<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 22, 2000
HALSEY DRUG CO., INC.
695 NO. PERRYVILLE ROAD, ROCKFORD, ILLINOIS
(815)-399-2060
<TABLE>
<S> <C> <C>
Incorporated under the laws of Commission File Number I.R.S. Employer Identification Number
State of New York 1-10113 11-0853640
</TABLE>
<PAGE> 2
ITEM 5 OTHER EVENTS
On March 22, 2000, the Company announced that it had successfully
negotiated a lease termination agreement with its landlord for the Company's
Brooklyn, New York manufacturing facility. Under this agreement, the Company is
obligated to pay rent through August 31, 2000 but will, in exchange for a
termination payment of $1,150,000, be able to cancel the remainder of the lease
term which was to continue until December 31, 2005. The total base rent payments
that would have been required from September 1, 2000 to December 31, 2005 were
approximately $6,715,000. The agreement does allow the Company to continue to
lease the facility beyond August 31, 2000 but requires the Company to vacate the
premises no later than March 31, 2001.
The total charge against earnings of approximately $3,220,000
resulting from eliminating the Brooklyn operation includes the lease termination
payment of $1,150,000, a provision of $200,000 for plant repairs, the write-off
of leasehold improvements of $1,778,000 and severance and other costs for
terminated employees of $730,000 less deferred rent previously expensed of
$638,000. This one time charge will be included in the Company's results for the
fourth quarter of 1999.
The Settlement Agreement requires that the Company remit the
termination payment no later than April 18, 2000. Although the Company is
actively seeking sources of financing, no assurance can be given that the
Company will satisfy the termination payment obligations.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
99.2 Press Release dated March 22, 2000 announcing
termination and settlement of Brooklyn lease
</TABLE>
<PAGE> 3
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.
HALSEY DRUG CO., INC.
By: \s\ Michael Reicher
---------------------------------
Michael Reicher
President and Chief Executive
Officer
Date: March 24, 2000
<PAGE> 1
EXHIBIT 99.2
CONTACT: Peter A. Clemens
Vice President and Chief Financial Officer
(815-399-2060)
FOR IMMEDIATE RELEASE
HALSEY DRUG CO., INC.
ANNOUNCES TERMINATION AND SETTLEMENT ON BROOKLYN LEASE
ROCKFORD, IL, March 22, 2000, Halsey Drug Co., Inc. (AMEX-HDG) today announced
that it had successfully negotiated a lease termination agreement with its
landlord for the Company's Brooklyn, New York manufacturing facility. Under this
agreement, the Company is obligated to pay rent through August 31, 2000 but
will, in exchange for a termination payment of $1,150,000, be able to cancel the
remainder of the lease term which was to continue until December 31, 2005. The
total base rent payments that would have been required from September 1, 2000 to
December 31, 2005 were approximately $6,715,000. The agreement does allow the
Company to continue to lease the facility beyond August 31, 2000 but requires
the Company to vacate the premises no later than March 31, 2001.
Commenting on the agreement, Michael Reicher, President & CEO, stated that
"this completes a strategy begun two years ago when the Company determined, that
in order to reduce operating costs, improve efficiencies and attract high
caliber technical personnel, it was necessary to significantly improve its
manufacturing facilities. The first step in this strategy was accomplished in
March, 1999 when the Company leased the state of the art manufacturing facility
in Congers, New York. The Company intends to move all of its existing activities
from Brooklyn into the Congers facility or lease a limited amount of additional
space in the Congers area".
The Company's formal decision to discontinue its Brooklyn operations was
initiated in the fourth quarter with notification to its union. The total charge
against earnings of approximately $3,220,000 resulting from eliminating the
Brooklyn operation includes the lease termination payment of $1,150,000, a
provision of $200,00 for plant repairs, the write-off of leasehold improvements
of $1,778,000 and severance and other costs for terminated employees of $730,000
less deferred rent previously expensed of $638,000. This one time charge will be
included in the Company's results for the fourth quarter of 1999.
The Settlement Agreement requires that the Company remit the termination payment
no later than April 18, 2000. Although the Company is actively seeking sources
of financing, no assurance can be given that the Company will satisfy the
termination payment obligations.
Halsey Drug Company, Inc. together with its subsidiaries, is a manufacturer of
generic drugs in solid and liquid dosage forms sold to distributors,
wholesalers, drug store chains,
<PAGE> 2
institutions, government agencies and other pharmaceutical manufacturers
nationwide, as well as a manufacturer of active pharmaceutical ingredients.
The statements in this press release are forward looking and are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that forward looking statements involve risk and
uncertainties which may affect Halsey's business prospects, including economic,
competitive, governmental, technological and other factors discussed in filings
with the Securities and Exchange Commission.
This and past press releases for Halsey Drug C., Inc. are available at Halsey's
web site at WWW.HALSEYDRUG.COM.
