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Filed pursuant to Rule 424(b)(3)
S.E.C. File Number 333-41037
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 25, 1997)
FUISZ TECHNOLOGIES LTD.
$75,000,000 PRINCIPAL AMOUNT OF
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
AND
5,660,250 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
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This document supplements the Prospectus dated November 25, 1997, which
is a part of the Registration Statement filed with the Securities and Exchange
Commission on November 25, 1997, relating to (i) $75,000,000 aggregate
principal amount of 7% Convertible Subordinated Debentures due 2004 (the
"Debentures") of Fuisz Technologies Ltd., a Delaware corporation (the
"Company"), and (ii) 5,660,250 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), which are initially issuable upon
conversion of the Debentures, plus such additional indeterminate number of
shares of Common Stock as may become issuable upon conversion of the Debentures
as a result of adjustments to the conversion price (the "Conversion Shares").
The Debentures and the Conversion Shares that are being registered hereby are
to be offered for the account of the holders hereof (the "Selling
Securityholders"). This Prospectus Supplement is incorporated by reference into
the Prospectus and should be read in conjunction with the Prospectus. All
terms used herein shall have the meaning assigned to them in the Prospectus.
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SEE "RISK FACTORS" BEGINNING ON PAGE 8 OF THE ACCOMPANYING PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE DEBENTURES AND THE COMMON STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus Supplement is March 4, 1998
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The following information supplements and updates the information
found on pages 47-50 of the Prospectus under the caption "Selling
Securityholders" by amending and restating such information to read, in its
entirety, as follows:
SELLING SECURITYHOLDERS
The Debentures were originally issued by the Company in a private
placement on October 17, 1997 to Smith Barney Inc., Credit Suisse First Boston
Corporation and Lehman Brothers Inc. (the "Initial Purchasers") and were
simultaneously sold by the Initial Purchasers, in transactions exempt from the
registration requirements of the Securities Act, to persons reasonably believed
by such Initial Purchasers to be "qualified institutional buyers" (as defined
in Rule 144A under the Securities Act) and outside the United States in
offshore transactions in reliance on Regulation S under the Securities Act.
The Selling Securityholders may from time to time offer and sell pursuant to
this Prospectus any or all of the Debentures and Conversion Shares. The term
"Selling Securityholder" includes the holders listed below and the beneficial
owners of the Debentures and their transferees, pledgees, donees or other
successors.
The following table sets forth information with respect to the Selling
Securityholders and the respective principal amount of Debentures beneficially
owned by each Selling Securityholder that may be offered pursuant to this
Prospectus. Except as otherwise indicated, to the knowledge of the Company,
all persons listed below have sole voting and investment power with respect to
their securities. Such information has been obtained from the Selling
Securityholders and the Trustee.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PERCENT OF TOTAL NUMBER OF SHARES
OF DEBENTURES OUTSTANDING OF COMMON STOCK
SELLING SECURITYHOLDERS OWNED DEBENTURES THAT MAY BE SOLD+
----------------------- ----- ---------- -----------------
<S> <C> <C> <C>
Allstate Insurance Company $1,500,000 2.00% 113,205
Argent Classic Convertible $1,500,000 2.00% 113,205
Arbitrage Fund, L.P.
Argent Classic Convertible $1,000,000 1.33% 75,470
Arbitrage Fund, L.P. Bermuda
Arkansas PERS $1,200,000 1.60% 90,564
Associated Electric & Gas $250,000 * 18,867
Insurance Services Ltd.
Bear Stearns & Co., Inc. $937,000 1.25% 70,715
Bond Fund Series--Oppenheimer $4,000,000 5.33% 301,880
Bond Fund for Growth
Catholic Mutual Relief Society $300,000 * 22,641
of America
Commonwealth Life $1,000,000 1.33% 75,470
Insurance--Stock TRAC
(TEAMSTERS I)
Declaration of Trust for the $680,000 * 51,319
Defined Benefit Plan of ICI
American Holdings Inc. (1)
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PERCENT OF TOTAL NUMBER OF SHARES
OF DEBENTURES OUTSTANDING OF COMMON STOCK
SELLING SECURITYHOLDERS OWNED DEBENTURES THAT MAY BE SOLD+
----------------------- ----- ---------- -----------------
<S> <C> <C> <C>
Declaration of Trust for the $470,000 * 35,470
Defined Benefit Plan of ZENECA
Holdings Inc. (2)
Delaware PERS $1,075,000 1.43% 81,130
Delaware State Employees $2,230,000 2.97% 168,298
Retirement Fund (3)
Donaldson, Lufkin & Jenrette $1,225,000 1.63% 92,450
Sec. Corp.
1st Source Bank $800,000 * 60,376
Forest Fulcrum Fund L.P. $600,000 * 45,282
Forest Global Convert Fund Ser $550,000 * 41,508
A-5
Forest Global Convert Fund Ser $50,000 * 3,773
B-2
Forest Global Convert Fund Ser $25,000 * 1,886
B-3
Forest Global Covert Fund Ser $75,000 * 5,660
B-5
Fox Family Foundation $50,000 * 3,773
Fox Family Portfolio $125,000 * 9,433
Partnership
General Motors Employees $7,850,000 10.5% 592,439
Domestic Group Trust (4)
HBK Finance L.P. (5) $2,109,000 2.81% 159,166
HBK Securities Ltd (6) $2,341,000 3.12% 176,675
Hillside Capital Incorporated $200,000 * 15,094
Corporate Account (7)
Highbridge Capital Corporation $2,000,000 2.67% 150,940
(8)
ICI American Holdings Trust $450,000 * 33,961
HSBC Securities $1,200,000 1.60% 90,564
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PERCENT OF TOTAL NUMBER OF SHARES
OF DEBENTURES OUTSTANDING OF COMMON STOCK
SELLING SECURITYHOLDERS OWNED DEBENTURES THAT MAY BE SOLD+
----------------------- ----- ---------- -----------------
<S> <C> <C> <C>
JMG Convertible Investment $250,000 * 18,867
Lincoln National Convertible $2,270,000 3.01% 171,316
Securities Fund
LLT Limited (9) $25,000 * 1,886
Lincoln National Life Insurance $2,695,000 3.59% 203,391
Maril & Co. $500,000 * 37,735
NALCO Chemical Retirement Trust $200,000 * 15,094
NatWest Securities Limited $5,100,000 6.80% 384,897
New York Life Separate A/C #7 $1,000,000 1.33% 75,470
(10)
Offshore Strategies LTD $500,000 * 37,735
Paloma Securities L.L.C. $600,000 * 45,282
Public Employees' Retirement $750,000 1.00% 56,602
Association of Colorado
Silverton International Fund $400,000 * 30,118
Limited
Smith Barney Inc. (11) $5,509,000 7.35% 415,764
Southport Partners $250,000 * 18,867
International LTD
Starvest Discretionary $300,000 * 22,641
State of Oregon Equity $4,625,000 6.17% 349,048
Summer Hill Global Partners, $50,000 * 3,773
L.P. (12)
Tennessee Consolidated $2,000,000 2.67% 150,940
Retirement System
The Brown & Williamson $300,000 * 22,641
Retirement Trust (13)
The J.W. McConnell Family $420,000 * 31,697
Foundation (14)
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PERCENT OF TOTAL NUMBER OF SHARES
OF DEBENTURES OUTSTANDING OF COMMON STOCK
SELLING SECURITYHOLDERS OWNED DEBENTURES THAT MAY BE SOLD+
----------------------- ----- ---------- -----------------
<S> <C> <C> <C>
The MainStay Funds on behalf of $1,200,000 1.60% 90,564
its Convertible Fund series
(15)
Thebes Ltd. (16) $500,000 * 37,735
Thermo Electron Balanced $600,000 * 45,282
Investment Fund (17)
United National Insurance $105,000 * 7,924
Company
Van Kampen American Capital $640,000 * 48,300
Convertible Securities Fund
(18)
Van Kampen American Capital $3,360,000 4.48% 253,579
Harbor Fund (18)
Walker Art Center $260,000 * 19,622
Weirton Trust $670,000 * 50,564
Zazove Convertible Fund, L.P. $600,000 * 45,282
ZENECA Holdings Pension Trust $450,000 * 33,961
Any other Selling $3,079,000 4.11% 232,372
Securityholders or future
transferees from such Selling
Securityholders (19)
$75,000,000 5,660,163++
=========== ===========
</TABLE>
* Less than one percent.
+ Assumes a conversion price of $13.25 per share (equivalent to a
conversion rate of 75.47 shares per $1,000 principal amount of
Debentures) and a cash payment in lieu of any fractional share
interest.
++ Total differs from amount to be registered due to the rounding of
fractional shares.
(1) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Declaration of Trust for the
Defined Benefit Plan of ICI American Holdings Inc.
(2) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Declaration of Trust for the
Defined Benefit Plan of ZENECA Holdings Inc.
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(3) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Delaware State Employees
Retirement Fund.
(4) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to General Motors Employees
Domestic Group Trust.
(5) Voting and investment power is shared by HBK Investments LP, which
acts as investment manager to HBK Finance L.P.
(6) Sole voting and investment power is held by HBK Investments LP, which
acts as investment manager to HBK Securities Ltd.
(7) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Hillside Capital
Incorporated Corporate Account.
(8) Voting and investment power is shared with Hybridge Capital
Management, Inc., trading manager of Hybridge Capital Corporation.
(9) Investment power is shared with Forest Investment Management, L.P.
(10) Voting and investment power is shared with MacKay-Shields Financial
Corporation, which acts as investment advisor for New York Life
Separate A/C #7.
(11) Smith Barney Inc. was an Initial Purchaser of the Debentures. See
"Plan of Distribution."
(12) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Summer Hill Global Partners,
L.P.
(13) Voting and investment power is shared with MacKay-Shields Financial
Corporation, which acts as investment advisor for The Brown &
Williamson Retirement Trust.
(14) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to The J.W. McConnell Family
Foundation.
(15) Voting and investment power is shared with MacKay-Shields Financial
Corporation, which acts as investment advisor for The MainStay Funds
on behalf of its Convertible Fund series.
(16) Thebes Ltd. is a sole partnership owned by Mary Pappajohn, the spouse
of John Pappajohn, a director of the Company. Mr. Pappajohn
disclaims beneficial ownership of these securities.
(17) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Thermo Electron Balanced
Investment Fund.
(18) Voting and investment power is shared with Van Kampen American Capital
Asset Management, Inc., which acts as investment advisor for the fund.
(19) Information regarding these persons or entities may be added from time
to time by one or more supplements to this Prospectus.
Unless otherwise indicated, none of the Selling Securityholders has,
or within the past three years has had, any position, office or other material
relationship with the Company or any of its predecessors or affiliates.
Because the Selling Securityholders may, pursuant to this Prospectus, offer all
or some portion of the Debentures or the Conversion Shares, no estimate can be
given as to the amount of the Debentures or the Conversion Shares that will be
held by the Selling Securityholders upon termination of any such sales. In
addition, the Selling
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Securityholders identified above may have sold, transferred or otherwise
disposed of all or a portion of their Debentures, in transactions exempt from
the registration requirements of the Securities Act, since the date on which
they provided the information regarding their Debentures. See "Plan of
Distribution."
WA980610.198/1+
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