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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
5,660,377 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
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This document supplements the Prospectus dated 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) not more than 5,660,377 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 "Shares"). The Debentures and the 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 is July 13, 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% 113,207
Argent Classic Convertible Arbitrage Fund,
L.P. $1,500,000 2.00% 113,207
Argent Classic Convertible Arbitrage Fund,
L.P. Bermuda $1,000,000 1.33% 75,471
Arkansas PERS $1,200,000 1.60% 90,566
Associated Electric & Gas Insurance Services
Ltd. $250,000 * 18,867
Bear Stearns & Co., Inc. $937,000 1.25% 70,716
Bond Fund Series--Oppenheimer Bond Fund for
Growth $4,000,000 5.33% 301,886
Declaration of Trust for the Defined Benefit
Plan of ICI American Holdings Inc. (1) $680,000 * 51,320
Declaration of Trust for the Defined Benefit
Plan of ZENECA Holdings Inc. (2) $470,000 * 35,471
Delaware PERS $1,075,000 1.43% 81,132
</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>
Delaware State Employees Retirement Fund (3) $2,230,000 2.97% 168,301
Deutsche Bank A.G. London $1,550,000 2.06% 116,981
Donaldson, Lufkin & Jenrette Sec. Corp. $312,000 * 23,547
1st Source Bank $800,000 * 60,377
Forest Fulcrum Fund L.P. $1,380,000 1.84% 104,150
Forest Global Convert Fund Ser A-5 $1,195,000 1.59% 90,188
General Motors Employees Domestic Group Trust
(4) $7,850,000 10.5% 592,452
HBK Finance L.P. (5) $783,000 1.04% 59,094
HBK Securities Ltd (6) $967,000 1.29% 72,981
Hillside Capital Incorporated Corporate
Account (7) $200,000 * 15,094
Highbridge Capital Corporation (8) $2,000,000 2.67% 150,943
ICI American Holdings Trust $450,000 * 33,962
HSBC Securities $1,200,000 1.60% 90,566
JMG Convertible Investment $250,000 * 18,867
Lincoln National Convertible Securities Fund $2,270,000 3.01% 171,320
LLT Limited (9) $25,000 * 1,886
Maril & Co. $500,000 * 37,735
NALCO Chemical Retirement Trust $200,000 * 15,094
New York Life Separate A/C #7 (10) $250,000 * 18,867
</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>
Offshore Strategies LTD $500,000 * 37,735
Paloma Securities L.L.C. $600,000 * 45,283
Public Employees' Retirement Association of
Colorado $750,000 1.00% 56,603
Santander Merchant Bank, Limited $713,000 * 53,811
Silverton International Fund Limited $400,000 * 30,188
Smith Barney Inc. (11) $3,289,000 4.39% 248,226
Southport Partners International LTD $250,000 * 18,867
Starvest Discretionary $250,000 * 18,867
State of Oregon Equity $3,500,000 4.67% 264,150
Summer Hill Global Partners, L.P. (12) $50,000 * 3,773
Tennessee Consolidated Retirement System $2,000,000 2.67% 150,943
The J.W. McConnell Family Foundation (13) $420,000 * 31,698
Thebes Ltd. (14) $500,000 * 37,735
Thermo Electron Balanced Investment Fund (15) $600,000 * 45,283
Van Kampen American Capital Convertible
Securities Fund (16) $640,000 * 48,301
Van Kampen American Capital Harbor Fund (16) $3,360,000 4.48% 253,584
Walker Art Center $260,000 * 19,622
Weirton Trust $670,000 * 50,566
ZENECA Holdings Pension Trust $450,000 * 33,962
</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>
Any other Selling Securityholders or future
transferees from such Selling Securityholders
(17) $18,774,000 25.03% 1,416,905
$75,000,000 5,660,350++
=========== ===========
</TABLE>
* Less than one percent.
+ Assumes a conversion price of $13.25 per share, rounded down to the
nearest whole share. Fractional shares of Common Stock will not be
issued upon conversion, but, in lieu thereof, the Company will pay a
cash adjustment based upon the then Closing Price at the close of
business on the day of conversion.
++ 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.
(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 Highbridge 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.
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(13) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to The J.W. McConnell Family
Foundation.
(14) Thebes Ltd. is a sole partnership owned by Mary Pappajohn, the spouse
of John Pappajohn, a former director of the Company who resigned in
November 1997. Mr. Pappajohn disclaims beneficial ownership of these
securities.
(15) Sole voting and investment power is held by Pecks Management Partners
Ltd., which acts as investment advisor to Thermo Electron Balanced
Investment Fund.
(16) Voting and investment power is shared with Van Kampen American Capital
Asset Management, Inc., which acts as investment advisor for the fund.
(17) 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 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."
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