as
amended through December 23, 1987 (incorporated by reference to
Exhibit 10.2 to Registrant's Form 10-K for the fiscal year ended
December 31, 1989).
10.3 Employment Agreement between Abul K. Bhuiyan and Registrant
(incorporated by reference from Exhibit 10.3 to the Company's
Registration Statement on Form S-2, SEC file no. 33-72276).
10.4 Stock Option Agreement between Registrant and Goldline
Laboratories, Inc. (incorporated by reference from Exhibit 10.5
to the Form 10-K.)
10.5 Form of License Agreement between Registrant and Royce Research
and Development Limited Partnership I (incorporated by reference
from Exhibit 10.6 to the Form 10-K).
10.6 Form of Partnership Agreement of Royce Research and Development
Limited Partnership I (incorporated by reference from Exhibit
10.7 to the Form 10-K).
10.7 Employment Agreement between Patrick J. McEnany and Registrant
dated as of January 1, 1994 (incorporated by reference from
Exhibit 10.8 to the Form 10-K).
10.9 1992 Stock Option Agreement (incorporated by reference from
Exhibit 10.9 to the Company's Registration Statement on Form
S-2, SEC file no. 33-72276).
10.10 1995 Stock Option Agreement (incorporated by reference from the
Company's 1995 Proxy Statement, dated June 7, 1995).
10.11 Employment Agreement between Loren Gelber and Registrant
(incorporated by reference from Exhibit 10.10 to the Company's
Registration Statement on Form S-3, SEC File No. 33-84620).
10.12 Form of Subscription Agreement used in the Private Placement.*
10.13 Placement Agent Warrant issued to Gruntal & Co., Incorporated in
connection with the Private Placement.*
II-3
<PAGE>
ROYCE LABORATORIES, INC.
10.14 Form of Sales Agency Agreement between the Company and Gruntal &
Co., Incorporated.*
21.1 List of Subsidiaries of Registrant (incorporated by reference
from Exhibit 22.1 to the Form 10-K).
23.1 Consent of Broad and Cassel (included as part of Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP, independent certified public
accountants.**
- --------------------
* Previously filed.
** Filed herewith.
II-4
<PAGE>
ROYCE LABORATORIES, INC.
(b) Financial Statement Schedules (incorporated by reference to Item 14 of
the Form 10-K.) (Item 14(a)(2) of the Company's Report on Form 10-K of
the fiscal year ended December 31, 1994):
27.1 Schedule VIII - Valuation and Qualifying Accounts and Reserves
ITEM 17. UNDERTAKING.
(A) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
additional or changed material information with respect to the plan of
distribution.
(2) For the purposes of determining any liability under the Securities Act
of 1933, as amended, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, 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.
(5) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plans' annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
ROYCE LABORATORIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Royce
Laboratories, Inc. hereby certifies that it has reasonable grounds to believe
that it meets all of the requirements of Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement on Form S-3 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Miami, Florida on
the 10th day of October, 1995.
ROYCE LABORATORIES, INC.
By: /s/ PATRICK J. McENANY
------------------------------------------
Patrick J. McEnany, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ PATRICK J. McENANY Chairman of the Board, President, October 10, 1995
- ---------------------- Chief Executive and Operations
Patrick J. McEnany Officer
Secretary-Treasurer and October , 1995
- ---------------------- Director
Richard W. Gross
/s/ HENRY S. KEEL, JR.* Director October 10, 1995
- ----------------------
Henry S. Keel, Jr.
/s/ GREGORY REED* Director October 10, 1995
- ----------------------
Gregory Reed
/s/ RICK A. WILBER* Director October 10, 1995
- ----------------------
Rick A. Wilber
/s/ HUBERT E. HUCKEL* Director October 10, 1995
- ----------------------
Hubert E. Huckel
II-6
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ OGDEN R. REID* Director October 10, 1995
- ----------------------
Ogden R. Reid
/s/ DAVID COHEN* Director October 10, 1995
- ----------------------
David Cohen
/s/ CHARLES J. SIMONS* Director October 10, 1995
- ----------------------
Charles J. Simons
/s/ ROBERT E. BAND* Vice President - Finance and October 10, 1995
- ---------------------- Chief Financial Officer
Robert E. Band
____________________________
* Executed by Patrick J. McEnany, pursuant to Power of Attorney, dated August
16, 1995.
II-7
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our
report dated March 28, 1995, which appears on page F-2 of Royce
Laboratories, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1994. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ Price Waterhouse LLP
-------------------------
PRICE WATERHOUSE LLP
Miami, Florida
October 10, 1995
