SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 12, 1998
PARACELSIAN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19844 56-1399565
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
222 LANGMUIR LABORATORIES, CORNELL TECHNOLOGY PARK, ITHACA, NEW YORK 14850
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(Address, including zip codes, of principal executive offices)
Bernard Landes
222 Langmuir Laboratories
Cornell Technology Park
Ithaca, New York 14850
(607) 257-4224
(Address, Including Zip Code and Telephone, Including Area Code,
of Registrant's Principal Executive Offices)
(607) 257-4224
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Paracelsian, Inc. and R.P. Scherer Corporation announced on August 13,
1998, a second agreement that extended, on a worldwide basis, the July 9, 1998,
agreement that established R.P. Scherer North America as the exclusive marketing
and distribution agent for Paracelsian's BioFIT (Bio Functional Integrity
Testing) Certification program in the Dietary Supplement and OTC market segments
in North America. This worldwide agreement also provides for collaboration
between the two companies on the development of new dietary supplements and OTC
products.
The terms of the worldwide agreement will duplicate those of the North
American agreement. Paracelsian will initially complete development of 10 BioFIT
assay systems. R.P. Scherer North will pay Paracelsian initial fees, concurrent
with the completion of the BioFIT assay systems, certification of products, and
completion of agreements with R.P. Scherer customers. The companies will market
the program jointly. Paracelsian will also receive royalties on the sale of all
BioFIT certified products and there are minimum royalty payments.
In addition to the initial fees, Paracelsian Inc. will receive from the
worldwide and North American agreements a minimum of $800,000 ($400,000 per
agreement) in royalty payments in the initial period of both agreements.
Paracelsian must receive minimum royalties of $1.4 million ($700,000 per
agreement) in the subsequent 12-month period for automatic renewal. Both
agreements will continue to renew automatically with Paracelsian receiving
royalties adjusted upward annually. Total fees paid to Paracelsian in the
initial period from both the worldwide and North American agreements are
expected to be at least $2 million.
Sales of botanical products in the United States represent 18% of worldwide
sales of these types of products. Sales of botanical products outside the United
States, now covered by this new agreement, represent 82% of the worldwide sales
of these types of products. This distribution of sales makes the potential
revenue to Paracelsian from this worldwide agreement even greater than those
from the North American agreement, even though the terms are the same.
On August 12, 1998, Paracelsian announced that its Board of Directors
approved an extension through September 6, 1999, of the publicly traded warrants
for common stock which were a dividend in September 1993. The warrants were set
to expire on September 6, 1998. In addition to extending the warrants, The Board
of Directors approved changes to the exercise price of the warrants. The
exercise price will be reduced from $3.25 to $1.75 through December 1998. The
exercise price will increase to $2.50 from January 1, 1999 to April 30, 1999 and
to $3.25 from May 1, 1999 to September 6, 1999. Holders of warrants will be
notified by mail and provided with the details of the changes.
2
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This report contains various "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that represent the Company's judgment
concerning the future and are subject to risks and uncertainties that could
cause the Company's actual operating results and financial position to differ
materially from those projected in the forward looking statements. Such forward
looking statements can be identified by the use of forward looking terminology,
such as "may," "will," "expect," "anticipate," "estimate," or "continue" or the
negative thereof or other variations thereof or comparable terminology. The
Company cautions that any such forward looking statements are further qualified
by important factors that could cause the Company's actual operating results and
financial position to differ materially from the forward looking statements,
including, without limitation, the actual results of research and development
efforts, the effect of regulation by the United States Food and Drug
Administration and other government agencies, the impact of competitive products
and services, and other considerations described in connection with specific
forward looking statements and the Company's periodic reports as filed with the
Securities and Exchange Commission. The Company undertakes no obligation to
release publicly the results of any revisions to these forward looking
statements to reflect events or circumstances arising after the date of this
report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) EXHIBITS.
Exhibit No. Description
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99A Press Release dated August 12, 1998
99B Press Release dated August 13, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly cause this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
PARACELSIAN, INC.
By: /s/ BERNARD LANDES
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Bernard Landes
Chairman and Chief Executive Officer
PARACELSIAN ANNOUNCES BIOMAR INVESTMENT AND WARRANT ACTIONS
August 12, 1998, Ithaca, NY (NASDAQ: PRLN) Paracelsian, Inc.
(http://www.paracelsian.com) announced today that Biomar International, Inc. has
exercised its warrants for Paracelsian common stock in the aggregate amount of
$520,000. The warrants were issued in connection with the initial investment
transaction between Paracelsian and Biomar in January, 1998.
"For an early stage company such as Biomar, capital is our most precious
resource. Our initial investment in January put Biomar's survival at risk," said
T. Nelson Campbell, Biomar's Chairman. "The extraordinary efforts of Bernie
Landes, Paracelsian's CEO, and the rest of the administrative and science team
at Paracelsian have validated our initial belief in the promise of Paracelsian.
Our follow-up investment is a vote of confidence in this hardworking and
talented team," Mr.
Campbell added.
In a related development, Paracelsian announced today that its Board of
Directors has approved an extension of the warrants for Common Stock through
September 6, 1999. The warrants, which were a dividend in September 1993, were
set to expire on September 6, 1998. In addition to extension of the warrants,
the Paracelsian Board of Directors approved changes to the exercise price of the
warrants. The exercise price will be reduced from $3.25 to $1.75 through
December 1998. The exercise price will increase to $2.50 from January 1, 1999 to
April 30, 1999, and to $3.25 from May 1, 1999 to September 6, 1999. Holders of
the warrants will be notified by mail and provided with the details of the
changes.
"We have made the adjustments to our publicly traded warrants as part of our
overall financing strategy," said Bernie Landes, Paracelsian's President and
CEO. "We anticipate that the exercise of warrants will help bridge the Company
into positive cash flow from our relationship with R.P. Scherer and our other
initiatives," he added.
Paracelsian is a unique biotechnology company whose business centers on the
development and application of functional bioassays. These assays are used for
Quality Assurance of herbs, botanicals and other dietary supplements, in the
development of dietary supplement, OTC and pharmaceutical products, and in
monitoring environmental toxins and identifying carcinogens.
Notice: This news release and oral statements made from time to time by Company
representatives concerning the same subject matter may contain so-called
"forward-looking statements'". These statements can be identified by
introductory words such as "expects", "plans'", "will", "estimates",
"forecasts", "projects" or words of similar meaning.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties, including but not limited to, the results of research and
development efforts, the effect of regulation by the United States Food and Drug
Administration and other agencies, the impact of competitive products, product
development commercialization and technological difficulties, and other risks
detailed in the Company's periodic reports filed with the Securities and
Exchange Commission.
No forward-looking statement is a guarantee of future results or events, and one
should avoid placing undue reliance on such statements.
Contact: Bernie Landes - President and CEO (607) 257-4224
PARACELSIAN ANNOUNCES WORLDWIDE AGREEMENT WITH R.P. SCHERER
ITHACA, N.Y., August 13 /PRNewswire/ -- (Nasdaq: PRLN - news) Paracelsian, Inc.
(http://www.paracelsian.com) announced today that it has reached an agreement
with R.P. Scherer Corporation to extend, on a worldwide basis, the agreement
signed on July 8, 1998 that established R.P. Scherer North America as
Paracelsian's exclusive agent for the marketing and distribution of its BioFIT
Certification program. The worldwide agreement will effectively duplicate the
terms of the North American agreement.
R.P. Scherer (http://www.rpscherer.com), is a leading manufacturer of herbal and
other dietary supplement products, and the world leader in soft gel technology
and drug delivery systems.
The agreement between Paracelsian and R.P. Scherer is now worldwide in scope and
provides revenues to Paracelsian from development fees, certification fees, and
minimum required royalty payments.
"This worldwide agreement represents significant value to Paracelsian and its
shareholders by opening up the entire world as a market for our technology",
stated Bernie Landes, Paracelsian's President and CEO. "The agreement covers the
cost of developing and running the BioFIT Certification Program, while also
providing a continuing, growing, and highly profitable royalty stream," he
added.
"We are anxious to move forward with our new partner to fully develop the market
potential for this breakthrough technology," Landes concluded.
Under the terms of the combined agreements, Paracelsian will develop BioFit
assay systems. R.P. Scherer will receive exclusive BioFit marketing and
distribution rights. R.P. Scherer will pay Paracelsian fees concurrent with the
completion of BioFIT assay systems, certification of products, and completion of
agreements with new customers. The terms of the agreement call for Paracelsian
to receive royalties on the sale of all BioFIT certified products and the
establishment of minimum royalty payments. In addition to these fees, Scherer
agrees to pay Paracelsian a per batch fee for ongoing certification of products
on a batch to batch basis. These fees represent a significant additional source
of revenue to Paracelsian.
"By extending the current U.S. relationship with Paracelsian worldwide, R.P.
Scherer will continue to strengthen its market leadership in the emerging herbal
category in other strategically important regions of the world," said Frank
Reilly, R.P. Scherer's Director of Global Nutritional New Products Worldwide.
"We are very enthusiastic about expanding this important program and will
aggressively commit to its success," he added.
R.P. Scherer Corporation, an international developer and manufacturer of drug
delivery systems, is the world's largest producer of soft gelatin capsules
("soft gels"). The company is currently developing and commercializing a variety
of advanced drug delivery systems. The company's proprietary drug delivery
systems improve the efficacy of drugs by regulating the dosage so as to ease
administration, increase absorption, enhance bioavailability and control the
time and place of release. The company operates a global network of 19
facilities in 12 countries.
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Paracelsian is a unique biotechnology company whose business centers on the
development and application of functional bioassays. These assays are used for
Quality Assurance of herbs, botanicals and other dietary supplements, in the
development of dietary supplement, OTC and pharmaceutical products, and in
monitoring environmental toxins and identifying carcinogens.
Notice: This news release may contain forward-looking statements.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties, including but not limited to, the results of research and
development efforts, the effect of regulation by the United States Food and Drug
Administration and other agencies, the impact of competitive products, product
development commercialization and technological difficulties, and other risks
detailed in the Company's periodic reports filed with the Securities and
Exchange Commission.
No forward-looking statement is a guarantee of future results or events, and one
should avoid placing undue reliance on such statements.
Contact: Bernie Landes (607-257-4224)
