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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1996
REGISTRATION NO. 333-5035
============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
TECHNICAL CHEMICALS AND PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------------
<TABLE>
<S> <C> <C>
FLORIDA 3341 S.W. 15th Street 65-0308922
(State or other jurisdiction of Pompano Beach, FL 33069 (I.R.S. Employer
incorporation or organization) (954) 979-0400 Identification Number)
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
</TABLE>
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COPY TO:
<TABLE>
<S> <C>
Brian Foremny, Esq. Jack L. Aronowitz
Holland & Knight Technical Chemicals and Products, Inc.
One East Broward Boulevard, Suite 1300 3341 S.W. 15th Street
Fort Lauderdale, FL 33301 Pompano Beach, FL 33069
954-525-1000 954-979-0400
Telecopier No. 305-463-2030 Telecopier No. 305-979-0009
(Name, address, including zip code, and telephone number,
including area code, of agent for service.
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time 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 ("Securities Act"), 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. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2
--------------------
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
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PROSPECTUS
1,001,214 SHARES
(TCPI LOGO)
COMMON STOCK
___________________________________
The Prospectus relates to an aggregate of 1,001,214 shares (the
"Shares") of common stock, par value $.001 per share ("Common Stock"), of
Technical Chemicals and Products, Inc., a Florida corporation (the "Company" or
"TCPI") which may be offered (the "Offering"), for sale by certain shareholders
of the Company or by pledgees (the "Selling Shareholders") who have acquired
such shares in certain acquisitions and private placements by the Company not
involving a public offering and non-sale related transfers, including 320,000
shares which may be offered for sale by certain of the Selling Shareholders who
may acquire such shares pursuant to the exercise of certain warrants. The
Shares are being registered under the Securities Act of 1933, as amended (the
"Securities Act"), on behalf of the Selling Shareholders in order to permit
the public sale or other distribution of the Shares.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Shareholders through underwriters or dealers, through
brokers or other agents, or directly to one or more purchasers, including
pledgees, at market prices prevailing at the time of sale or at prices
otherwise negotiated. This Prospectus may also be used, with the Company's
consent, by donees of the Selling Shareholders, or by other persons acquiring
shares and who wish to offer and sell such Shares requiring or making desirable
its use. The Company will receive no portion of the proceeds from the sale of
the Shares offered hereby and will bear certain expenses incident to their
registration. See "Selling Shareholders" and "Plan of Distribution."
The Common Stock is traded on The Nasdaq Stock Market National Market
("Nasdaq") under the symbol "TCPI." On June 18, 1996, the last reported sale
price of the Common Stock as reported by Nasdaq was $13.00 per share.
INVESTORS SHOULD CAREFULLY CONSIDER CERTAIN RISKS AND OTHER CONSIDERATIONS
RELATING TO THE COMMON STOCK AND THE COMPANY. SEE "RISK FACTORS" STARTING ON
PAGE 5 OF THIS PROSPECTUS.
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.
JUNE 20, 1996
<PAGE> 4
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. NEITHER THE DELIVERY OF THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
and information statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and
at the Commission's regional offices located at Northwest Atrium Center, Suite
1400, 500 West Madison Street, Chicago, IL 60661 and at Seven World Trade
Center, New York, New York 10048. Copies of such material can also be
obtained from the Commission at prescribed rates through its Public Reference
Section at 450 Fifth Street, N.W., Washington, D.C. 20549. The Common Stock
is traded on Nasdaq. Information filed by the Company with Nasdaq may be
inspected at the offices of Nasdaq at 1735 K Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended ("Securities Act") with
respect to the Shares offered hereby (including all amendments and supplements
thereto, the "Registration Statement"). This Prospectus, which forms a part of
the Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of certain documents are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference. The Registration Statement and the exhibits thereto can be
inspected and copied at the public reference facilities and regional offices of
the Commission and at the offices of Nasdaq referred to above.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus, under the caption "Risk Factors" and
elsewhere in this Prospectus constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors, include, among others, the following
general economic and business conditions; competition; the Company's dependence
on a key customer and key products; uncertainty of results of pre-clinical and
clinical testing; risk of technological obsolescence; the Company's dependence
upon other companies to manufacture, market and distribute the Company's
products; risk of product liability; uncertainty of government regulation,
health care reform and third party reimbursement; the Company's dependence on
patents and proprietary rights; changes in business strategy or development
plans; quality of management; availability, terms and development of capital;
business abilities and judgement of personnel; availability of qualified
personnel; changes in, or the failure to comply with, government regulations;
litigation; failure to obtain regulatory approval for the Company's proposed
products; and other factors referenced in this Prospectus. See "Risk Factors."
THE COMPANY
TCPI is principally engaged in the design, development, manufacture and
marketing of a wide range of medical diagnostic products for use in physician
offices, at home and at other point-of-care locations. The Company's medical
diagnostic products employ its patented and proprietary membrane-based
technology. In addition to its ongoing diagnostics business, the Company,
through its recently acquired Pharmetrix Division, is involved in the research,
development and commercialization of transdermal and mucosal drug delivery
systems and skin permeation enhancers. The Company currently owns 16 U.S.
patents and 28 foreign patents, and has seven pending U.S. patent applications
and 38 pending foreign patent applications. As used in this Prospectus, unless
otherwise indicated, the terms "Company" and "TCPI" include the Company's
majority-owned subsidiary, Health-Mark Diagnostics, L.L.C. ("Health-Mark").
TCPI manufactures and markets over 25 membrane-based diagnostic tests in
the United States and internationally, 13 of which have received 510(k)
approval from the United States Food and Drug Administration (the "FDA"). The
Company's products include tests for pregnancy, ovulation timing, cholesterol
levels, blood glucose levels, infectious diseases and drugs of abuse. In
addition, the Company manufactures over 20 other diagnostic products. Overall,
the Company or its founder have developed over 300 FDA approved medical
diagnostic products. In 1995, the Company sold approximately six million
pregnancy tests, representing approximately 12% of the 49 million tests sold
worldwide. Most of these tests were sold through the Company's alliance with
Boehringer Mannheim. This alliance also extends to the marketing and
distribution of certain of the Company's other products, including its Serum
Dilution Reagent (hCG Test) and its OneStep(TM) LH Ovulation Tests. The
Company also markets its products under its proprietary brand name, PDQ(TM),
and under private label arrangements to drug, discount and supermarket chains
such as CVS, Duane Reade, Thrifty Payless, Thrift Drug, Woolworth, Fedco,
Long's and Smith's Food & Drug. In addition, pursuant to an agreement recently
entered into with Amway Corporation, a retail catalog distributor, the
Company's OneStep hCG Pregnancy(R) Midstream Wand, OneStep hCG Pregnancy(R)
Test Slide and OneStep(TM) LH Ovulation Test Strip will be featured for sale in
Amway Corporation's 1996 personal shoppers' catalogue.
TCPI's objective is to build a fully integrated research and development,
manufacturing, marketing and distribution organization capable of providing the
medical diagnostic and drug delivery markets with products that offer accuracy,
efficacy, ease of use and reduced costs. To achieve this goal, the Company
will rely on its experienced management team, the breath of its proprietary
technologies and its broad
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range of products. The Company believes that it will achieve its highest level
of commercial success by collaborating with major international medical
diagnostic and pharmaceutical companies in the development and marketing of
certain of its products, while retaining manufacturing rights to such products.
The Company was incorporated in Florida on January 30, 1992. The Common
Stock is traded on Nasdaq under the symbol "TCPI." The Company's executive
offices are located at 3341 S.W. 15th Street, Pompano Beach, Florida 33069, and
its telephone number is (954) 979-0400.
RECENT DEVELOPMENTS
On April 30, 1996, the Company sold an aggregate 1,585,000 shares (after
exercise of an over-allotment option) of Common Stock for approximately $23.8
million pursuant to a public offering ("Public Offering") in which Deutsche
Morgan Grenfell/C.J. Lawrence, Inc. acted as representative of the underwriting
syndicate. Certain shareholders of the Company, including Pharma Parch Public
Limited Company ("Pharma Patch"), Redstone Securities, Inc. and Ira Weingarten,
some of the Selling Shareholders, sold shares of Common Stock in the Public
Offering.
Upon completion of the Public Offering, the Company repaid approximately
$2.1 million of the approximately $5.25 million of outstanding indebtedness
incurred in connection with the acquisition of its Pharmatrix division, with
proceeds from such offering. The Company anticipates using the remaining $20.0
million of net proceeds from the Public Offering to repay outstanding
indebtedness, purchase production equipment, engage in research and development
relating to transdermal drug delivery, conduct clinical trials and for working
capital and other general corporate purposes.
In April 1996, Stuart R. Streger, C.P.A. was appointed as a Vice President
and as Chief Financial Officer of the Company, and Robert G. Pitts, J.D, Ph.D.,
was appointed Vice President, Business Development of the Company. In May 1996,
Elias Amador, M.D., Ph.D. and Kathryn Harrigan, MBA, D.B.A., became members of
the Board of Directors and Murray D. Watson resigned from his position as a
member of the Board of Directors.
In January 1996, the Company's Board of Directors recommended for
approval the adoption of amended and restated Articles of Incorporation (the
"Articles of Incorporation") and approved the adoption of Amended and Restated
Bylaws (the "Bylaws") which include certain anti-takeover provisions that could
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, a majority of the outstanding voting
stock of the Company. In February 1996, the then majority shareholder approved
the Articles of Incorporation, effective on March 14, 1996. These provisions
(the "Anti-Takeover Provisions") include a staggered Board of Directors,
certain super majority voting requirements with respect to removal of directors
and amendments to the Articles of Incorporation and Bylaws, requirements
concerning the filling of board vacancies, adoption of Florida's Control Share
Acquisition Act, elimination of shareholder action by written consent, an
increase in the number of authorized shares of Common Stock from 25,000,000 to
100,000,000, creation of a class of "blank check" preferred stock and an
increase in the percentage of shareholder votes required to call a special
meeting of shareholders. See "Description of Securities."
The Company's Board of Directors and the then majority shareholder also
approved the adoption of a Shareholder Protection Rights Agreement pursuant to
which preferred stock purchase rights will be distributed to holders of Common
Stock. These provisions and said agreement are intended to encourage a person
interested in acquiring the Company to negotiate with, and to obtain the
approval of, the Board of Directors in connection with such a transaction.
However, certain of these provisions and said agreement may discourage a future
acquisition of the Company, including an acquisition in which shareholders
might otherwise receive a premium for their shares. As a result, shareholders
who might desire to participate in such a transaction may not have the
opportunity to do so. See "Description of Securities."
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RISK FACTORS
Investment in the Common Stock offered hereby involves a high degree of
risk. In addition to the other information contained in this Prospectus in
evaluating the Company and its business, prospective investors should consider
carefully the following factors before purchasing any shares of Common Stock
offered hereby.
EARLY STAGE OF THE COMPANY; FUTURE PROFITABILITY UNCERTAIN
The Company commenced operations in January 1992. Approximately 90% of the
Company's revenues for the fiscal years ended 1993 and 1994 and 70% of the
Company's revenues for the year ended 1995 were generated from net sales of the
Company's OneStep hCG Pregnancy(R) Tests to a single customer. In order to
support anticipated growth and new product development, the Company anticipates
that it will incur significantly increased operating expenses, particularly
research and development expenses, in the future. Research and development
expenditures for 1995 were $434,981 (approximately $1.8 million pro forma to
reflect the acquisition of the Pharmetrix Division). The Company's research
and development expenditures are expected to increase to approximately $5.0
million in 1996. The Company incurred a net loss of $1,493,628 for 1995 (pro
forma net loss of $5,860,125 reflecting the acquisition of the Pharmetrix
Division) and expects to incur net losses in 1996. The Company had an
accumulated deficit and working capital deficit at March 31, 1996 of $2,356,736
and $3,978,950, respectively. No assurance can be given that the Company will
achieve profitability in the future.
DEVELOPMENT STAGE OF PRODUCTS
Most of the Company's products are in various stages of development and
have not yet been commercialized. Before the Company can commercially market
its products in the United States, permission for their distribution must be
obtained from the FDA. Generally, the Company must also seek approval from
comparable agencies in foreign countries where it desires to distribute its
products. The Company's principal products under development, the TD Glucose
System, the OneStep(TM) CholestoChek System and various transdermal and mucosal
drug delivery systems, have not yet received FDA approval (the OneStep Total
Cholesterol(TM) Test Strip has received 510(k) approval for use for visual
monitoring). There can be no assurance that the Company's products will be
developed to a point at which they are ready to be submitted for FDA approval
or that the Company will be able to obtain the necessary FDA approvals for such
products or that it will not experience significant delay and/or expense in
obtaining such approvals, each of which may adversely affect the Company's
ability to market and sell its products. Further, because of the Company's
limited resources, it may be unable to complete the development of all of its
planned drug delivery products and may only be able to complete the development
of those products that it believes have the greatest potential for commercial
success. There can be no assurance, however, that the products selected for
development by the Company will in fact achieve any degree of commercial
success.
DEPENDENCE ON KEY CUSTOMER AND KEY PRODUCTS
Approximately 90% of the Company's net sales for 1994 and 70% for 1995 were
derived from sales to Boehringer Mannheim. The principal products purchased by
Boehringer Mannheim were the Company's OneStep hCG Pregnancy(R) Test Slide, its
OneStep hCG Pregnancy(R) Test Strip, its OneStep hCG Pregnancy(R) Midstream
Wand and its OneStep(TM) LH Ovulation Test Strip. In the event that sales to
Boehringer Mannheim, particularly sales of the Company's One Step hCG
Pregnancy(R) Tests, cease for any reason, the Company will experience a
material adverse change in its financial condition. Although the Company has
received purchase orders of approximately $1.3 million from Boehringer Mannheim
for shipment from January through June 1996, and has an additional $0.6 million
in back orders, no assurance
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exists that the Company will continue to make sales to Boehringer Mannheim.
See Note 9 to the Company's Consolidated Financial Statements for the fiscal
years ended December 31, 1995, 1994 and 1993 for additional information
concerning the volume of sales to Boehringer Mannheim.
LIMITED MARKETING EXPERIENCE; DEPENDENCE ON OUTSIDE PARTIES
To date, the Company's medical diagnostic products have primarily been
distributed through the Company's alliance with Boehringer Mannheim. To a
lesser extent, the Company's medical diagnostic products have been distributed
by the Company directly under the Company's proprietary brand name and under
private label arrangements with drug, discount and supermarket chains.
Although the Company intends to expand direct distribution of its medical
diagnostic products, the Company's strategy for the commercialization of most
of its medical diagnostic and drug delivery products contemplates that it will
enter into arrangements with larger medical diagnostic or pharmaceutical
companies to market its products. In order to successfully develop and market
these products, the Company will need to depend on these third parties for
their significantly greater marketing and distribution capabilities, as well as
possibly for the funding of a portion of product development costs, marketing
of the product and, in some cases, participation in clinical testing and
obtaining regulatory approvals. There can be no assurance that the Company
will be able to enter into any such arrangements on favorable terms, or at all.
Even if the Company is successful in obtaining such third party alliances,
there can be no assurance that any alliance will be successful. The success of
any strategic alliance is dependent upon, among other things, the financial
condition of the partner, its commitment to the strategic alliance and the
skills and experience of its employees responsible for the strategic alliance.
SUBSTANTIAL COMPETITION AND TECHNOLOGICAL CHANGE
The markets in which the Company operates are highly competitive and
subject to rapid technological change. Competitors include major
pharmaceutical, medical diagnostic and chemical companies, many of which have
considerably greater financial, technical, clinical, marketing and other
resources and experience than the Company. The markets in which the Company
competes and intends to compete are undergoing, and are expected to continue to
undergo, rapid and significant technological change, and the Company expects
competition to intensify as technological advances in such fields are made.
Several of the Company's competitors have developed or may develop products
that are similar in design and capability to the Company's existing products or
products under development. The Company further anticipates that additional
products for similar applications will be developed and marketed by the
Company's competitors. There can be no assurance that the Company will be able
to successfully compete or that developments by others will not render the
Company's products or technologies obsolete or noncompetitive.
RISKS, EXPENSE AND UNCERTAINTY OF GOVERNMENT REGULATION
The Company's products are subject to regulation by the FDA and, in most
instances, comparable agencies in other foreign countries in which these
products are manufactured or distributed. Before the Company's products can be
marketed commercially in the United States, they must receive FDA approval or
clearance. To date, the Company has received FDA clearance to distribute all
of its pregnancy test products, its LH ovulation products and the visually read
version of its OneStep Total Cholesterol(TM) Test Strip. However, most of the
Company's products under development, including the TD Glucose System, the
CholestoChek Meter and various transdermal products, have not yet received FDA
approval. In addition to product approvals and clearances, medical device and
drug products are required to comply with FDA regulations relating to
investigational research, labeling and post-market reporting. The process of
obtaining FDA or equivalent foreign agency approval can be costly, time
consuming and may be subject to unanticipated delays. There can be no
assurance that the required approvals for any of the Company's products will be
granted on a timely basis, if at all. Any delay in obtaining, or failure to
obtain, such
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approvals could adversely affect the ability of the Company to market and sell
its products. In addition, regulatory requirements could adversely affect the
Company's ability to clinically test, manufacture or market products.
Further, the FDA and various state agencies inspect the Company from time
to time to determine whether the Company is in compliance with regulations
relating to manufacturing, testing, storage, quality control and product
labeling practices. There can be no assurance that these future inspections
will not raise compliance questions and concerns that may be costly and/or
time-consuming to remedy and may adversely affect the Company's ability to
manufacture and market its products. A determination that the Company is in
material violation of FDA and/or various state regulations could lead to the
imposition of civil penalties, including fines, recall orders or product
seizures, or criminal sanctions.
LIMITED MANUFACTURING EXPERIENCE
Third party contractors manufacture a majority of the Company's products.
The Company does not presently have sufficient in-house manufacturing
capabilities to supply its customers' demands. The Company intends to use a
portion of the proceeds of the Offering to purchase additional production
equipment and expand its manufacturing capabilities. As a result of the
proposed expansion of its manufacturing facilities, the Company expects its
reliance on third party manufacturers to decrease. In doing so, the Company
will become further subject to the problems facing product manufacturers
generally, including, without limitation, delays in receiving raw materials,
rising prices for materials and the need to obtain and maintain equipment and
avoid down time resulting from equipment failures. To be successful, the
Company's products must be manufactured in commercial quantities in compliance
with regulatory requirements and at acceptable costs. Production of these
products, especially in commercial quantities, will create technical, as well
as financial, challenges for the Company and no assurance can be given that
manufacturing or quality control problems will not arise. Although certain of
the Company's employees have substantial manufacturing experience, the Company
itself has not engaged in significant manufacturing operations.
Notwithstanding the Company's plans to expand its manufacturing capabilities,
the Company will, for the foreseeable future, remain dependent upon third party
manufacturers. There can be no assurance that the Company will be able to
retain its current third party manufacturers or obtain acceptable replacements,
if necessary.
RISKS RELATING TO GROWTH AND EXPANSION
Growth of the Company's business may significantly strain the Company's
management, operations and technical resources. If the Company is successful
in obtaining market penetration of its products, the Company will be required
to deliver large volumes of quality products to its customers on a timely basis
at a reasonable cost to those customers. The Company has limited experience in
delivering large volumes of certain of its products. Failure to manage growth
effectively could have an adverse effect on the business of the Company. There
can be no assurance, however, that the Company's business will achieve growth
or that its efforts to expand its manufacturing and quality control activities
will be successful or that it will be able to satisfy commercial scale
production requirements on a timely and cost- effective basis. Although
individually several members of the Company's management have experience in
working with rapidly growing companies, the Company's management team was
recently assembled and has limited experience in working together.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company has patents issued and patent applications pending in the
United States and several foreign countries. With regard to aspects of its
membrane-based technology, the Company has obtained patents in the United
States but has not obtained corresponding European patents. There can be no
assurance (i) as to the degree or adequacy of protection any patents or patent
applications may or will
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afford; (ii) that patents will issue from any pending applications, or that the
claims allowed under any patents will be sufficiently broad to protect the
Company's technology; or (iii) that any patents issued to the Company will not
be challenged, invalidated or circumvented. In addition, the Company claims
proprietary rights in various unpatented technologies, know-how, trade secrets
and trademarks relating to its products and manufacturing processes. There can
be no assurance as to the degree of protection these various claims may or will
afford, or that the Company's competitors will not independently develop or
patent technologies that are substantially equivalent or superior to the
Company's technology. It is the policy of the Company to protect its
proprietary rights in its products and operations through contractual
obligations, including non-disclosure agreements with certain employees,
customers, consultants and strategic partners. There can be no assurance as to
the degree of protection these contractual measures afford. In addition,
although the Company does not believe that it is infringing any patents,
proprietary rights or trade secrets of others, there can be no assurance that
an infringement claim will not be asserted against the Company in the future.
If the Company is found to be infringing any third party patents, proprietary
rights or trade secrets, there can be no assurance that it will be able to
obtain licenses with respect to such patents, proprietary rights or trade
secrets on acceptable terms, if at all. If the Company does not obtain such
licenses, it could encounter delays in product introductions or could find that
the development, manufacture or sales of products requiring such licenses could
be foreclosed. The Company could also experience a loss of revenues, an
increase in costs and incur substantial expense for defending itself in
lawsuits brought against it with respect to such patents, proprietary rights or
trade secrets. Further, no assurance can be given that any patent, proprietary
right or trade secret obtained or licensed by the Company will be held valid
and enforceable if challenged by another party.
LITIGATION
On August 11, 1995, Joseph D'Angelo et al. ("D'Angelo") filed a complaint
in the Circuit Court of Broward County, Florida against the Company, Jack L.
Aronowitz and certain other parties (the "Lawsuit"). With respect to the
Company and Mr. Aronowitz, the Lawsuit alleges, among other things,
misappropriation of trade secrets, confidential information and intellectual
property related to an HIV saliva test kit and misappropriation of D'Angelo's
"transdermal technology" and "non-invasive testing technology." The Lawsuit
seeks injunctive relief and monetary damages in excess of $2.0 million.
Although the Lawsuit is in its preliminary stages and no discovery has yet been
taken, the Company, after consultation with its counsel, believes that each of
the allegations made against it in the Lawsuit are without merit.
The Company is challenging the validity and/or scope of a patent in Europe.
In the event that the validity and scope of such patent is upheld and the
Company's products are found to have infringed such patent, the Company may be
required, in certain European countries, to modify or discontinue distribution
of one of its pregnancy products, which accounted for approximately 8% to 10%
of the Company's gross sales in 1995. A finding that the Company's products
infringe this patent could have a material adverse effect on the Company's
operating results. The Company believes that the validity and scope of such
patent will not be upheld and, accordingly, has taken no action to modify its
products.
DEPENDENCE ON THIRD PARTY REIMBURSEMENT AND UNCERTAINTY OF HEALTH CARE REFORM
The Company's ability to successfully commercialize its products may depend
in part on the extent to which reimbursement for the cost of such products and
related treatments will be available from government health administration
authorities, private health coverage insurers and other organizations.
Significant uncertainty exists as to the reimbursement status of newly approved
health care products and no assurance can be given that adequate third party
reimbursement will be available for the Company to maintain price levels or
volume sufficient for the realization of an appropriate return on its
investment in its products. Government and other third party payors are
increasingly attempting to contain health care costs by limiting both coverage
and the level of reimbursement for new therapeutic and diagnostic products
approved for marketing, and by refusing, in some cases, to provide any coverage
for indications for which
8
<PAGE> 11
the FDA and other national health regulatory authorities have not granted
marketing approval. If adequate coverage and reimbursement levels are not
provided by government and third party payors for uses of the Company's
products, the market acceptance of these products would be adversely affected.
Numerous health care reform proposals have been advanced in recent years
that are aimed at changing the health care system in the United States.
Although the Company believes that these proposals may lead to an increased
emphasis on preventative measures and to an expanded market for the Company's
products, third party health care payors may not share this view. The Company
is unable to predict the outcome or the effect of the health care reform debate
on its business and prospects.
DEPENDENCE ON KEY PERSONNEL
Because of the specialized, technical nature of the Company's business, the
Company is highly dependent upon its ability to retain its current personnel
and, in particular, Jack L. Aronowitz. Mr. Aronowitz was the founder of the
Company and is presently the Company's President, Chief Executive Officer and
Chairman of the Board. The Company is the sole beneficiary under a $1.5
million "key man" life insurance policy on the life of Mr. Aronowitz. In
addition, the ability of the Company to effectively pursue its business
strategy will depend upon, among other factors, the successful recruitment and
retention of additional highly skilled and experienced managerial, marketing,
engineering and technical personnel. There can be no assurance that the
Company will be able to retain or recruit such personnel.
DEPENDENCE ON OUTSIDE SUPPLIERS AND MANUFACTURERS
The Company purchases, pursuant to written agreements with its key
suppliers, the materials used to manufacture its products from single suppliers
to obtain the most favorable price and delivery terms. Although the Company
has identified an alternate supply source with respect to each of such
materials, a change in the supplier of these materials without the appropriate
lead time could result in a material delay in the delivery of products to the
Company's customers. There can be no assurance that the Company would not be
subject to less favorable price and delivery terms as a result of changing
suppliers. Reliance on suppliers, as well as industry supply conditions,
generally involves several risks, including the possibility of defective
materials, supply shortages, increase in material costs and reduced control
over delivery schedules, any or all of which could adversely affect the
Company's financial results. In addition, a majority of the Company's products
are produced through a limited number of third party manufacturers. Although
the Company has identified alternate manufacturing sources, a change in
manufacturers without the appropriate lead time could result in a material
delay in the delivery of the Company's products and subject the Company to less
favorable price terms.
PRODUCT LIABILITY EXPOSURE AND INSURANCE
The Company's business exposes it to potential product liability risks
which are inherent in the testing, manufacturing, marketing and sale of medical
diagnostic and pharmaceutical products. To date, the Company has not
experienced any material product liability claims, but any such claims arising
in the future could have a material adverse effect on the Company's business,
financial condition and results of operations. Potential product liability
claims may exceed the amount of the Company's insurance coverage or may be
excluded from coverage under the terms of the policy. There can be no
assurance that the Company's existing insurance can be renewed at a cost and
level of coverage comparable to that presently in effect, if at all. In the
event that the Company is held liable for a claim against which it is not
indemnified, or for damages exceeding the limits of its insurance coverage,
such claim could have a material adverse effect on the Company's business,
financial condition and results of operations.
9
<PAGE> 12
CONTROL BY PRINCIPAL SHAREHOLDER
Jack L. Aronowitz, President, Chief Executive Officer and Chairman of the
Board of the Company, beneficially owns approximately 44.9% of the outstanding
Common Stock. Mr. Aronowitz is in a position to exert substantial influence
over the direction and policies of the Company and the outcome of matters
submitted to a vote of the Company's shareholders, including election of the
Company's directors.
SHARES ELIGIBLE FOR FUTURE SALE
No assurance can be given as to the effect, if any, that future sales of
shares of Common Stock, or the availability of shares of Common Stock for
future sales, will have on the market price of the Common Stock from time to
time. Future sales of shares of Common Stock (including shares issued upon
exercise of warrants or stock options), or the possibility that such sales
could occur, could adversely affect the prevailing market price of the Common
Stock and could also impair the Company's ability to raise capital through an
offering of its equity securities in the future. As of May 1, 1996,
9,717,880 shares of Common Stock are outstanding, of which 4,721,000 shares are
immediately freely tradable without restriction under the Securities Act of
1933, as amended (the "Securities Act"). The remaining 4,996,880 shares, are
"restricted securities" as defined in Rule 144 promulgated under the Securities
Act. Certain shareholders, including "affiliates" of the Company, as the term
is defined under the Securities Act, who together will beneficially own
5,656,062 shares of Common Stock, have agreed not to offer or sell any Common
Stock until October 22, 1996, without the prior written consent of Deutsche
Morgan Grenfell/C. J. Lawrence Inc. In addition, the holder of a promissory
note that is convertible into Common Stock (208,695 shares) has agreed that if
it determines to exercise its conversion right it will not offer or sell any
shares of Common Stock received upon conversion of the note until October 22,
1996, without the prior written consent of Deutsche Morgan Grenfell/C. J.
Lawrence Inc. After such date, these shares may be sold in accordance with
Rule 144 promulgated under the Securities Act, subject to the volume and other
limitations of Rule 144, or pursuant to a registered public offering.
POTENTIAL VOLATILITY OF STOCK PRICE
Future announcements concerning results of preclinical studies and clinical
trials by the Company or its competitors, other evidence of the safety or
efficacy of products of the Company or its competitors, announcements of
technological innovations or new products by the Company or its competitors,
changes in governmental regulations, developments in patent or proprietary
rights of the Company or its competitors, including competitors' litigation,
fluctuations in the Company's operating results and changes in general market
conditions for medical diagnostic or pharmaceutical companies could cause the
market price of the Common Stock to fluctuate substantially for reasons which
may be unrelated to operating results. These fluctuations, as well as general
economic, political and market conditions, may adversely affect the market
price of the Common Stock. Historically, the market price of the Common Stock
has been volatile.
ABSENCE OF DIVIDENDS
The Company does not intend to pay any cash dividends for the foreseeable
future. The Company intends to follow a policy of retaining earnings, if any,
to finance the development and expansion of its businesses.
10
<PAGE> 13
ANTI-TAKEOVER PROVISIONS
In January 1996, the Company's Board of Directors recommended for
approval the adoption of amended and restated Articles of Incorporation and
approved the adoption of amended and restated Bylaws which include certain
anti-takeover provisions that could have the effect of making it more difficult
for a third party to acquire, or of discouraging a third party from acquiring,
a majority of the outstanding voting stock of the Company. In February 1996,
the then majority shareholder approved the Articles of Incorporation, effective
on March 14, 1996. These provisions include a staggered Board of Directors,
certain super majority voting requirements with respect to removal of directors
and amendments of the Articles of Incorporation and Bylaws, requirements
concerning the filling of board vacancies, adoption of Florida's Control Share
Acquisition Act, elimination of shareholder action by written consent, an
increase in the number of authorized shares of Common Stock from 25,000,000 to
100,000,000, creation of a class of "blank check" preferred stock and an
increase in the percentage of shareholder votes required to call a special
meeting of shareholders. See "Description of Securities - Certain
Anti-Takeover Provisions Included in the Company's Articles of Incorporation
and Bylaws" and "Description of Securities - Certain Provisions of Florida
Law."
The Company's Board of Directors and majority shareholder also approved the
adoption of a Shareholder Protection Rights Agreement pursuant to which
preferred stock purchase rights will be distributed to holders of Common Stock
prior to the Offering. These provisions and said agreement are intended to
encourage a person interested in acquiring the Company to negotiate with, and
to obtain the approval of, the Board of Directors in connection with such a
transaction. However, certain of these provisions and said agreement may
discourage a future acquisition of the Company, including an acquisition in
which shareholders might otherwise receive a premium for their shares. As a
result, shareholders who might desire to participate in such a transaction may
not have the opportunity to do so. See "Description of Securities."
INTEGRATION OF PHARMETRIX DIVISION
In November 1995, by acquiring certain assets of Pharma Patch and PP
Holdings, TCPI established its Pharmetrix Division. Through its Pharmetrix
Division, the Company is engaged in the research, development and
commercialization of transdermal and mucosal drug delivery systems and skin
permeation enhancers. There can be no assurance that the Company will be able
to successfully integrate its Pharmetrix Division into its operations or expand
into the transdermal and mucosal drug delivery market. Once integrated, the
Pharmetrix Division may not achieve levels of revenues, profitability or
productivity or otherwise perform as expected. In addition, the acquisition of
the Pharmetrix Division involves a number of special risks including diversion
of management's attention, difficulties in the integration of operations and
retention of personnel, unanticipated problems or legal liabilities, tax and
accounting issues, some or all of which could have a material adverse effect on
the Company's results of operations and financial condition.
USE OF PROCEEDS
This Prospectus relates solely to the Shares being offered and sold for the
account of the Selling Shareholders. The Company will not receive any of the
proceeds from the sale of Shares being offered by the Selling Shareholders but
will pay all expenses related to the registration of the Shares. See "Selling
Shareholders."
11
<PAGE> 14
SELLING SHAREHOLDERS
The following sets forth the aggregate number of shares of Common Stock
beneficially owned by each Selling Shareholder as of June 19, 1996 and the
aggregate number of shares of Common Stock registered hereby that each Selling
Shareholder may offer and sell pursuant to this Prospectus. Of the 1,001,214
Shares offered hereby, 681,214 shares of Common Stock were issued and
outstanding as of June 19, 1996, and an aggregate of 320,000 shares of Common
Stock have been reserved for issuance by the Company to certain of the Selling
Shareholders upon the exercise of outstanding warrants. Because the Selling
Shareholders may sell all or a portion of the Shares at any time and from time
to time after the date hereof, no estimate can be made of the number of shares
of Common Stock that each Selling Shareholder may retain upon the completion of
the Offering. To the knowledge of the Company, none of the Selling
Shareholders has any material relationship with the Company except as set forth
in the footnotes to the following table an more fully described in this
Prospectus (including the information incorporated by reference in this
Prospectus).
<TABLE>
<CAPTION>
Shares Beneficially Shares to be Offered for
Owned Prior to the the Selling
Selling Shareholder Offering Shareholder's Account
------------------- -------- ---------------------
<S> <C> <C>
Pharma Patch Public Limited Company(1) 476,214(2) 476,214(2)
Vista Technologies, Inc.(1)(3) 200,000 200,000
Ira Weingarten(4) 90,000 90,000
Sunshine State Messenger Service, Inc. 15,000 15,000
Seaboard Securities, Inc.(5) 29,090(6) 29,090(6)
Robert Neff(7) 3,788(6) 3,788(6)
Howard Schwartz 5,682(6) 5,682(6)
Steven Finkelstein 5,682(6) 5,682(6)
Fred Luthy(7) 3,788(6) 3,788(6)
Joseph Guccione(7) 3,788(6) 3,788(6)
Julius Goldfinger 10,000(6) 10,000(6)
Victor Minton 10,000(6) 10,000(6)
Robert Lawless(7) 3,364(6) 3,364(6)
Daniel Dymond 3,364(6) 3,364(6)
Stanley Goldaber 24,026(6) 24,026(6)
Shirley Blank 24,026(6) 24,026(6)
Richard Belz 25,528(6) 25,528(6)
Thomas Laundrie 25,528(6) 25,528(6)
Gary Purcell 25,528(6) 25,528(6)
EMH Enterprises 16,818(6) 16,818(6)
</TABLE>
______________________
(1) Murray D. Watson an executive officer of Pharma Patch Public Limited
Company, served as a director of the Company from January 1996 to May 1996.
Mr. Watson does not beneficially own any shares of Common Stock.
(2) Includes 100,000 shares that may be issued upon exercise of a presently
exercisable warrant.
(3) Murray D. Watson is a director of Vista Technologies, Inc.
(4) Ira Weingarten is the owner of Equity Communications, a public relations
firm which promotes the Company's business.
(5) Member of the underwriting syndicate for the Company's initial public
offering
(6) Represents the presently exercisable right to purchase such number of
shares upon exercise of a warrant.
(7) Affiliated with Greenway Capital Corporation, a member of the underwriting
syndicate for the Company's initial public offering.
12
<PAGE> 15
PLAN OF DISTRIBUTION
The Selling Shareholders may sell or distribute some or all of the Shares
from time to time through underwriters or dealers or brokers or other agents or
directly to one or more purchasers, including pledgees, in transactions (which
may involve crosses and block transactions) on Nasdaq, in privately negotiated
transactions (including sales pursuant to pledges) or in the over-the-counter
market, or in a combination of such transactions. Such transactions may be
effected by the Selling Shareholders at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated prices,
or at fixed prices, which may be changed. Brokers, dealers, agents or
underwriters participating in such transactions as agent may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholder (and, if they act as agent for the purchaser of such
shares, from such purchaser). Such discounts, concessions or commissions as a
particular broker, dealer, agent or underwrite might be in excess of those
customary in the type of transaction involved.
The Selling Shareholders and any such underwriters, broker, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities
Act. Neither the Company nor the Selling Shareholders can presently estimate
the amount of such compensation. The Company knows of no existing arrangements
between any Selling Shareholder and any other Selling Shareholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Shares may not simultaneously engage in
market activities with respect to the Common Stock for a period of nine
business days prior to the commencement of such distribution. In addition, and
without limiting the foregoing, the Selling Shareholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rules 10b-5, 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of any of the Shares by
the Selling Shareholders. All of the foregoing may affect the marketability of
the Common Stock.
The Company will pay substantially all of the expenses incident to this
Offering of the Shares by the Selling Shareholders to the public other than
commissions and discounts of underwriters, brokers, dealers or agents. Each
Selling Shareholder may indemnify any broker, dealer, agent or underwriter that
participates in transactions involving sales of the Shares against certain
liabilities, including liabilities arising under the Securities Act.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states, the Common Stock may not
be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
13
<PAGE> 16
DESCRIPTION OF SECURITIES
GENERAL
The Articles of Incorporation authorizes capital stock consisting of
100,000,000 shares of Common Stock, par value of $.001 per share and 25,000,000
shares of Preferred Stock, par value $.001 per share. As of June 19, 1996,
9,803,880 shares of Common Stock and no shares of Preferred Stock were
outstanding. An additional 921,000 shares of Common Stock may be issued upon
the exercise of outstanding options and/or warrants. The following summary of
the description of the capital stock of the Company is qualified in its
entirety by reference to the Articles of Incorporation and Bylaws of the
Company, copies of which have been incorporated by reference into the
Registration Statement of which this Prospectus is a part.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share held.
Shareholders do not have the right to cumulate their votes in elections of
directors. Accordingly, holders of a majority of the issued and outstanding
shares of Common Stock will have the right to elect all the Company's directors
and otherwise control the affairs of the Company.
Holders of Common Stock are entitled to dividends on a pro rata basis upon
declaration of dividends by the Board of Directors. Dividends are payable only
out of funds legally available for the payment of dividends. The Board of
Directors is not required to declare dividends, and it currently expects to
retain earnings to finance the development of the Company's business.
Upon a liquidation of the Company, holders of the Common Stock will be
entitled to a pro rata distribution of the assets of the Company, after payment
of all amounts owed to the Company's creditors, and subject to any preferential
amount payable to holders of Preferred Stock of the Company, if any. Holders
of Common Stock have no preemptive, subscription, conversion, redemption or
sinking fund rights.
PREFERRED STOCK
The Articles of Incorporation permit the Company's Board of Directors to
issue shares of Preferred Stock in one or more series and to fix the relative
rights, preferences and limitations of each series. Among such rights,
preferences and limitations are dividend rates, provisions of redemption,
rights upon liquidation, conversion privileges and voting powers. Should the
Board of Directors elect to exercise this authority, the rights and privileges
of holders of Common Stock could be made subject to the rights and privileges
of any such series of Preferred Stock. The Board of Directors of the Company
currently has no plans to issue any shares of Preferred Stock. The issuance of
Preferred Stock could have the effect of making it more difficult for a third
party to acquire, or discouraging a third party from acquiring, a majority of
the outstanding voting stock of the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS INCLUDED IN THE COMPANY'S ARTICLES OF
INCORPORATION AND BYLAWS
The Articles of Incorporation provide for a classified Board of Directors.
The directors are divided into three classes, as nearly equal in number as
possible. The directors will be elected for three-year terms, which are
staggered so that the terms of approximately one-third of the directors expire
each year. The Articles of Incorporation permit removal of directors only for
cause by the shareholders of the Company at a meeting by the affirmative vote
of at least 60% of the outstanding shares entitled to vote for the
14
<PAGE> 17
election of directors (the "Voting Stock"). The Articles of Incorporation
provide that any vacancy on the Board of Directors may be filled only by the
remaining directors then in office.
The Articles of Incorporation also contain provisions which require: (i)
the affirmative vote of 60% of the Voting Stock to amend the Articles of
Incorporation or Bylaws of the Company; and (ii) the demand of not less than
50% of all votes entitled to be cast on any issue to be considered at a
proposed special meeting to call a special meeting of shareholders. In
addition, the Articles of Incorporation require that all shareholder action,
including the election of directors, be taken by means of a vote at a duly
convened shareholders meeting and not by use of written consents.
The Bylaws establish an advance notice procedure for the nomination of
candidates for election as directors by shareholders as well as for shareholder
proposals to be considered at shareholders' meetings.
The above-described provisions may have certain anti-takeover effects.
Such provisions, in addition to the provisions described below, may make it
more difficult for persons, without the approval of the Company's Board of
Directors, to make a tender offer or acquire substantial amounts of the Common
Stock or launch other takeover attempts that a shareholder might consider in
such shareholder's best interests, including attempts that might result in the
payment of a premium over the market price for the Common Stock held by such
shareholder.
CERTAIN PROVISIONS OF FLORIDA LAW
The Company is subject to certain anti-takeover provisions under Florida
law that apply to a public corporation organized under Florida law including
the Florida Control Share Acquisition Act (the "Control Share Act"). The
Control Share Act prohibits the voting of shares in a publicly-held Florida
corporation that are acquired in a "control share acquisition" unless the
holders of a majority of the corporation's voting shares (exclusive of shares
held by officers of the corporation, inside directors or the acquiring party)
approve the granting of voting rights as to the shares acquired in the control
share acquisition or unless the acquisition is approved by the corporation's
board of directors. A "control share acquisition" is defined as an acquisition
that immediately thereafter entitles the acquiring party to voting power within
each of the following ranges: (i) one-fifth or more but less than one-third of
such voting power; (ii) one-third or more but less than a majority of such
voting power; or (iii) a majority or more of such voting determination of the
exercise price provisions of the Rights Agreement and power.
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
In connection with the approval of the Anti-Takeover Provisions, the
Company's Board of Directors and the then majority shareholder authorized the
adoption of a Shareholder Protection Rights Agreement (the "Rights Agreement").
The Company expects to implement the Rights Agreement after determination of
the exercise price of the rights ("Rights") to be issued thereunder and after
negotiations with the Rights Agent selected by the Company to administer the
Rights Agreement. The Company anticipates that the terms of the Rights
Agreement will be subject to such changes as may result from negotiations
between the Company and the Rights Agent.
The Rights will not prevent a takeover of the Company. However, the Rights
may cause substantial economic and voting dilution to a person or group that
acquires 15% or more of the Common Stock unless the Rights are first terminated
by the Board of Directors. Nevertheless, management believes that the Rights
should not interfere with a transaction that is in the best interests of the
Company and its shareholders because the Rights can be terminated under certain
circumstances by the Board of Directors, before the consummation of such
transaction.
15
<PAGE> 18
TRANSFER AGENT AND REGISTRAR
OTC Corporate Transfer Service Co. has been appointed the transfer agent
and registrar for the Common Stock. Its address is P.O. Box 501, Hicksville,
New York 11802.
LEGAL MATTERS AND EXPERTS
The validity of the Shares offered hereby will be passed upon for the
Company by the law firm of Holland & Knight, One East Broward Boulevard, Suite
1300, Fort Lauderdale, FL 33301.
The consolidated financial statements of Technical Chemicals and Products,
Inc., and subsidiaries appearing in Technical Chemicals and Products, Inc.'s
Annual Report (Form 10-KSB) for its year ended December 31, 1995, have been
audited by Ernst & Young, LLP, independent certified public accountants, as
set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements have been incorporated
herein by reference, in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
The consolidated financial statements of Pharma Patch Plc incorporated by
reference in this Prospectus and in the Registration Statement have been
audited by Ernst & Young, independent chartered accountants as set forth in
their report thereon (which contains an explanatory paragraph with respect to
the substantial doubt which exists concerning Pharma Patch Plc's ability to
continue as a going concern) appearing elsewhere therein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference and made
a part of this Prospectus: (i) the Company's Annual Report for the fiscal
year ended December 31, 1995 on Form 10-KSB/A; (ii) Definitive Information
Statement dated February 16, 1996, filed in connection with the taking of
corporate action without a meeting by written consent; (iii) Definitive Proxy
Statement dated May 28, 1996, filed in connection with the Company's annual
meeting of shareholders; (iv) the Company Quarterly Report on Form 10-QSB for
the quarter ended March 31, 1996; and (v) the description of the Company's
Common Stock contained in its registration statement on Form 8-A, dated January
20, 1995, including any report filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the Offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document or information
incorporated or deemed to be incorporated herein by reference shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed document that also
is, or is deemed to be, incorporated herein by reference, 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 UNDERTAKES TO PROVIDE, WITHOUT CHARGE, TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED,
UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE
DOCUMENTS OR INFORMATION REFERRED TO ABOVE THAT HAS BEEN OR MAY BE INCORPORATED
BY
16
<PAGE> 19
REFERENCE IN THIS PROSPECTUS (EXCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE). REQUESTS SHOULD BE
DIRECTED TO JOHN E. PIPPERT, SENIOR VICE PRESIDENT, MARKETING AND SALES,
TECHNICAL CHEMICALS AND PRODUCTS, INC., 3341 S.W. 15TH STREET, POMPANO BEACH,
FLORIDA 33069, TELEPHONE: (954) 979-0400.
17
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth the estimated expenses and costs payable by the
Company in connection with the filing of this Registration Statement. All
amounts are estimated except for the SEC registration fee.
<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . $ 3,906.00
Legal fees and expenses . . . . . . . . . . . . 15,000.00
Accounting fees and expenses . . . . . . . . . . 15,000.00
Blue Sky fees and expenses . . . . . . . . . . . 2,500.00
Printing and engraving expenses . . . . . . . . 5,000.00
----------
Total . . . . . . . . . . . . . . . . . . . $41,406.00
==========
</TABLE>
- ---------------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporation Act ("FBCA") and the Company's Articles of
Incorporation provide that in certain cases, each officer and director of the
Company shall be indemnified by the Company against certain costs, expenses and
liabilities which he or she may incur in his or her capacity as such.
The Company's Articles provide:
To the fullest extent permitted by the Florida Business Corporation Act,
the Corporation shall indemnify, or advance expenses to, any person made,
or threatened to be made, a party to any action, suit or proceeding by
reason of the fact that such person (i) is or was a director of the
Corporation; (ii) is or was serving at the request of the Corporation as a
director of another corporation; (iii) is or was an officer of the
Corporation, provided that such person is or was at the time a director of
the Corporation; or (iv) is or was serving at the request of the
Corporation as an officer of another corporation, provided that such person
is or was at the time a director of the Corporation or a director of such
other corporation, serving at the request of the Corporation. Unless
otherwise expressly prohibited by the Florida Business Corporation Act, and
except as otherwise provided in the previous sentence, the Board of
Directors of the Corporation shall have the sole and exclusive discretion,
on such terms and conditions as it shall determine, to indemnify, or
advance expenses to, any person made, or threatened to be made, a party to
any action, suit or proceeding by reason of the fact that such person is or
was an officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as an officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
No person falling within the purview of this paragraph may apply for
indemnification or advancement of expenses to any court of competent
jurisdiction.
FBCA 607.0850 "Indemnification of officers, directors, employees and
agents," provides:
(1) A corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of,
the corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise
against liability incurred in connection with such proceeding, including
any appeal thereof, if he acted in good faith and in a manner he reasonably
believed to be in, or not
II-1
<PAGE> 21
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be
in, or not opposed to, the best interests of the corporation or, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or
is a party to any proceeding by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses and amounts paid in settlement not
exceeding, in the judgment of the board of directors, the estimated expense
of litigating the proceeding to conclusion, actually and reasonably
incurred in connection with the defense or settlement of such proceeding,
including any appeal thereof. Such indemnification shall be authorized if
such person acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation, except
that no indemnification shall be made under this subsection in respect of
any claim, issue, or matter as to which such person shall have been
adjudged to be liable unless, and only to the extent that, the court in
which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of
any proceeding referred to in subsection (1) or subsection (2), or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses actually and reasonably incurred by him in connection
therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in subsection (1) or subsection (2). Such determination shall be
made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable, by
majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two
or more directors not at the time parties to the proceeding;
(c) By independent legal counsel;
1. Selected by the board of directors prescribed in paragraph
(a) or the committee prescribed in paragraph (b); or
2. If a quorum of the directors cannot be obtained for
paragraph (1) and the committee cannot be designated under paragraph (b),
selected by majority vote of the full board of directors (in which
directors who are parties may participate); or
II-2
<PAGE> 22
(d) By the shareholders by a majority vote of a quorum consisting
of shareholders who were not parties to such proceeding or, if no such
quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel, persons specified by
paragraph (4)(c) shall evaluate the reasonableness of expenses and may
authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if he is ultimately
found not to be entitled to indemnification by the corporation pursuant to
this section. Expenses incurred by other employees and agents may be paid
in advance upon such terms or conditions that the board of directors deems
appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and a corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office. However, indemnification or advancement of expenses shall not
be made to or on behalf of any director, officer, employee, or agent if a
judgment or other final adjudication establishes that his actions, or
omissions to act, were material to the cause of action so adjudicated and
constitute:
(a) A violation of the criminal law, unless the director, officer,
employee, or agent had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee, or
agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of s. 607.0834 are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in
the right of a shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee,
or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized
or ratified.
(9) Unless the corporation's articles of incorporation provide
otherwise, notwithstanding the failure of a corporation to provide
indemnification, and despite any contrary determination of the board or of
the shareholders in the specific case, a director, officer, employee, or
agent of the corporation who is or was a party to a proceeding may apply
for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to another court of
competent jurisdiction. On receipt of an application, the court, after
giving any notice that it considers necessary, may order indemnification
and advancement of expenses, including expenses incurred in seeking
court-ordered indemnification or advancement of expenses, if it determines
that:
II-3
<PAGE> 23
(a) The director, officer, employee, or agent is entitled to
mandatory indemnification under subsection (3), in which case the court
shall also order the corporation to pay the director reasonable expenses
incurred in obtaining court-ordered indemnification or advancement of
expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the
exercise by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or both,
in view of all the relevant circumstances, regardless of whether such
person met the standard of conduct set forth in subsection (1), subsection
(2), or subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any person who is or was a director, officer, employee, or
agent of a constituent corporation, or is or was serving at the request of
a constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other
enterprise, is in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(11) For purposes of this section;
(a) The term "other enterprises" includes employee benefit plans;
(b) The term "expenses" includes counsel fees, including those for
appeal;
(c) The term "liability" includes obligations to pay a judgment,
settlement, penalty, fine (including an excise tax assessed with respect to
any employee benefit plan), and expenses actually and reasonably incurred
with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit, or other type of proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation" includes
any service as a director, officer, employee, or agent of the corporation
that imposes duties on such persons, including duties relating to an
employee benefit plan and its participants or beneficiaries; and
(g) The term "not opposed to the best interest of the corporation"
describes the actions of a person who acts in good faith and in a manner he
reasonably believes to be in the best interests of the participants and
beneficiaries of an employee benefit plan.
(12) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or
agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity
or arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the provisions
of this section.
II-4
<PAGE> 24
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
<S> <C>
**3.1 Amended and Restated Articles of Incorporation of the Company
**3.2 Amended and Restated Bylaws of the Company
4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated Articles of
Incorporation and the Amended and Restated Bylaws of the Company defining the rights of
holders of Common Stock of the Company
*5.1 Opinion of Holland & Knight
*23.1 Consent of Ernst & Young LLP (Financial Statements of Technical Chemicals and Products,
Inc.)
*23.2 Consent of Ernst & Young (Financial Statements of Pharma Patch Public Limited Company)
*23.3 Consent of Holland & Knight (Legal Matters - included in Exhibit 5.1)
* Filed herewith.
** Incorporated by reference to the exhibit of same number previously filed with the
Company's Registration Statement on Form S-1 on February 12, 1996 (No. 333-1272).
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
this Registration Statement;
II-5
<PAGE> 25
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective amendment
by these paragraphs is contained in periodic reports filed with or furnished by
the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered herein, 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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
act may be permitted to directors, officers and controlling persons, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
int he Securities 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 its is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
II-6
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment Number 1 to its Registration Statement on Form S-3 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Pompano Beach, Florida on June 19, 1996.
TECHNICAL CHEMICALS AND PRODUCTS, INC.
(Registrant)
By: /s/ JACK L. ARONOWITZ
----------------------------------------
Jack L. Aronowitz, President, Chief
Executive Officer and Chairman of
the Board
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment Number 1 to its Registration Statement on Form S-3 has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JACK L. ARONOWITZ President, Chief Executive June 19, 1996
--------------------------- Officer and Chairman of the
Jack L. Aronowitz Board (Principal Executive
Officer, Principal Financial
Officer and Principal
Accounting Officer)
/s/ MARTIN GURKIN Senior Vice President, Chief June 19, 1996
--------------------------- Operating Officer and
Martin Gurkin Director
Executive Vice President and June __, 1996
--------------------------- Director
Cleve W. Laird
/s/ ELIAS AMADOR Director June 19, 1996
---------------------------
Elias Amador
</TABLE>
II-7
<PAGE> 27
<TABLE>
<S> <C> <C>
/s/ Kathryn R. Harrigan Director June 19, 1996
---------------------------
Kathryn R. Harrigan
</TABLE>
II-8
<PAGE> 28
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
------ ------------------- ----
<S> <C> <C>
5.1 Opinion of Holland & Knight (Filed herewith)
23.1 Consent of Ernst & Young LLP (Financial Statements of Technical
Chemicals and Products, Inc.) (Filed herewith)
23.2 Consent of Ernst & Young (Financial Statements of Pharma Patch Public
Limited Company) (Filed herewith)
</TABLE>
<PAGE> 1
Exhibit 5.1
HOLLAND & KNIGHT
One East Broward Boulevard
Suite 1300
Ft. Lauderdale, FL 33301-4811
(954) 525-1000
June 19, 1996
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Technical Chemicals and Products, Inc. Amendment No. 1 to
Registration Statement on Form S-3 File Number 333-5035
Ladies and Gentlemen:
We have acted as counsel to Technical Chemicals and Products, Inc., a
Florida corporation (the "Company"), in connection with the preparation and
filing by the Company with the Securities and Exchange Commission of Amendment
No. 1 to Registration Statement on Form S-3, file number 333-5035, as amended
(the "Registration Statement") under the Securities Act of 1933, as amended.
The Registration Statement relates to an aggregate of 1,001,214 shares of the
Company's common stock, par value $.001 per share, 681,214 of which are issued
and outstanding (the "Shares") and 320,000 of which (the "Warrant Shares") may
be issued from time to time pursuant to certain outstanding warrants (the
"Warrants").
We have examined such corporate records, documents, instruments and
certificates of the Company and have received such representations of the
officers and directors of the Company and have reviewed such questions of law as
we have deemed necessary, relevant to appropriate to enable us to render the
opinion expressed herein. In such examination, we have assumed the genuineness
of all signatures and authenticity of all documents, instruments, records and
certificates submitted to us as originals.
Based upon such examination and review and upon the representations made
to us by officers and directors of the Company, we are of the opinion that the
(i) Shares have been duly and validly authorized and are validly issued, fully
paid and non-assessable, and (ii) the Warrant Shares have been duly and validly
authorized and, assuming that the Warrant Shares are issued for an amount at
least equal to their par value, will, upon issuance pursuant to the terms and
conditions of the Warrants, be fully paid and nonassessable.
<PAGE> 2
Securities and Exchange Commission
June 19, 1996
Page 2
The opinions expressed herein are limited to the corporate laws of the
State of Florida and we express no opinion as to the effect on the matters
covered by any other jurisdiction.
This firm consents to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to the firm under the caption "Legal
Matters and Experts" in the prospectus which is part of the Registration
Statement.
Very truly yours,
HOLLAND & KNIGHT
/s/ Holland & Knight
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
WE CONSENT TO THE REFERENCE TO OUR FIRM UNDER THE CAPTION "EXPERTS" IN THE
REGISTRATION STATEMENT (FORM S-3) AND RELATED PROSPECTUS OF TECHNICAL CHEMICALS
AND PRODUCTS, INC. FOR THE REGISTRATION OF 1,001,214 SHARES OF ITS COMMON STOCK
AND TO THE INCORPORATION BY REFERENCE THEREIN OF OUR REPORT DATED FEBRUARY 9,
1996, WITH RESPECT TO THE CONSOLIDATED FINANCIAL STATEMENTS OF TECHNICAL
CHEMICALS AND PRODUCTS, INC. INCLUDED IN ITS ANNUAL REPORT (FORM 10-KSB) FOR THE
YEAR ENDED DECEMBER 31, 1995, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
WEST PALM BEACH, FLORIDA
MAY 28, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN THE REGISTRATION STATEMENT ON
FORM S-3 PERTAINING TO THE REGISTRATION OF 1,001,214 COMMON SHARES OF OUR
REPORT DATED MAY 25, 1995 WITH RESPECT TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF PHARMA PATCH PLC AS OF FEBRUARY 28, 1995 AND 1994 AND FOR THE YEARS ENDED
FEBRUARY 28, 1995, 1994 AND 1993 INCLUDED IN THE TECHNICAL CHEMICALS AND
PRODUCTS, INC. ANNUAL REPORT (FORM 10-KSB) FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
/s/ Ernst & Young
DUBLIN, IRELAND CHARTERED ACCOUNTANTS
JUNE 12, 1996
