Registration Statement
No. 333 - 16409
Rule 424(b)(3)
PROSPECTUS
ICN PHARMACEUTICALS, INC.
2,350,591 SHARES OF COMMON STOCK*
All of the shares of Common Stock, $ .01 par value (the
"Common Stock"), of ICN Pharmaceuticals, Inc., a Delaware
corporation (the "Company" or "ICN"), offered hereby (the
"Shares") are being offered by certain selling security holders
(the "Selling Stockholders") as more fully described herein. The
Company has agreed to bear all expenses (other than underwriting
discounts and selling commissions of any underwriters, brokers,
dealers or agents retained by the Selling Stockholders) in
connection with the registration and sale of the Shares being
offered by the Selling Stockholders. See "Selling Stockholders"
and "Plan of Distribution."
The Shares may be sold from time to time by the Selling
Stockholders. Such sales may be made in the over -- the --
counter market, on the New York Stock Exchange ("NYSE") or other
exchanges (if the Common Stock is listed for trading thereon), or
otherwise at prices and at terms then prevailing, at prices
related to the then current market price or at negotiated prices.
The Shares may be sold by any one or more of the following
methods: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the securities as agent but may
position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer
as principal and resale by such broker or dealer for its account;
(c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (d) privately negotiated
transactions. In addition, any Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Preferred Stock was originally issued to the Selling
Stockholders in a private placement made by the Company under
Rule 4(2) of the Securities Act of 1933, as amended (the
"Securities Act").
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in
the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealers, agents or underwriters and any
profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
The Common Stock is traded on the NYSE under the symbol
"ICN." On February 6, 1997, the closing sale price per share, as
reported by the NYSE, was $23.375.
*The Shares of Common Stock offered hereby includes the
resale of such presently indeterminate number of shares of Common
Stock as shall be issuable upon conversion of, or as dividends
on, the 50,000 shares of the Series B Convertible Preferred Stock
of the Company (the "Series B Preferred Stock") issued in a
private placement in October 1996. The number of shares of
Common Stock issuable in connection therewith and offered for
resale hereby is an estimate based upon the market price of the
Common Stock set forth below and the discount rate that would
apply if all shares of the Series B Preferred Stock were
converted on the date hereof, is subject to adjustment and could
be materially less or more than such estimated amount depending
upon factors which cannot be predicted by the Company at this
time, including, among other factors, the date on which the
Series B Preferred Stock is converted and the future market price
of the Common Stock. If, however, the market price of the Common
Stock and the discount rate that would apply to that market price
upon conversion were used to determine the number of shares
issuable as of the date hereof, the Company would be obligated to
issue a total of approximately 2,350,591 shares of Common Stock
if all 50,000 shares of Series B Preferred Stock were converted
on such date. The terms of the Series B Preferred Stock limit
the amount thereof that may be converted by the holders during
the first year after issuance, except in certain limited
circumstances. This presentation is not intended to constitute a
prediction as to the future market price of the Common Stock or
as to the number of shares of Common Stock that may be issued
upon conversion of or as dividends on the Series B Preferred
Stock. See "Risk Factors -- Effect of Conversion of Series B
Preferred Stock" and "Description of Series B Preferred Stock."
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS."
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.
The Date of this Prospectus is February 6, 1997.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company may be inspected and
copies obtained (at prescribed rates) at the public reference
facilities maintained by the Commission in Washington, D.C. at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices in New York at 7 World
Trade Center 13th Floor, New York, New York 10048 and in Chicago
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained (at
prescribed rates), by writing to the Public Reference Section of
the Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material is also available through
the Commission's Web site (http://www.sec.gov). In addition,
such material may also be inspected at the NYSE, 20 Broad Street,
New York, New York 10005, on which the Common Stock is listed.
This Prospectus is part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company with the
Commission under the Securities Act with respect to the Shares.
This Prospectus does not contain all the information set forth or
incorporated by reference in the Registration Statement and the
exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the Commission's rules
and regulations. For further information with respect to the
Company and the Shares offered hereby, reference is made to the
Registration Statement and the exhibits thereto which are on file
at the offices of the Commission and may be obtained upon payment
of the fee prescribed by the Commission as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following reports and documents filed by the Company
with the Commission pursuant to the Exchange Act are incorporated
into this Prospectus by reference as of their respective dates:
1. Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 as amended by Form 10-K/A-
1, dated April 29, 1996.
2. Quarterly Report on Form 10-Q for the three months
ended March 31, 1996.
3. Quarterly Report on Form 10-Q for the six months
ended June 30, 1996.
4. Quarterly Report on Form 10-Q for the nine months
ended September 30,1996.
5. The description of the Common Stock and associated
Preferred Stock Purchase Rights contained in the
Registration Statement on Form 8-A, dated November
10, 1994.
6. Form 8-K dated October 28, 1996.
7. Form 8-K dated December 24, 1996.
All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the effective date of this Registration Statement
and prior to the termination of the offering of the Shares
pursuant to this Prospectus (this "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 reports and documents.
Any statement contained herein or in a report or document
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 report or document that is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The making of a modifying or superseding statement shall not
be deemed an admission for any purpose that the modified or
superseded statement, when made, constituted a misrepresentation,
an untrue statement of a material fact or an omission to state a
material fact that is required to be stated or that is necessary
to make a statement not misleading in light of the circumstances
in which it was made.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, ON THE REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE REPORTS AND DOCUMENTS
INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH
REPORTS AND DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH REPORTS OR DOCUMENTS).
WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO DAVID C.
WATT, EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE
SECRETARY, ICN PHARMACEUTICALS, INC., 3300 HYLAND AVENUE, COSTA
MESA, CALIFORNIA 92626. TELEPHONE INQUIRIES MAY BE DIRECTED TO
DAVID C. WATT AT (714) 545-0100.
THE COMPANY
On November 1, 1994, the stockholders of ICN
Pharmaceuticals, Inc. ("Old ICN"), SPI Pharmaceuticals, Inc.
("SPI"), Viratek, Inc. ("Viratek"), and ICN Biomedicals, Inc.
("Biomedicals") (collectively, the "Predecessor Companies")
approved the combination of the Predecessor Companies ("the
Merger"). On November 10, 1994, SPI, Old ICN and Viratek merged
into ICN Merger Corp., and Biomedicals merged into ICN Subsidiary
Corp., a wholly-owned subsidiary of ICN Merger Corp. In
conjunction with the Merger, ICN Merger Corp. was renamed ICN
Pharmaceuticals, Inc. For accounting purposes, SPI was the
acquiring company and as a result, the Company reports the
historical financial data of SPI in its financial results.
Subsequent to November 1, 1994, the results of the Company
include the combined operations of all Predecessor Companies.
ICN is a multinational research-based pharmaceutical company
that develops, manufactures, distributes and sells
pharmaceutical, nutrition, research and diagnostic products. The
Company pursues a strategy of international expansion which
includes (i) research and development of proprietary products
with the potential to be significant contributors to the
Company's global operations; (ii) penetration of major
pharmaceutical markets by means of targeted acquisitions; and
(iii) expansion in these major markets through the development or
acquisition of pharmaceutical products that meet the particular
needs of each market.
The Company distributes and sells a broad range of
prescription and over-the-counter pharmaceutical and nutritional
products in over 60 countries worldwide, primarily in North
America, Latin America, Western Europe and Eastern Europe. These
pharmaceutical products treat viral and bacterial infections,
diseases of the skin, myasthenia gravis, cancer, cardiovascular
disease, diabetes and psychiatric disorders. The Company's
leading product is the broad spectrum antiviral agent ribavirin,
which is marketed in the United States, Canada and most of Europe
under the trade name Virazole[REGISTERED TRADEMARK].
Virazole[REGISTERED TRADEMARK] is currently approved for
commercial sale in over 40 countries for one or more of a variety
of viral infections, including respiratory syncytial virus
("RSV"), herpes simplex, influenza, chicken pox, hepatitis and
HIV. In the United States, Virazole[REGISTERED TRADEMARK] is
approved only for use in hospitalized infants and young children
with severe lower respiratory infections due to RSV.
The Company believes it has substantial opportunities to
realize growth from its internally developed compounds. These
compounds are the result of significant investments in its
research and development activities related to nucleic acids
conducted over three decades. The Company believes that the
approval of Virazole[REGISTERED TRADEMARK] for the treatment of
chronic hepatitis C would be important to the Company because of
the potential size of the chronic hepatitis C market both in the
United States and abroad. On June 1, 1994, a New Drug
Application ("NDA") was filed with the United States Food and
Drug Administration (the "FDA") for the use of
Virazole[REGISTERED TRADEMARK] for the treatment of chronic
hepatitis C in the United States. Similar applications for
approval to market Virazole[REGISTERED TRADEMARK] for chronic
hepatitis C were filed in the European Union, Canada, Sweden,
Norway, Finland, Australia and New Zealand. Following the
submission of the NDA, the FDA raised serious questions regarding
the safety and efficacy of Virazole[REGISTERED TRADEMARK].
Similar questions were raised by foreign reviewers.
Subsequently, the Company withdrew its NDA for
Virazole[REGISTERED TRADEMARK] and the applications for
Virazole[REGISTERED TRADEMARK] submitted in other world markets.
On July 28, 1995, the Company entered into an agreement
(described below) with a subsidiary of Schering-Plough
Corporation (collectively with such subsidiary, "Schering") to
license ribavirin (Virazole[REGISTERED TRADEMARK]) as a treatment
for chronic hepatitis C in combination with Schering's alpha
interferon (the "Combination Therapy"). The FDA subsequently
approved a protocol for the testing of the Combination Therapy,
and Schering is currently conducting Phase III clinical trials of
the Combination Therapy. To obtain FDA approval of
Virazole[REGISTERED TRADEMARK] for use in Combination Therapy,
the Company and Schering must demonstrate that the Combination
Therapy is safer and more effective in treating chronic hepatitis
C than alpha interferon alone. Schering is also testing the
Combination Therapy pursuant to protocols approved by the
European Union. The Company continues to believe that
Virazole[REGISTERED TRADEMARK] has potential in the treatment of
hepatitis C in Combination Therapy and is taking steps to
capitalize on its full potential. See "Risk Factors--No
Assurance of Successful Development and Commercialization of
Future Products."
Pursuant to an Exclusive License and Supply Agreement (the
"License Agreement") with Schering, the Company licensed
ribavirin to Schering for use in Combination Therapy. The
License Agreement provided the Company an initial non-refundable
payment by Schering of $23,000,000, and future royalty payments
to the Company for marketing of ribavirin, including certain
minimum royalty rates. Schering will have exclusive marketing
rights for ribavirin for hepatitis C worldwide, except that the
Company will retain the right to co-market the drug in the
countries of the European Union. In addition, Schering will
purchase up to $42,000,000 in Common Stock upon the achievement
of certain regulatory milestones. Under the License Agreement,
Schering will be responsible for all clinical developments
worldwide.
The Company believes it is positioned to expand its presence
in the pharmaceutical markets in Eastern Europe. In 1991, a 75%
interest was acquired in Galenika Pharmaceuticals, a large drug
manufacturer and distributor in Yugoslavia. Galenika
Pharmaceuticals was subsequently renamed ICN Galenika
("Galenika"). This acquisition added new products and
significantly expanded the sales volume of the Company. With the
investment in Galenika Pharmaceuticals, the Company became one of
the first Western pharmaceutical companies to establish a direct
investment in Eastern Europe. Galenika continues to be a
significant part of the Company's operations although its sales
and profitability have, at times, been substantially diminished
owing principally to the imposition of sanctions on Yugoslavia by
the United Nations. However, the United Nations Security Council
adopted resolutions that, in December 1995, suspended and, in
October 1996, lifted economic sanctions imposed on the Federal
Republic of Yugoslavia since May of 1992. The suspension and
lifting of economic sanctions has enabled Galenika to resume
exporting certain of its product lines to Russia, other Eastern
Europe Markets, Africa, the Middle East and the Far East.
Additionally, during 1995 and 1996, in pursuing its Eastern
Europe expansion strategy, the Company made several additional
investments in companies based in the region. See "Risk Factors--
Risk of Operations in Eastern Europe, Russia and China."
In addition to its pharmaceutical operations, the Company
also develops, manufacturers and sells a broad range of research
chemical products, diagnostic reagents and radiation monitoring
services. The Company markets these products internationally to
major scientific, academic, health care and governmental
institutions through catalog and direct mail marketing programs.
The principal executive offices of the Company are located
at 3300 Hyland Avenue, Costa Mesa, California 92626. The
telephone number at such address is (714) 545-0100.
RISK FACTORS
An investment in the Shares involves a high degree of risk
and may not be appropriate for investors who cannot afford to
lose their entire investment. Prospective purchasers of the
Shares should be fully aware of the risk factors set forth
herein. This Prospectus contains or incorporates statements that
constitute forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Those
statements appear in a number of places in this Prospectus and in
the documents incorporated by reference and include statements
regarding, among other matters, the Company's growth
opportunities, the Company's acquisition strategy, regulatory
matters pertaining to governmental approval of the marketing or
manufacturing of certain of the Company's products and other
factors affecting the Company's financial condition or results of
operations. Prospective investors are cautioned that any such
forward looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors
which may cause actual results, performance or achievements to
differ materially from the future results, performance or
achievements expressed or implied in such forward looking known
and unknown statements. Such factors include the various risk
factors described below.
DEPENDENCE ON FOREIGN OPERATIONS
Approximately 75% and 78% of the Company's net sales for
1995 and the nine months ended September 30, 1996, respectively,
were generated from operations outside the United States. The
Company operates directly and through distributors in North
America, Latin America (principally Mexico), Western Europe and
Eastern Europe and through distributors elsewhere in the world.
Foreign operations are subject to certain risks inherent in
conducting business abroad, including possible nationalization or
expropriation, price and exchange controls, limitations on
foreign participation in local enterprises, health-care
regulation and other restrictive governmental actions. Changes
in the relative values of currencies take place from time to time
and may materially affect the Company's results of operations.
Their effects on the Company's future operations are not
predictable.
RISK OF OPERATIONS IN YUGOSLAVIA
Galenika represents a material part of the Company's
business. Approximately 46% and 45% of the Company's net sales
for 1995 and the nine months ended September 30, 1996,
respectively, were from Galenika. In addition, approximately 39%
and 57% of the Company's operating income for 1995 and the nine
months ended September 30, 1996, respectively, were from
Galenika. The current political and economic circumstances in
Yugoslavia create certain business risks particular to that
country. Between May 1992 and December 1995, Yugoslavia operated
under sanctions imposed by the United Nations which had severely
limited the ability to import raw materials for manufacturing and
had prohibited all exports. While the sanctions were suspended
in December 1995 and lifted in October 1996, certain risks such
as hyperinflation, currency devaluations, wage and price controls
and potential government action could continue to have a material
adverse effect on the Company's results of operations.
Galenika operates in a highly inflationary economy and uses
the dollar as the functional currency rather than the Yugoslavian
dinar. Before the enactment of an economic stabilization program
in January 1994, the rate of inflation in Yugoslavia was over 1
billion percent per year. The rate of inflation was dramatically
reduced when, on January 24, 1994, the Yugoslavian government
enacted a "Stabilization Program" designed to strengthen its
currency. Throughout 1994, this program was successful in
reducing inflation to approximately 5% per year, increasing the
availability of hard currency, stabilizing the exchange rate of
the dinar, and improving the overall economy in Yugoslavia.
Throughout 1995, the effectiveness of the stabilization
program weakened and Galenika began experiencing a decline in the
availability of hard currency in Yugoslavia. Additionally,
inflation levels accelerated to an approximate annual rate of 90%
by the end of the year and on November 24, 1995, the dinar
devalued from a rate of 1.4 dinars per U.S. $1 to a rate of 4.7
dinars per U.S. $1.
During the first nine months of 1996, the trend toward a
weakening economy continued. The rate of inflation increased to
an approximate annual rate of 120% and the availability of hard
currency declined along with shortages of local currency. The
suspension of United Nations sanctions at the beginning of the
year provides economic opportunities for Yugoslavia; however, the
realization of the benefits from the suspension will be dependent
on the implementation of economic reform in Yugoslavia that
includes increased privatization. Galenika maintains an
approximate 50% market share of the pharmaceutical business in
Yugoslavia. With 81% of Galenika sales arising from government
or government-sponsored entities, Galenika is economically
dependent on the Yugoslavian government. Additionally, Galenika
is subject to credit risk in that 56% of its September 30, 1996,
domestic accounts receivables and 67% of its year-to-date sales
are with three major customers.
The future profitability of Galenika is heavily dependent
upon the overall business climate in Yugoslavia, the political
stability of the Yugoslavian government and the ability of the
government to fund health care spending.
The net monetary asset position of Galenika has risen to
$103,000,000 as of September 30, 1996 from $7,396,000 at December
31, 1995. This net monetary asset position would be subject to
foreign exchange losses if a devaluation of the dinar were to
occur. The increase in the net monetary asset position is
primarily attributed to increases in accounts receivable
resulting from increased sales and the lengthening of the
collection period resulting from the lack of availability of
dinars in Yugoslavia. Additionally, the amount of net monetary
exposure at December 31, 1995 reflects the impact of a November
24, 1995 devaluation and the Company's efforts to minimize its
monetary exposure preceding the November 1995 devaluation.
The potential loss arising from a devaluation will depend on
the size of the devaluation and the amount of the net monetary
asset position at the time of the devaluation. A devaluation
could result in a material adverse charge to the results of
operations of the Company.
The timing and the size of a devaluation are strongly
influenced by the amount of inflation and length of time from the
last devaluation. Since the last devaluation of November 24,
1995, the overall level of inflation has been at an annual rate
of 120%. As time and inflation continue, the risk of devaluation
increases. The Company is unable to predict when a devaluation
will occur.
Galenika is subject to price controls in Yugoslavia. The
size and frequency of government-approved price increases are
influenced by local inflation, devaluations, cost of imported raw
materials and demand for Galenika products. During 1995 and
through September 30, 1996, Galenika received fewer price
increases than in the past due to lower relative levels of
inflation. As inflation increases, the size and frequency of
price controls are expected to increase. Price increases
obtained by Galenika are based on economic events preceding such
an increase and not on expectations of ongoing inflation. A lag
in approved price increases could reduce the gross margins that
Galenika receives on its products. Although the Company expects
that Galenika will limit sales of products that have poor margins
until an acceptable price increase is received, the impact of an
inability to obtain adequate price increases in the future could
have an adverse impact on the Company as a result of declining
gross profit margins or declining sales in an effort to maintain
existing gross margin levels.
RISK OF OPERATIONS IN EASTERN EUROPE, RUSSIA AND CHINA
The Company has an approximately $17 million investment in
Russia through its 90% interest in the Russian pharmaceutical
company Oktyabr, which investment was initially made in 1995. In
May 1996, the Company purchased a 40% investment in a U.S.
company which has a 51% interest in a joint venture with a joint
stock company in Kazakhstan to convert a former Soviet scientific
production complex in Kazakhstan into a pharmaceutical
manufacturing and distribution plant. It is anticipated that the
Company's investment in the joint venture, including its
investment in the U.S. company, will be approximately $3 million.
In June 1996, the Company acquired an approximately 88% interest
in Lekstredstva, a Russian pharmaceutical company, and intends to
make additional purchases from existing Lekstredstva stockholders
to increase its interest to 95%. It is estimated that the
aggregate investment in Lekstredstva will cost approximately $6.3
million. From July 1996 through the date of this Prospectus, the
Company acquired a 65% interest in Polypharm, a Russian
pharmaceutical company, for approximately $1.3 million. In
October 1996, the Company acquired a 50.02% interest in Alkaloida
Chemical Co. ("Alkaloida"), a Hungarian state-owned
pharmaceutical company. As required under the terms of the
acquisition agreement, the Company made initial payments of
approximately $9.1 million for this interest, with an additional
payment of up to approximately $12.3 million (including
approximately $624,000 which will be used to offer to repurchase
shares from employees of Alkaloida) due in January 1997, at which
time the Company will receive an additional 10.79% interest in
Alkaloida (13.24% assuming full acceptance of the offer to
repurchase shares from Alkaloida employees). In September 1996,
a subsidiary of the Company entered into a joint venture
agreement with Jiangsu Wuxi Pharmaceutical Corporation ("Wuxi"),
a Chinese state-owned pharmaceutical corporation to establish a
limited liability company, which will require a $24 million
investment by the Company over three years. The Company is also
considering several other strategic acquisitions and investments
in Eastern Europe. Although the Company believes that investment
in Russia, Eastern Europe and China offers access to growing
markets, the economic, political and regulatory conditions in
such countries are unstable, which could have a signficant
adverse effect upon the business and operations of the Company.
NO ASSURANCE OF SUCCESSFUL DEVELOPMENT AND COMMERCIALIZATION
OF FUTURE PRODUCTS
The Company's future growth will depend, in large part, upon
its ability to develop or obtain and commercialize new products
and new formulations of or indications for current products. The
Company is engaged in an active research and development program
involving compounds owned by the Company or licensed from others
which the Company may, in the future, desire to develop
commercially. There can be no assurance that the Company will be
able to develop or acquire new products, obtain regulatory
approvals to use such products for proposed or new clinical
indications in a timely manner, manufacture its potential
products in commercial volumes or gain market acceptance for such
products. In addition, the Company may require financing over
the next several years to fund costs of development and
acquisitions of new products and, if Virazole[REGISTERED
TRADEMARK] is approved for treatment of chronic hepatitis C in
Combination Therapy (for which there can be no assurance), to
expand the production and marketing of Virazole[REGISTERED
TRADEMARK] in the countries of the European Union, where the
Company has retained marketing rights under the License
Agreement. It may be desirable or necessary for the Company to
enter into licensing arrangements with other pharmaceutical
companies in order to market effectively any new products or new
indications for existing products such as the License Agreement
with Schering for the marketing of Virazole[REGISTERED TRADEMARK]
for Combination Therapy (if approved). There can be no assurance
that the Company will be successful in raising such additional
capital or entering into such marketing arrangements, if
required, or that such capital will be raised, or such marketing
arrangements will be, on terms favorable to the Company.
LIMITED PATENT PROTECTION
The Company may be dependent on the protection afforded by
its patents relating to Virazole[REGISTERED TRADEMARK] and no
assurance can be given as to the breadth or degree of protection
which these patents will afford the Company. The Company has
patent rights in the United States expiring in 1999 relating to
the use of Virazole[REGISTERED TRADEMARK] to treat specified
human viral diseases. If future development of
Virazole[REGISTERED TRADEMARK] in Combination Therapy is
successful and approval is granted in the United States, an
additional award of exclusivity will be granted of up to three
years from date of approval (Waxman-Hatch Act); however, there
can be no assurance that such development will be successful or
that such approval will be obtained. While the Company has
patents in certain foreign countries covering the use of
Virazole[REGISTERED TRADEMARK] in the treatment of certain
diseases, which coverage and expiration varies and which patents
expire at various times through 2006, the Company has no, or
limited, patent rights with respect to Virazole[REGISTERED
TRADEMARK] and/or its use in certain foreign countries where
Virazole[REGISTERED TRADEMARK] is currently, or in the future may
be, approved for commercial sale, including France, Germany and
Great Britain. However, the Company and Schering intend to file
applications for approval of Combination Therapy through a
centralized procedure in the European Union (which includes
France, Germany and Great Britain). If such approval is granted
(of which approval no assurance can be given), the Company and
Schering would be afforded either six or ten years (depending
upon the particular country) of protection for the Combination
Therapy against competition. There can be no assurance that the
loss of the Company's patent rights with respect to
Virazole[REGISTERED TRADEMARK] upon expiration of the Company's
patent rights in the United States, Europe and elsewhere will not
result in competition from other drug manufacturers or will not
otherwise have a significant adverse effect upon the business and
operations of the Company.
As a general policy, the Company expects to seek patents,
where available, on inventions concerning novel drugs,
techniques, processes or other products which it may develop or
acquire in the future. However, there can be no assurance that
any patents applied for will be granted, or that, if granted,
they will have commercial value or as to the breadth or the
degree of protection which these patents, if issued, will afford
the Company. The Company intends to rely substantially on its
unpatented proprietary know-how, but there can be no assurance
that others will not develop substantially equivalent proprietary
information or otherwise obtain access to the Company's know-how.
Patents for pharmaceutical compounds are not available in certain
countries in which the Company markets its products.
Marketing approvals in certain foreign countries provide an
additional level of protection for products approved for sale in
such countries.
UNCERTAIN IMPACT OF ACQUISITION PLANS
The Company intends aggressively to continue its strategy of
targeted expansion through the acquisition of compatible
businesses and product lines and the formation of strategic
alliances, joint ventures and other business combinations.
Should the Company complete any material acquisition, the
Company's success or failure in integrating the operations of the
acquired company may have a material impact on the future growth
or success of the Company. Since some or all of these potential
acquisitions may be affected with the issuance of Common Stock by
the Company to the sellers of the businesses being acquired or
financed with the issuance of Common Stock or securities
convertible into Common Stock, the interest of existing
stockholders in the Company may be diluted (which dilution may be
material depending on the size and the number of acquisitions
consummated). Subject to sufficient authorized and unissued
shares of Common Stock being available, no stockholder approval
of any acquisition transaction would be required unless the
number of shares of Common Stock issued by the Company in
connection with the transaction (or series of related
transactions) were to exceed 20% of the then outstanding shares
of Common Stock.
POTENTIAL LITIGATION EXPOSURE
ICN is a defendant in various lawsuits including certain
consolidated class action lawsuits alleging, among other things,
violations of federal securities laws. The plaintiffs in these
lawsuits allege that ICN made, or aided and abetted other
defendants in making, misrepresentations of material facts and
omitted to state material facts concerning the business,
financial condition and future prospects of the Company,
primarily concerning developments regarding Virazole[REGISTERED
TRADEMARK], including statements made in the 1980's concerning
the efficacy and safety of the drug and the market for the drug
in the treatment of AIDS and AIDS related diseases, and
statements made in 1994 and 1995 concerning the Company's NDA for
the use of Virazole[REGISTERED TRADEMARK] for the treatment of
chronic hepatitis C (the "Hepatitis C NDA"). See "Recent
Developments."
The Commission is conducting a private investigation (the
"Commission Investigation") with respect to certain matters
pertaining to the status and disposition of the Hepatitis C NDA,
including whether, during the period from June 1994 through
February 1995, the Company, persons or entities associated with
it and others (including Mr. Milan Panic, Chairman, President and
Chief Executive Officer of the Company), in the offer and sale or
in connection with the purchase and sale of Common Stock, engaged
in possible violations of federal securities laws, by having
possibly: (i) made false or misleading statements or omitted
material facts with respect to the status and disposition of the
Hepatitis C NDA; (ii) purchased or sold Common Stock while in
possession of material, non-public information concerning the
status and disposition of the Hepatitis C NDA; or (iii) conveyed
material, non-public information concerning the status and
disposition of the Hepatitis C NDA, to other persons who may have
purchased or sold Common Stock. The Company is cooperating with
the Commission in its investigation.
The Company has received a Subpoena (the "Subpoena") from a
Grand Jury in the United States District Court, Central District
of California requesting the production of documents covering a
broad range of matters over various time periods. The Company
and Milan Panic are subjects of the investigation and are
cooperating with the production of documents pursuant to the
Subpoena.
DEPENDENCE ON KEY PERSONNEL
The Company believes that its continued success will depend
to a significant extent upon the efforts and abilities of its
management, including Milan Panic, its Chairman, President and
Chief Executive Officer. The loss of their services could have a
material adverse effect on the Company. The Company cannot
predict what effect, if any, the Commission's Investigation and
the Subpoena may have on Mr. Panic's ability to continue to
devote services on a full time basis to the Company. See " --
Potential Litigation Exposure" above.
POTENTIAL PRODUCT LIABILITY EXPOSURE AND LACK OF INSURANCE
The Company could be exposed to possible claims for personal
injury resulting from allegedly defective products. Even if a
drug were approved for commercial use by an appropriate
governmental agency, there can be no assurance that users will
not claim that effects other than those intended may result from
the Company's products. The Company generally self-insures
against potential product liability exposure with respect to its
marketed products, including Virazole[REGISTERED TRADEMARK].
While to date no material adverse claim for personal injury
resulting from allegedly defective products, including
Virazole[REGISTERED TRADEMARK], has been successfully maintained
against the Company or any of its predecessors, a substantial
claim, if successful, could have a material adverse effect on the
Company.
GOVERNMENT REGULATION
FDA approval must be obtained in the United States and
approval must be obtained from comparable agencies in other
countries prior to marketing or manufacturing new pharmaceutical
products for use by humans in such respective jurisdictions.
Obtaining FDA approval for new products and manufacturing
processes can take a number of years and involves the expenditure
of substantial resources. Numerous requirements must be
satisfied, including preliminary testing programs on animals and
subsequent clinical testing programs on humans, to establish
product safety and efficacy. No assurance can be given that
authorization of the commercial sale of any new drugs or
compounds by the Company for any application or of existing drugs
or compounds for new applications will be secured in the United
States or any other country, or that, if such authorization is
secured, those drugs or compounds will be commercially
successful.
The FDA in the United States and other regulatory agencies
in other countries also periodically inspect manufacturing
facilities. Failure to comply with applicable regulatory
requirements can result in, among other things, sanctions, fines,
delays or suspensions of approvals, seizures or recalls of
products, operating restrictions and criminal prosecutions.
Furthermore, changes in existing regulations or adoption of new
regulations could prevent or delay the Company from obtaining
future regulatory approvals.
The Company is subject to price control restrictions on its
pharmaceutical products in the majority of countries in which it
operates. To date, the Company has been affected by pricing
adjustments in Spain and by the lag in allowed price increases in
Yugoslavia and Mexico, which have created lower sales in U.S.
dollars and reductions in gross profit. Future sales and gross
profit could be materially affected if the Company is unable to
obtain price increases commensurate with the levels of inflation.
COMPETITION
The Company operates in a highly competitive environment.
The Company's competitors, many of whom have substantially
greater capital resources and marketing capabilities and larger
research and development staffs and facilities than the Company,
are actively engaged in marketing products similar to those of
the Company and in developing new products similar to those
proposed to be developed and sold by the Company. Others may
succeed in developing products that are more effective than those
marketed or proposed for development by the Company. Progress by
other researchers in areas similar to those being explored by the
Company may result in further competitive challenges. In early
1996, MedImmune, Inc. began marketing in the United States
RespiGam[REGISTERED TRADEMARK], a prophylactic drug for the
treatment of RSV. The Company is aware of several other ongoing
research and development programs which are attempting to develop
new prophylactic and therapeutic products for treatment of RSV.
Although the Company will follow publicly disclosed developments
in this field, on the basis of currently available data, it is
unable to evaluate whether RespiGam[REGISTERED TRADEMARK] or the
other technology being developed in these programs poses a threat
to the Company's current market position in the treatment of RSV
or its revenue streams. In addition, a number of companies and
researchers are engaged in developmental efforts for the
treatment of Hepatitis C, including through the use of protease
inhibitors. The Company may also face increased competition from
manufacturers of generic pharmaceutical products when certain of
the patents covering certain of its currently marketed products
expire.
EFFECT OF CONVERSION OF THE SERIES B PREFERRED STOCK;
OUTSTANDING PUT RIGHT
The exact number of shares of Common Stock issuable upon
conversion of all of or as dividends on the Series B Preferred
Stock offered hereby will vary inversely with the market price of
the Common Stock. The holders of Common Stock may be materially
diluted by conversion of the Series B Preferred Stock depending
on the future market price of the Common Stock and the discount
rate applied to determine the number of shares of Common Stock
issuable upon conversion. On February 6, 1997, the last reported
sales price of the Common Stock on the NYSE was $23.375 per
share. If such market price were used to determine the number of
shares of Common Stock issuable upon conversion of the Series B
Preferred Stock and using the discount rate of 9% applicable on
the date hereof, and 13% effective on and after April 9, 1997,
the Company would issue a total of approximately 2,350,591 and
2,458,664 shares of Common Stock, respectively, if all shares of
the Series B Preferred Stock were converted on such date. To the
extent the Current Market Price (as defined herein) is lower or
higher than $23.375 as of any date on which shares of Series B
Preferred Stock are converted, the Company would issue more or
fewer shares of Common Stock than reflected in such estimate, and
such difference could be material. In addition, the discount
rate that applies in calculating the number of shares of Common
Stock issuable upon conversion is subject to further increases
under certain circumstances. Any increases in the discount rate
will result in more shares of Common Stock being issuable upon
conversion. The terms of the Series B Peferred Stock limit the
amount thereof that may be converted by the holders during the
first year after issuance, except in certain limited
circumstances. See "Description of the Series B Preferred
Stock." The Company has granted to certain persons the right to
put 1,064,833 shares of Common Stock to the Company at $30 per
share in January 2000, subject to acceleration under certain
circumstances at a put price equal to $22.50 plus 10% per annum
from December 23, 1996, as described in the Company's Form 8-K
dated December 24, 1996.
USE OF PROCEEDS
Since this Prospectus relates to the offering of Shares by
the Selling Stockholders, the Company will not receive any
proceeds from the sale of the Shares offered hereby. See
"Selling Stockholders."
SELLING STOCKHOLDERS
The registration effected hereby is being effected pursuant
to certain registration rights granted by the Company at the time
of the issuance of the Series B Preferred Stock. The Shares
hereby registered may from time to time be issued to Selling
Stockholders upon conversion of, or as payment of dividends on,
the Preferred Stock.
As of December 31, 1996, the Company had outstanding
approximately 33,635,000 shares of Common Stock.
The following table sets forth certain information regarding
the beneficial ownership of the Shares to be offered hereby as of
January 3, 1997, and as adjusted to reflect the sale of the
securities offered hereby, by the Selling Stockholders. Except
as otherwise indicated, to the knowledge of the Company, all
persons listed below have sole voting and investment power with
respect to their securities. The information in the table
concerning the Selling Stockholders who may offer Shares
hereunder from time to time is based on information provided to
the Company by such securityholders, except for the assumed
conversion ratio of shares of Series B Preferred Stock into
Common Stock, which is based solely on the assumptions discussed
or referenced in footnote (1) to the table. Information
concerning such Selling Stockholders may change from time to time
and may include pledgees of any Shares upon exercise of the
pledge, and any changes of which the Company is advised will be
set forth in a Prospectus Supplement to the extent required. See
"Plan of Distribution."
COMMON
COMMON SHARES SHARES TO
BENEFICIALLY BE SOLD
OWNED PRIOR TO IN THE
THE OFFERING/(1)/ OFFERING
/(2)/
NAME OF SELLING
STOCKHOLDER NUMBER PERCENT NUMBER
Halifax Fund, L.P.
575,577 1.60 305,577
Ramius Fund
Limited 585,869 1.62 141,036
Palladin Partners,
L.P. 205,518 * 70,518
Gershon Partners,
L.P. 68,505 * 23,505
CIBC Wood Gundy
Securities Corp. 235,059 * 235,059
Cerberus Partners,
L.P. 470,118 1.31 470,118
Colonial Penn
Insurance 82,271 * 82,271
Company
Colonial Penn Life
Insurance 82,271 * 82,271
Company
Mackay-Shields
Financial 940,236 2.62 940,236
Corporation (3)
New York Life
Separate Account 47,012 * 47,012
No. 7
Mainstay VP Series
Fund, Inc. (High 70,518 * 70,518
Yield Corporate
Bond Fund
Portfolio)
The Mainstay Funds
(Convertible 423,106 1.18 423,106
Fund Series)
The Mainstay Funds
(High Yield 399,600 1.11 399,600
Corporate Bond
Fund Series)
(1) Such beneficial ownership represents the aggregate of (a)
the number of shares of Common Stock beneficially owned by
each such person and (b) an estimate of the number of shares
of Common Stock issuable upon the conversion of shares of
Series B Preferred Stock beneficially owned by such person,
assuming the last reported sales price of $23.375 per share
of Common Stock on February 6, 1997 and the discount rate of
9% were used to determine the number of shares of Common
Stock issuable as of the date hereof. The actual number of
shares of Common Stock offered hereby is subject to
adjustment and could be materially less or more than the
estimated amount indicated depending upon factors which
cannot be predicted by the Company at this time, including,
among other factors, application of the conversion
provisions based on market prices prevailing and the
applicable discount rate at the actual date of conversion
and whether or to what extent dividends are paid in Common
Stock. This presentation is not intended to constitute a
prediction as to the future market price of Common Stock.
The percentage of Common Shares beneficially owned prior to
the Offering is based on the actual number of shares
outstanding on December 31, 1996 and assumes conversion of
all 50,000 shares of Series B Preferred Stock as described
in this footnote (1). See "Risk Factors -- Effect of
Conversion of Series B Preferred Stock" and "Description of
Series B Preferred Stock."
(2) Represents the estimate of the number of shares of Common
Stock issuable upon conversion of shares of Series B
Preferred Stock beneficially owned by such person as
described in Footnote (1) above.
(3) Mackay-Shields Financial Corporation is a beneficial owner
of these shares by virtue of it having voting power and
investment power with respect to the shares held by the
following selling stockholders: New York Life Separate
Account No. 7, Mainstay VP Series Fund, Inc. (High Yield
Corporate Bond Fund Portfolio), The Mainstay Funds
(Convertible Fund Series) and The Mainstay Funds (High Yield
Corporate Bond Fund Series).
* Represents less than 1% of the outstanding Common Stock.
Because the Selling Stockholders may sell all or part of the
Shares which they hold pursuant to this Prospectus and because
this Offering is not being underwritten on a firm commitment
basis, no estimate can be given as to the amount of Shares that
will be held by the Selling Stockholders upon termination of this
Offering. See "Plan of Distribution."
DESCRIPTION OF SERIES B PREFERRED STOCK
On October 9, 1996, the Company issued 50,000 shares of
Series B Preferred Stock to the initial Selling Stockholders for
aggregate gross proceeds of $50 million.
The Series B Preferred Stock is convertible, at the option
of the holders from time to time (subject to certain limitations
during the first year), into Shares at a conversion price equal
to the average daily low price of the Common Stock (the "Current
Market Price") on the NYSE (so long as the Common Stock is traded
on the NYSE and, if the Common Stock is not so traded, on the
principal national securities market for the Common Stock or on
the National Association of Securities Dealers, Inc., Automated
Quotation System (NASDAQ)) for the five trading days preceding
the applicable conversion date, discounted as follows: 3% during
the first three months after issuance of the Series B Preferred
Stock, 5% during the next three months, and 9% thereafter. If
the Registration Statement is suspended for more than 90 days
during any 360-day period, these discounts are permanently
increased by 1% for each 30-day period over such 90-day period.
The Series B Preferred Stock is automatically converted
into Shares upon the occurrence of certain extraordinary
corporate transactions or at the fifth anniversary of the date of
issuance of the Series B Preferred Stock, subject in the later
case to (i) successive six month extensions if the Current Market
Price is below $20 per share (subject to anti-dilution
adjustments) at any time during the three months prior to such
mandatory conversion date, and (ii) certain specified extensions
if the Registration Statement is suspended.
The Series B Preferred Stock has a cumulative dividend rate
of 6% per annum, payable quarterly, at the option of the Company,
in cash or Shares (based upon the Current Market Price).
At any time when the Current Market Price is below $17.50
per share (subject to anti-dilution adjustment), the Series B
Preferred Stock is redeemable by the Company at 120% of the
liquidation value ($1,000 per share) plus accrued and unpaid
dividends through the date of redemption. If the Registration
Statement is suspended for more than 180 days in any 360-day
period or trading in the Shares is suspended on the principal
market or exchange for the Shares for seven consecutive trading
days or the Common Stock ceases to be listed on an exchange or
the NASDAQ, the Series B Preferred Stock is redeemable at the
option of the holders thereof, by written notice given no later
than 60 days following the end of either suspension period, at
130% of the liquidation value plus accrued and unpaid dividends
to the date of redemption.
The terms of the Series B Preferred Stock contain certain
restrictions on payment of dividends or other distributions on
the capital stock of the Company and the making of certain
advances, loans or capital contributions in or to non-majority
owned entities. The limitation on the payment of dividends does
not limit the Company from making regular quarterly cash
dividends on the Common Stock in an amount up to the greater of
(a) $.40 per share and (b) 1.5% of the then Current Market Price.
The terms of the Series B Preferred Stock also prohibit the
Company from issuing preferred stock ranking senior to the Series
B Preferred Stock upon liquidation or with respect to the payment
of dividends and prohibit issuing any preferred stock ranking on
par with or junior to the Series B Preferred Stock with a
principal payment, interest, maturity date, or mandatory date of
redemption on or or prior to the mandatory conversion date for
the Series B Preferred Stock.
Assuming a Current Market Price of $23.375 (the closing
price of the Common Stock on the NYSE on February 6, 1997) and
assuming the discount rate then in effect is alternatively 9% and
13%, (i) the number of Shares issuable upon conversion of all the
Series B Preferred Stock would be 2,350,591 or 2,458,664 shares,
respectively, and (ii) if the Company elected to issue Shares as
payment for dividends on the Series B Preferred Stock, the
Company would be required to issue an additional 150,000 shares,
respectively, as dividends on the Series B Preferred Stock on an
annual basis.
The description set forth above of the Series B Preferred
Stock is a summary and as such is subject to and qualified in its
entirety by reference to the text of the Certificate of
Designations, Preferences and Rights of the Series B Preferred
Stock, a copy of which is attached as an exhibit to this
Registration Statement and is incorporated herein by reference.
PLAN OF DISTRIBUTION
The Selling Stockholders are offering the Shares for their
own account, and not for the account of the Company. The Company
will not receive any proceeds from the sale of the Shares by the
Selling Stockholders.
The Shares may be sold from time to time by the Selling
Stockholders. Such sales may be made in the over--the--counter
market, on the New York Stock Exchange or other exchanges (if the
Common Stock is listed for trading thereon), or otherwise at
prices and at terms then prevailing, at prices related to the
then current market price or at negotiated prices. The Shares
may be sold by any one or more of the following methods: (a) a
block trade in which the broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
(b) purchases by a broker as principal and resale by such broker
or dealer for its account; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; and
(d) privately negotiated transactions. In addition, any Shares
that qualify for sale pursuant to Rule 144 may be sold under Rule
144 rather than pursuant to this Prospectus.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholder in the
distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealer, agent or underwriter and any
profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
Under the Exchange Act and the regulations thereunder, any
person engaged in a distribution of the Shares offered by this
Prospectus may not simultaneously engage in market making
activities with respect to the Common Stock during any applicable
"cooling off" periods prior to the commencement of such
distribution. In addition, and without limiting the foregoing,
the Selling Stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder
including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of Common
Stock by the Selling Stockholders.
There can be no assurance that the Selling Stockholders will
sell any or all of the Shares hereby registered. To the extent
required, the Company will use its best efforts to file, during
any period in which offers or sales are being made, one or more
supplements to this Prospectus to describe any material
information with respect to the plan of distribution not
previously disclosed in this Prospectus or any material change to
such information in this Prospectus.
The registration effected hereby is being effected pursuant
to certain registration rights previously granted by the Company
to the Selling Stockholders at the time of the issuance of the
Preferred Stock. The Company has agreed to bear all expenses
(other than underwriting discounts and selling commissions of any
underwriters, brokers, sellers or agents retained by the Selling
Stockholders) in connection with the registration and sale of the
Shares being offered by the Selling Stockholders.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed
upon for the Company by David C. Watt, Executive Vice President,
General Counsel and Corporate Secretary of the Company. As of
December 31, 1996, Mr. Watt beneficially owned 100,332 shares of
Common Stock, including 98,337 shares which he has the right to
acquire upon the exercise of currently exercisable stock options.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated balance sheets as of December 31, 1995 and
1994, and the consolidated statements of income, retained
earnings and cash flows for each of the three years in the period
ended December 31, 1995, incorporated by reference in this
Prospectus, have been included herein in reliance on the report,
which includes, as it relates to 1994 and 1993, an emphasis of
matter paragraph related to certain transactions between
affiliates, of Coopers & Lybrand L.L.P., independent public
accountants, given on the authority of that firm as experts in
auditing and accounting. With respect to the unaudited interim
financial information for the periods ended September 30, 1996
and 1995, June 30, 1996 and 1995 and March 31, 1996 and 1995,
incorporated by reference in this Prospectus, the independent
accountants have reported that they have applied limited
procedures in accordance with professional standards for a review
of such information. However, their separate reports included in
the Company's quarterly reports on Form 10-Q for the quarters
ended September 30, 1996, June 30, 1996 and March 31, 1996, and
incorporated by reference herein, state that they did not audit
and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the
limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the
Securities Act for their report on the unaudited interim
financial information because that report is not a "report" or a
"part" of the Registration Statement prepared or certified by the
accountants within the meaning of Sections 7 and 11 of the
Securities Act.
Any financial statements and schedules hereafter
incorporated by reference in the Registration Statement that have
been audited and are the subject of a report by independent
accountants will be so incorporated by reference in reliance upon
such reports and upon the authority of such firms as experts in
accounting and auditing to the extent covered by consents filed
with the Commission.
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
IN CONNECTION WITH THIS OFFERING, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE 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.
