| Pacifichealth Laboratories, Inc. | |||
| Ticker: | PHLI | 1460 Route 9 North | |
| Exchange: | NASDAQ-Small Cap Market | Woodbridge, NJ 07095 | |
| Industry: | Wholesale (SIC Code 5122) | (908) 636-6141 | |
| # of Employees: | 8 | ||
| Type of Shares: | Common Shares | Filing Date: | 9/25/97 | |
| U.S. Shares: | 1,200,000 | Offer Date: | 12/19/97 | |
| Non-U.S. Shares: | 0 | Filing Price: | $6.00 | |
| Primary Shares: | 1,200,000 | Offer Price: | $6.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.60 | |
| Offering Amount: | $7,200,000 | Selling: | ||
| Expenses: | $380,000 | Reallowance: | ||
| Shares Out After: | 4,185,672 |
| Manager | Tier | Phone |
| First Montauk Securities Corp. | Lead Manager |
| Issuer's Law Firm: | Connolly Epstein Chicco Foxman Engelmyer & Ewing |
| Bank's Law Firm: | Goldstein & Digioia, L.L.P. |
| Auditor: | Schiffman Hughes Brown |
| Registrar/Transfer Agent: | Jersey Transfer & Trust Co. |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $3.09 | $2.57 | $0.31 | Assets: | $2.95 |
| Net Income: | $0.14 | -$3.27 | -$0.32 | Curr Assets: | $2.81 |
| EPS: | $0.05 | -$0.95 | -$0.13 | Liabilities: | $1.70 |
| Prior EPS: | -$0.12 | -$0.51 | -$1.01 | Curr Liabilities: | $1.70 |
| Cash Flow/Oper: | -$2.38 | $0.99 | $1.55 | Equity: | $1.25 |
| Cash Flow/Fin: | $2.26 | -$0.05 | -$0.06 | Cash: | $1.17 |
| Cash Flow/Inv: | -$0.21 | -$0.05 | Working Cap: | $1.12 | |
| Business Description |
| The company was formed to engage in the development and sale of products based upon natural ingredients that have demonstrable health benefits and can be marketed without prior Food and Drug Administration approval under current regulatory guidelines. The company has focused its efforts since inception on developing a limited number of products and the infrastructure to support its initial activities. The compan's first product, ENDUROX�, a dietary supplement marketed in the sports performance and recover category, was introduced in March 1996.Management believes that the use of natural products as dietary supplements to improve and promote health and well being is gaining incresing acceptance by American consumers. The company's primary strategy for growth is to develop new brand and products, and to continue to expand its distribution network. The company has pursued a "multi-channel" distribution strategy in marketing its line of ENDUROX products, and intends to follow a similar strategy with future products. |
| Competition |
| Dietary supplements are distributed in variety of ways, including independent health food suppliers, such as the company, who focus on vitamins and dietary supplements; mass volume retail suppliers; gym and health club product suppliers; direct sale and mail order vendors; and private label manufacturers. The company estimates that there are approximately 20 large medicinals. Generally, these companies are well funded and sophisticated in their marketing approaches. Examples are Weider Nutrition International, Nature's Way, Nature's Herbs and Solaray, Inc. In addition, there are a number of large, multilevel marketers such as Shaklee, Herbalife and Amway that sell encapsulated herbs, diet products, herbal supplement formulas and vitamin supplements. As the market for herbal products and medicinals has increased, major retailers such as GNC have introduced house brands to take advantage of their retailing strength, a trend that is likely to continue. Although major retailers generally have not introduced innovative products in the past, the company believes that house brands represent a competitive threat once a product has become established. Large pharmaceutical companies and packaged food and beverage companies also participate in the nutritional supplement market on a limited basis. Increased competitive activity from such companies could have a material adverse effect on the company and other participants in the industry since such companies have greater financial and other resources available to them and posess far more extensive manufacturing, distribution and marketing capabilities than the company and its other competitors. |
| Business Plan |
| The company's business strategy is to identify novel and safe natural products that have demonstrable health benefits and can be marketed without prior FDA approval under current regulatory guidelines, and to promote and market those products aggressively through mass and health food channels of distribution using, among other things, based upon Company-conducted research and testing. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to pay advertising, marketing and manufacturing costs including costs associated with the introduction of new products, for research and development, to retain additional personnel, and for general operating and administrative expenses. |
| Name of Shareholder | % Owned Before | % Owned After |
| Robert Portman | 31.60% | 23.20% |
| Jonathan D. Rahn | 11.10% | 8.00% |
| Jemeson Investment Co. | 7.50% | 5.30% |
| David I. Portman | 6.20% | 4.40% |
| T. Colin Campbell | 5.70% | 4.10% |
| Officer Name | Title | Age |
| T. Colin Campbell, PhD | Director, Chairman -- US Scientific Advisory Board | |
| Jonathan D. Rahn | Executive Vice President, Chief Financial Officer and Director | |
| Robert Portman, PhD | President and Chief Executive Officer, Treasurer and Chairman of the Board of Directors | |
| David I. Portman | Secretary and Director |
| Additional Underwriter Compensation |
| Warrant to purchase 120,000 shares/units at $120.00 per share/unit. |
| Exercise price of $7.20 for 4 year(s), 1 year(s) from 12/19/97. |