Ropak Planning Its First Public Stock Offering

Ropak Laboratories Inc., a developer of laboratory tests that offer an alternative to live-animal testing, said Monday that it plans to raise $6.75 million in its first offering of stock to the public.

Ropak Labs has developed a laboratory test that mimics human eye and skin responses to determine the safety of cosmetic and household products. The company’s Eytex and Skintex tests are used by more than 100 customers and distributors through Ropak Corp., its Fullerton-based distributor.

The stock sale comes eight months after former Gov. George Deukmejian vetoed a bill that would have made California the first state to ban eye- and skin-irritation tests on rabbits. Passage of the bill would probably have provided a big boost to the Irvine firm.

Ropak Labs’ offering consists of 1.5 million “units,” with each unit including one share of common stock and one warrant to purchase an additional share. Each unit will sell for $4.50, the company said, and the warrants will be exercisable at a future price of $5 per share.

Ropak will use $1.5 million of the proceeds to repay debt and another $1.5 million to purchase supplies and equipment. A total of $1.2 million will go toward product development and testing, with the remainder to be used for working capital, according to a company filing with the Securities and Exchange Commission.

Ropak lost $249,000 on sales of $530,000 for its fiscal year ended Feb. 28, 1990. The company is forecasting sales of $1.25 million for the year ending Thursday.

Stratton Oakmont Inc. of Lake Success, N.Y., will underwrite the offering, which is expected to be effective in April, according to William M. Curtis, secretary and treasurer.