-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SE7x1Up42elx4sAgCfw1oeHgtyZd8Iv48vUsUmCiY/bf80zMefvQNx9HIgh3lFra ZN7rvWuNm9oBf4UFzizaaA== 0001033968-97-000025.txt : 19971107 0001033968-97-000025.hdr.sgml : 19971107 ACCESSION NUMBER: 0001033968-97-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971106 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAULDING INC CENTRAL INDEX KEY: 0000729069 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 042769995 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13588 FILM NUMBER: 97708645 BUSINESS ADDRESS: STREET 1: 200 ELMORA AVE CITY: ELIZABETH STATE: NJ ZIP: 07207 BUSINESS PHONE: 9085279100 MAIL ADDRESS: STREET 1: 200 ELMORA AVENUE STREET 2: 200 ELMORA AVENUE CITY: ELIZABETH STATE: NJ ZIP: 07207 FORMER COMPANY: FORMER CONFORMED NAME: PUREPAC INC/ DATE OF NAME CHANGE: 19940908 FORMER COMPANY: FORMER CONFORMED NAME: MOLECULON INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MOLECULON BIOTECH INC DATE OF NAME CHANGE: 19860417 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended September 30, 1997 OR Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number: 0-13588 FAULDING INC. (Exact name of registrant as specified in its charter) Delaware 04-2769995 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 200 Elmora Avenue Elizabeth, NJ 07207 (Address of principal executive office) Telephone Number (908) 527-9100 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No As of October 30, 1997, there were 20,127,188 shares of the Registrant's Common Stock outstanding. Faulding Inc. INDEX Page No. PART I - FINANCIAL INFORMATION ITEM 1. Consolidated Financial Statements: Consolidated Balance Sheets September 30, 1997 and June 30, 1997 . . . . . . . .3 Consolidated Statements of Operations Three months ended September 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . .4 Consolidated Statements of Cash Flows Three months ended September 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . .5 Notes to Consolidated Financial Statements. . . . . . .6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . .9 PART II - OTHER INFORMATION ITEMS 1 thru 6 . . . . . . . . . . . . . . . . . . . . . . . 11 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 14 Faulding, Inc. CONSOLIDATED BALANCE SHEETS September 30, June 30, 1997 1997 $000 $000 (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents 3,323 3,846 Accounts Receivable 32,264 29,187 Inventory (Note 4) 34,572 31,951 Other current assets 2,360 2,031 Deferred income taxes (Note 6) 4,554 4,427 Total current assets 77,073 71,442 Non-current assets: Property, plant and equipment, net 45,550 44,911 Other assets 3,305 3,410 Total non-current assets 48,855 48,321 Total Assets 125,928 119,763 Liabilities and Stockholders' Equity Current liabilities: Accounts payable 7,147 7,973 Due to affiliated companies 2,587 3,859 Loan payable to bank 7,000 4,000 Accrued expenses 15,447 14,551 Accrued income taxes 2,196 841 Accrued preferred dividents 169 689 Total current liabilities 34,546 31,913 Non-current liabiilities: Deferred income taxes (Note 6) 2,459 2,385 Stockholders' equity (Notes 2 and 5) Class B convertible preferred stock; par value $0.01, authorized 150,000 shares; issued and outstanding 150,000 (liquidation value $15,169) 2 2 Common stock; par value $0.01, authorized 35,000,000 shares; issued and outstanding 20,127,188 and 20,102,188 at September 30, 1997 and June 30, 1997, respectively 201 201 Capital in excess of par value 54,800 54,763 Retained earnings 33,920 30,499 Total stockholders' equity 88,923 85,465 Total Liabilities and Stockholders' Equity 125,928 119,763 The accompanying notes are an integral part of these consolidated financial statements. Faulding, Inc CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended September 30, 1997 1996 (Per share amounts in $) $000 $000 Net Sales 29,184 18,585 Cost of Sales 16,918 13,013 Gross profit 12,266 5,572 Expenses: Selling, general and administrative 3,721 3,031 Research and development 3,008 2,488 Total expenses 6,729 5,519 Income from operations 5,537 53 Other income (expense), net (36) (19) Income before income taxes 5,501 34 Income tax expense (Note 6) 2,080 Net income 3,421 34 Preferred stock dividends 169 689 Net Income (Loss), Applicable to Common Stock 3,252 (655) Primary Earnings Per Common Share (Note 3) Net income (loss) 0.16 (0.04) Weighted average number of common shares outstanding 20,118,302 15,064,560 Earnings Per Share Assuming Full Dilution (Note 3) The accompanying notes are an integral part of these consolidated financial statements. Faulding, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended September 30, 1997 1996 $000 $000 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 3,421 34 Adjustments to Reconcile Net Income to Net Cash Provided By (Used For) Operating Activities: Depreciation and amortization 1,043 942 Compensation expense - stock grants 80 82 Deferred income tax, asset (53) 79 Increase (Decrease) in Cash From: Accounts receivable (3,077) 2,184 Inventory (2,621) (3,767) Other current assets (329) (498) Other assets 29 (23) Accounts payable (826) 722 Accrued expenses 896 (1,114) Accrued income taxes 1,355 (79) Accrued preferred dividends (520) Due to/from affiliates (1,272) 282 Total Adjustments (5,295) (1,190) Net Cash Provided By (Used For) Operating Activities (1,874) (1,156) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment (1,606) (1,628) Net Cash Provided by (Used For) Investing Activities (1,606) (1,628) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings from bank 3,000 4,000 Preferred dividends paid (169) (689) Proceeds from issuance of common stock 126 Net Cash Provided By (Used For) Financing Activities 2,957 3,311 Increase (Decrease) In Cash and Cash Equivalents (523) 527 Cash and cash equivalents, beginning of period 3,846 1,897 Cash and Cash Equivalents, end of period 3,323 2,424 Supplemental disclosure of cash flow information: Cash paid (received) during the period for: Interest 50 28 Income taxes 780 The accompanying notes are an integral part of these consolidated financial statements. Faulding Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Notes to the Financial Statements included in Faulding Inc.'s (the "Company") Form 10-K for the year ended June 30, 1997 contain information pertinent to the accompanying financial statements and should be read in conjunction with reading these financial statements. There has been no material change in the information contained in such footnotes except as set forth below. The Consolidated Balance Sheet at September 30, 1997, the Consolidated Statements of Operations for the three months ended September 30, 1997 and 1996 and the Consolidated Statements of Cash Flows for the three months ended September 30, 1997 and 1996 are unaudited. In the opinion of management, all adjustments (consisting only of normal recurring entries) necessary for a fair presentation of such financial results have been included. 1. Organization, Business and Consolidation Faulding Inc., together with its consolidated subsidiaries, is primarily engaged in the development, manufacture and sale of human generic pharmaceutical products and medical devices. The operating subsidiaries of the Company are Purepac Pharmaceutical Co. ("PPC"), Faulding Pharmaceutical Co. ("FPC"), Faulding Puerto Rico, Inc. ("FPR") and Faulding Medical Device Co. ("FMDC"). The financial statements reflect the accounts of the Company, including its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. 2. A reconciliation of the change in total stockholders' equity is as follows: Par Value of Capital In Total Common and Excess of Retained Stockholders' Preferred Stock Par Value Earnings Equity $000 $000 $000 $000 Balance, June 30, 1997 203 54,763 30,499 85,465 Exercise of stock options 126 126 Class B preferred stock dividend (169) (169) Stock grant amortization 80 80 Net income 3,421 3,421 Balance, September 30, 1997 203 54,800 33,920 88,923 3. Earnings Per Common Share Primary earnings per common share is calculated by dividing income after preferred dividends by the weighted average number of common shares outstanding during the period. Common stock equivalents are excluded as the effect is either not material or anti-dilutive. Earnings per share assuming full dilution is not presented as the effect is either not material or anti- dilutive. 4. Inventory September 30, June 30, 1997 1997 $000 $000 Raw Materials 11,082 10,934 Work-in-process 8,947 7,649 Finished goods 14,543 13,368 Total 34,572 31,951 5. Capital Stock During the quarter ended September 30, 1997 the Company issued 25,000 shares of common stock, par value $0.01 per share (the "Common Stock"), to employees upon exercise of incentive stock options. The proceeds from these transactions amounted to $126,000. 6. Accounting for Income Taxes Deferred income tax assets, both current and non-current, reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax credit carryforwards. The income tax expense does not include the benefit of recognizing available loss carryforwards to the extent they have already been recognized as a deferred tax asset. Instead, there will be a reduction in the deferred tax asset as such benefits are utilized to reduce taxes payable. The income tax expense was comprised of the following: Three Months Ended September 30, 1997 1996 $000 $000 Current Federal 1,685 11 State 268 1 Total 1,953 12 Deferred Federal 123 (11) State 4 (1) Total Expense 2,080 0 The Company has net operating losses available as carryforwards to reduce future federal income taxes. State tax losses are also available as carryforwards. At September 30, 1997, for federal tax purposes, the net operating loss carryforwards amounted to $12,991,000; they expire through year 2003. The future utilization of the net operating loss carryforwards by the Company is subject to limitation under various provisions of the Internal Revenue Code. The benefit of net operating losses generated by each of FPC, FPR and FMDC prior to its acquisition by the Company cannot be realized until it generates taxable income to utilize such benefit. As of September 30, 1997, certain of these net operating losses had been utilized, with a corresponding decrease of the previously recorded valuation. A full valuation allowance has been provided for the remaining net operating loss carryforwards of FPR and FMDC. 7. New Accounting Pronouncements The Company is evaluating the requirements of SFAS No. 128 "Earnings Per Share" and SFAS No. 129 "Disclosure of Information About Capital Structure," which were issued by the FASB in February 1997 and must be adopted in fiscal 1998. In June 1997, the FASB also issued SFAS No. 130 "Reporting Comprehensive Income" ("SFAS 130") and SFAS No. 131 "Disclosure About Segments of an Enterprise and Related Information" ("SFAS 131"). SFAS 130 must be adopted in fiscal 1999 and SFAS 131 must be adopted in fiscal 1998. The Company currently believes that none of the foregoing FASB statements will have a material impact on its consolidated financial position or results of operations. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results Of Operations Three Month Period Ended September 30, 1997 Compared with the Three Month Period Ended September 30, 1996 Net sales for the three month period September 30, 1997 were $29.2 million compared with $18.6 million for the corresponding 1996 period, an increase of $10.6 million or approximately 57%. During the current three month period, sales for the orals, injectables and medical devices operations were $25.6 million, $3.6 million and less than $0.1 million, respectively. During the corresponding 1996 period, such product sales were $16.2 million, $2.4 million and nil, respectively. The current period's net sales increase was due primarily to the commercial launch of pentoxifylline extended-release tablets during the current quarter in addition to continued strong sales of clonazepam tablets and diclofenac tablets. For the three month period ended September 30, 1997, pentoxifylline, clonazepam and diclofenac accounted for 15%, 20% and 13%, respectively, of the Company's sales. Gross profit for the three month period ended September 30, 1997 was $12.3 million compared with $5.6 million for the corresponding 1996 period, an increase of $6.7 million or approximately 120%. The gross profit as a percent of net sales for the three month period ended September 30, 1997 was approximately 42% compared with approximately 30% for the corresponding 1996 period. Gross profit for the three month period ended September 30, 1997 included $12.9 million from oral products, $(0.3) million from injectable products and $(0.3) million from medical devices. For the prior corresponding period, gross profit for each operation was $6.0 million, $(0.4) million and nil, respectively. The Company's increase in gross profit in the current period was due principally to the contribution from higher margins on new products, principally being pentoxifylline and clonazepam. The loss reported in injectable products in the current period was due to declining prices in the markets for the Company's products. The medical device business continues to work towards achieving full commercialization of it's Safe-Connect valve and related products. The selling, general and administrative expenses for the three month period ended September 30, 1997 were $3.7 million compared with $3.0 million for the corresponding 1996 period, an increase of $0.7 million or approximately 23%. These expenses as a percent of net sales for the three month period ended September 30, 1997, were 13% compared with 16% for the prior corresponding period. The increase in the expense level was primarily due to higher personnel expense. The research and development expenses for the three month period ended September 30, 1997 were $3.0 million compared with the prior corresponding period of $2.5 million, an increase of $0.5 million or approximately 20%. The expense as a percent of net sales for the three month period ended September 30, 1997 was 10% compared with 13% for the corresponding 1996 period. The increased level of expense reflects the continuing commitment to new product development. Other income (expense) reflects interest expense and revolving credit agreement fees offset by interest income. Other income (expense) for the three month period ended September 30, 1997 was $(36,000) compared with $(19,000) for the corresponding period. Income before income tax for the three month period ended September 30, 1997 was $5.5 million compared with less than $0.1 million for the corresponding period. Net income for the three month period ended September 30, 1997 before preferred stock dividends was $3.4 million compared with less than $0.1 million for the corresponding 1996 period. Future financial results will continue to be highly dependent on the ability of the Company to gain approval of and realize income from sales of new products to counter ongoing price erosion within the industry. Financial Condition, Liquidity and Capital Resources The Company had $3.3 million in cash and cash equivalents at September 30, 1997, compared with $3.8 million at June 30, 1997. The current three month period's net decrease of $0.5 million resulted primarily from $3.0 million borrowed from a bank, offset by $1.9 million used for operating activities and $1.6 million used for investments in property, plant and equipment. At September 30, 1997, accounts receivable were $32.3 million as compared to $29.2 million at June 30, 1997, an increase of $3.1 million. This increase was principally due to higher sales levels. Inventory at September 30, 1997 was $34.6 million, as compared to $32.0 million at June 30, 1997, an increase of $2.6 million, due primarily to increased production for new products launched in the current three month period and products planned for launch in the current financial year. Accrued preferred dividends of $169,000 for the three month period ended September 30, 1997 were paid on October 1, 1997. The Company believes that its current cash resources, anticipated operating cash flows and funds available under its existing bank facilities will be sufficient to fund its working capital needs for the next 24 months. Beyond that, depending upon the timing of the Company's cash flow requirements, which is highly dependent upon the unpredictable timing of the receipt of FDA product approvals, the future cash flow needs of the Company could exceed the Company's current cash resources and its available credit under its existing credit facilities. As of September 30, 1997, the Company had $3.3 million in cash, plus approximately $8.0 million of available borrowings under its existing credit facilities. For the year ended June 30, 1998, the Company has committed capital expenditures of $2.3 million for the upgrade of facilities at its Elizabeth, New Jersey site. The Company is currently negotiating expanded credit facilities and it anticipates negotiations will be concluded soon. In the future, should the Company require additional cash flow to support the commercialization of new products following receipt of FDA approval, there can be no assurance that such financing will be available when required, if at all, or will be available upon the terms the Company may deem commercially reasonable. PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS In June 1997, four purported class-action lawsuits were filed in the Delaware Court of Chancery (the "Chancery Court"), under the captions Aimee Dechter v. Edward D. Tweddell, Richard F. Moldin, Alan G. McGregor, Joseph C. Minio, Bruce C. Tully, William R. Griffith, Faulding Inc., FH Faulding & Co., Limited [sic], and Faulding Holdings, Inc., Civil Action No. 15722-NC (6/15/97); Michael J. Golde I/R/A, et al. v. Faulding Inc., Edward D. Tweddell, Alan G. McGregor, Richard F. Moldin, David Beretta and Bruce C. Tully, Civil Action No. 15728-NC (6/6/97); Harbor Finance Partners, et al. v. Edward D. Tweddell, Alan G. McGregor, Richard F. Moldin, Joseph C. Minio, Bruce C. Tully, William R. Griffith, F. H. Faulding & Company Limited [sic] and Faulding Inc., Civil Action No. 15724-NC (6/4/97); and Charles Zimmerman, et al. v. Richard F. Moldin, Edward D. Tweddell, Alan G. McGregor, Joseph C. Minio, Bruce C. Tully, F.H. Faulding & Co., Limited, William R. Griffith, Faulding Holdings, Inc. and Faulding, Inc., Civil Action No. 15723-NC (6/3/97) (the "Actions"). The Actions challenge certain acts allegedly taken or not taken by the Company and the members of the Board of Directors in connection with the proposed transaction pursuant to which Faulding Holdings Inc. ("Holdings"), a wholly-owned subsidiary of FH Faulding & Co. Limited ("Faulding"), would acquire the outstanding Common Stock of the Company that it did not already own and thereby become the sole stockholder of the Company. The Actions also challenge the price originally proposed to be paid by Faulding for the Common Stock, and allege that Faulding, Holdings and the Board breached their fiduciary obligations to the Company's stockholders. The Actions seek to enjoin the consummation of the transaction, and seek an award of damages and attorneys' fees. On September 28, 1997, the parties to all of the Actions executed a Memorandum of Understanding setting forth the terms of their agreement in principle to settle the Actions. Subject to final Court approval, the Memorandum of Understanding provides for the dismissal of the Actions with prejudice and the release of any known or unknown claims, state or federal, that have been or could have been brought in any court by any member of the proposed class against defendants in the Actions and their predecessors, successors, parents, subsidiaries, affiliates, agents or other persons relating to the transaction or any matters that were or could have been asserted in the Actions arising out of the subject matter thereof. The Memorandum of Understanding acknowledges that Faulding took into account the desirability of addressing the claims asserted in the Actions in agreeing to the enhanced terms of the transactions. The Memorandum of Understanding also provides that settling plaintiffs may seek up to $695,000 in attorney's fees and expenses. The Memorandum of Understanding contemplates discovery to be conducted by the plaintiffs to confirm the fairness and reasonableness of the settlement, and the drafting and execution of a Stipulation of Settlement by the parties, which is expected to be presented to the Chancery Court for approval at a hearing to be conducted to approve the Settlement. The Company is named as a defendant in an action in the United States District Court for the District of Delaware entitled Purdue Pharma L.P. and The Purdue Frederick Company vs. Faulding Services Inc., Faulding Inc., Purepac Pharmaceutical Co. and Zeneca Inc., 96 Civ.427. The complaint alleges that the manufacture and marketing in the United States of KADIAN sustained release morphine capsules infringes a patent assigned to one of the plaintiffs and constitutes unfair competitive practices under Federal and State law. The Company, through PPC, manufactures KADIAN pursuant to a contract manufacturing agreement with Faulding Services Inc. ("FSI"), a wholly-owned subsidiary of Holdings. The complaint seeks, among other things, an order enjoining the Company from infringing the subject patent and awarding treble and punitive damages. The Company believes the allegations in the complaint to be entirely without merit and intends to defend this action vigorously. The Company has also asserted counterclaims against Purdue Pharma L.P. and The Purdue Frederick Company seeking to invalidate the subject patent and also seeking damages against the plaintiffs for unfair competitive practices under Federal and State law and violation of the Federal antitrust laws. Pursuant to the terms of the manufacturing agreement between PPC and Faulding relating to Kadian , Faulding is indemnifying the Company in relation to the costs of defending the action. On February 3, 1997, following the submission by PPC of an Abbreviated New Drug Application seeking FDA approval of diltiazem hydrochloride extended-release capsules, USP, the Company's proposed generic version of Cardizem CD , a lawsuit was commenced in the United States District Court for the District of New Jersey entitled - Hoechst Marion Roussel, Inc. and Carderm Capital L.P. v. Faulding Inc. and Purepac Pharmaceutical Co., Civil Action No. 97-516 (JAG Jr.). The complaint alleges that the Company's proposed generic product infringes a patent assigned to Carderm Capital L.P. and licensed, on a non-exclusive basis, to Hoechst Marion Roussel, Inc., and seeks to delay the commercial introduction of the Company's proposed generic product until the expiration of that patent. The Company believes that its proposed generic product does not infringe the patent at issue in the lawsuit and, additionally, that the patent is invalid. The Company therefore intends to defend the lawsuit vigorously. The Company also has asserted a counterclaim against Hoechst Marion Roussel, Inc. alleging that its sales of Cardizem CD since 1993 have constituted acts of infringement under a patent licensed to PPC. Pursuant to the terms of the agreement between PPC and Faulding relating to the transfer of technology for this product, Faulding is indemnifying the Company in relation to the costs of defending the action. The Company is involved in litigation incidental to the conduct of its business, in addition to the above matters, and does not believe that the ultimate adverse resolutions of any, or all, thereof would have a material adverse effect on its financial position, results of operations or cash flows. Item 2 through Item 4. Not Applicable. Item 5. OTHER EVENTS On September 29, 1997, the Company, Faulding and Holdings entered into an Agreement and Plan of Recapitalization (the "Recapitalization Agreement") pursuant to which the Company, subject to shareholder approval, will enact an amendment to its Certificate of Incorporation (the "Recapitalization Amendments") to effect a recapitalization (the "Recapitalization") which will result in Holdings becoming the sole stockholder of the Company and each other existing holder of Common Stock of the Company becoming entitled to receive a cash payment of $13.50 per share of Common Stock (the "Transaction Consideration"). The Recapitalization will be effected through a reverse stock split of the Company's Common Stock (the "Reverse Stock Split") whereby each 7,924,385 issued and outstanding shares of Common Stock as of the effective time of the Recapitalization will be combined into one validly issued share of common stock ("New Common Shares") having a par value per share equal to the quotient obtained by dividing (x) the product of (1) the total number of shares of Common Stock issued and outstanding immediately prior to the effective time of the Recapitalization, multiplied by (2) $0.01, by (y) the number of New Common Shares to be issued and outstanding immediately following the effective time of the Recapitalization. As a result of the Reverse Stock Split, holders of less than 7,924,385 shares of Common Stock will be entitled to receive, in lieu of fractional New Common Shares, the Transaction Consideration multiplied by the number of shares of Common Stock held by such holders immediately prior to the effective time of the Recapitalization. The Recapitalization is subject to certain conditions, including the condition that the Recapitalization Amendment and the Recapitalization Agreement be approved and adopted by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock other than shares of Common Stock held by Faulding and its affiliates. The Company anticipates presenting the Recapitalization Agreement and the transactions contemplated thereby to stockholders for approval at a Special Meeting of Stockholders on December 15, 1997. Item 6 (a). EXHIBITS Not Applicable. Item 6 (b). REPORTS ON FORM 8-K Not Applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FAULDING INC. BY: /s/Richard F. Moldin November 4, 1997 Richard F. Moldin President and Chief Executive Officer (Principal Executive Officer) BY: /s/Paul Astley November 4, 1997 Paul Astley Chief Financial Officer (Principal Accounting Officer) EX-27 2
5 3-MOS JUN-30-1998 SEP-30-1997 3,323 0 32,264 0 34,572 77,073 45,550 0 125,928 34,546 0 0 2 201 88,923 125,928 29,184 29,184 16,918 6,729 0 0 (36) 5,501 2,080 3,421 0 0 0 3,421 .16 0
-----END PRIVACY-ENHANCED MESSAGE-----