AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER , 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION ,STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------
SENETEK PLC
(Exact name of registrant as specified in its charter)
ENGLAND 77-0039728
(State of or other jurisdiction of (I.R.S. Employer I.D. Number)
incorporation or organization)
23 PALACE STREET LONDON, UNITED KINGDOM SW1E 5HW
(Address, including
zip code, and telephone number, including area code, of Registrant's Principal
Executive Office)
------------------------------
JOSEPH A. BARATTA, ESQ.
BARATTA & GOLDSTEIN
597 FIFTH AVENUE
NEW YORK, NY 10017
(212) 750-9700
(Address,
including zip code, and telephone number, including area code, of agent for
service)
-----------------------------
APPROXIMATELY DATE OF COMMENCEMENT OF
PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: FROM TIME TO TIME AFTER THE
EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
-----------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
-------------------------------
CALCULATION OF REGISTRATION FEE
----------------------------- --------------- --------------------- ---------
<TABLE>
<CAPTION>
Proposed maximum
Title of each class of Amount to be offering price per Proposed maximum Amount of
securities to be registered registered share(3) aggregate offering registration
price fee
----------------------------- --------------- --------------------- ---------------------- ---------------
----------------------------- --------------- --------------------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C>
Ordinary Shares Nominal 2,857,143 (1) $3.50 $10,000,000.50 $2,950.00
Value 5 Pence ("p")
----------------------------- --------------- --------------------- ---------------------- ---------------
----------------------------- --------------- --------------------- ---------------------- ---------------
Ordinary Shares Nominal 571,429 (2) $6.00 $3,428,574 $1,011.42
Value 5 Pence ("p")
----------------------------- --------------- --------------------- ---------------------- ---------------
Total 3,428,572 $3,961.42
----------------------------- --------------- --------------------- ---------------------- ---------------
<FN>
(1) ORDINARY SHARES, NOMINAL VALUE 5P PER SHARE, ISSUABLE UPON EXERCISE OF
WARRANTS, EACH WARRANT ENABLES THE HOLDER TO PURCHASE ONE ORDINARY SHARE
AT A PRICE OF $3.50. AMERICAN DEPOSITARY SHARES EVIDENCED BY AMERICAN
DEPOSITARY RECEIPTS ISSUABLE UPON DEPOSIT OF THE ORDINARY SHARES
REGISTERED HEREBY AND OTHER ORDINARY SHARES OF THE REGISTRANT ARE
REGISTERED UNDER A SEPARATE REGISTRATION STATEMENT.
(2) ORDINARY SHARES NOMINAL VALUE 5P PER SHARE, ISSUABLE UPON EXERCISE OF
WARRANTS, EACH WARRANT ENABLES THE HOLDER TO PURCHASE ONE ORDINARY SHARE
AT A PRICE OF $6.00. AMERICAN DEPOSITARY SHARES EVIDENCED BY AMERICAN
DEPOSITARY RECEIPTS ISSUABLE UPON DEPOSIT OF THE ORDINARY SHARES
REGISTERED HEREBY AND OTHER ORDINARY SHARES OF THE REGISTRANT ARE
REGISTERED UNDER A SEPARATE REGISTRATION STATEMENT.
(3) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE.
</FN>
</TABLE>
---------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION
8(A) MAY DETERMINE.
<PAGE>
------------------------
CROSS REFERENCE SHEET
PURSUANT TO RULE 501
CAPTION AND LOCATION IN
FORM S-3 PROSPECTUS OR REGISTRATION
ITEM NO. INFORMATION CALLED FOR BY ITEM STATEMENT
- -------- ------------------------------ ---------
1 Forepart of the Registration Statement Outside Front Cover Page of
and Outside Front Cover Page of Prospectus
Prospectus.............................
2 Inside Front and Outside Back Cover Inside Front and Outside
Pages of Prospectus.................... Back Cover Page of
Prospectus
3 Summary Information, Risk Factors and PROSPECTUS SUMMARY; RISK
Ratio of Earnings to Fixed FACTORS
Charges................................
4 Use of Proceeds........................ USE OF PROCEEDS
5 Determination of Offering Price........ Outside Front Cover Page of
Prospectus; DETERMINATION
OF OFFERING PRICE
6 Dilution............................... Not Applicable
7 Selling Security Holders............... SELLING SECURITY HOLDERS
8 Plan of Distribution................... Outside Front Cover Page of
Prospectus; PLAN OF
DISTRIBUTION
9 Description of Securities to be
Registered............................. DESCRIPTION OF SECURITIES
10 Interests of Named Experts and
Counsel................................ Not Applicable
11 Material Changes...................... Not Applicable
12 Incorporation of Certain Information By INCORPORATION OF CERTAIN
Reference............. DOCUMENTS BY REFERENCE
13 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ INDEMNIFICATION
14 Other Expenses of Issuance and OTHER EXPENSES OF ISSUANCE
Distribution........................... AND DISTRIBUTION
15 Indemnification of Directors and
Officers............................... INDEMNIFICATION OF
DIRECTORS AND OFFICERS
16 Exhibits............................... EXHIBITS
17 Undertakings........................... UNDERTAKINGS
i
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, Dated October , 1998
PROSPECTUS
SENETEK PLC
3,428,572 ORDINARY SHARES
This Prospectus relates to the subsequent resale or offer for sale by
Selling Security Holders (as hereinafter defined) of up to 3,428,572 Ordinary
Shares ("Shares") 5 English Pence ("p") of Senetek PLC ("Senetek" or the
"Company"), a public limited company registered in England. Each Share is
represented by one American Depositary Share (the "ADSs"). The ADSs are
evidenced by American Depositary Receipts (the "ADRs"). The Shares included in
this registration underly Warrants, each Warrant enables the holder to purchase
one Share. ADSs evidenced by ADRs issuable upon deposit of the Ordinary Shares
registered hereby are registered under a separate Registration Statement. The
distribution of the Shares may be effected in one or more transactions through
one or more transactions through one or more brokers or dealers, through
privately negotiated transactions or otherwise at market prices prevailing at
the time of sale or at prices otherwise negotiated.
Upon any sale of the Shares covered by this Prospectus, Selling
Security Holders and any participating brokers or dealers may be deemed to be
underwriters as that term is defined in the Securities Act of 1933, as amended
(the "Act"), and commissions or discounts or any profits realized on the sale of
such Shares received by Selling Security Holders and such brokers or dealers may
be deemed to be underwriting commissions or discounts within the meaning of the
Act.
The ADSs of the Company are listed on the NASDAQ(SM) Small Cap Market
under the symbol "SNTKY". On October 20, 1998, the last sale price of the ADRs
as reported by NASDAQ(SM) was $1.938 per ADRs.
The expenses of this offering will be paid by the Company.
FOR INFORMATION CONCERNING CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 13.
------------------------------
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE
A HIGH DEGREE OF RISK AND SUBSTANTIAL IMMEDIATE DILUTION
POTENTIAL PURCHASERS SHOULD NOT INVEST IN THESE
SECURITIES UNLESS THEY CAN STAND THE RISK OF LOSING THEIR
ENTIRE INVESTMENT. SEE "RISK FACTORS".
------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUANCY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------
THE OFFERS REFERRED TO IN THIS DOCUMENT ARE NOT BEING MADE
DIRECTLY OR INDIRECTLY IN, AND THIS DOCUMENT AND ANY
ACCOMPANYING FROMS ARE NOT BEING, AND MUST NOT BE, MAILED OR
OTHERWISE DISTRIBUTED OR SENT IN WHOLE OR IN PART, IN OR INTO,
THE UNITED KINGDOM.
The Company will not receive any proceeds from the sale of the
American Depositary Shares under the Offering by Selling Stockholders. In the
event a Warrant holder elects to exercise then in that event the Company will
receive proceeds from the exercise of the Warrants.
The date of this Prospectus is October , 1998
- --------------------------------------------------------------------------------
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities and Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files, reports and other information with the Securities and Exchange
Commission ("Commission"). Such reports and other information can be inspected
and copied at the Public Reference facilities maintained by the Commission, 450
Fifth Street, NW Washington D.C. 20549, as well as the Regional Officer of the
Commission at 7 World Trade Center, suite 1300, New York, New York 10048, and
copies can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, NW, Washington D.C. 20549, at prescribed rates. Reports, Proxy
and other information regarding the Company can be obtained from the Commission
Web site http://www.sec.gov. Reports and other information about the Company can
be inspected at the offices of NASDAQSM Stock Market 1733 K Street, NW,
Washington D.C. 20006-1500.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission and are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
2. Annual Report on Form 10-K for the fiscal year ended December 31,
1996.
3. Quarterly Report on Form 10-Q and Form 10-Q/A (No. 1) for the
quarter ended June 30, 1998.
4. Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
5. Proxy Statement for the Annual Meeting of Shareholders held on July
31, 1998.
6. The description of the Company's Ordinary Shares represented by
American Depositary Receipts contained in the Company's Registration Statement
on Form F-1 No. 33-3535.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to the Registration Statement which indicates that all
securities offered by this prospectus have been sold or which de-registers all
securities then remaining unsold shall be deemed to incorporated by reference in
this prospectus and to be a part hereof from the date of filing such documents.
Any statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for the purposes hereof to the extent that
statements contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any such statement so modified or superseded shall be deemed to constitute a
part hereof, except as so modified or superseded.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner to whom a copy of the Prospectus has been
delivered on written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to the offices of the
Company,Senetek PLC, 23 Palace Street, London, United Kingdom SW1E 5HW,
Attention Paul A. Logan, Secretary of the Company, telephone number
011-44-171-828-4800.
No dealer, sales representative or other person has been authorized
to give any information or to make any representations in connection with this
offering other than those contained in the Prospectus and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of any offer to buy, any
securities other than the registered securities to which it relates or any offer
to, or the solicitation of, any person in any jurisdiction where such an offer
or solicitation would be unlawful. 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
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
2
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
SUMMARY
- -------
The following summary is qualified in its entirety by, and should be
read in conjunction with (i) Management's Discussion and Analysis of Financial
Condition and Results of Operations and (ii) the Consolidated Financial
Statements and Notes thereto and the more detailed information appearing
elsewhere in this Prospectus or incorporated herein by reference. Unless the
context otherwise requires, references to the "Company" or "Senetek" mean
Senetek Plc. and its direct and indirect subsidiaries. All references to a
particular fiscal year refer to the 12 months ended on December 31 of the year
referenced (e.g., fiscal 1997 means the fiscal year ended December 31, 1997).
BUSINESS
Senetek PLC ("Senetek" or "the Company") is a public limited company registered
in England in October, 1983 with the number 1759068 with the objective of
sponsoring research in the life sciences and biotechnology fields, with
particular emphasis on research relating to the diagnosis and treatment of
diseases related to senescence or aging, and the subsequent exploitation of the
results of such research.
The main areas in which the Company is involved are the treatment of male sexual
dysfunction ("MSD"), which includes the development, manufacture and sale of a
patented self-administered automatic injector syringe as a delivery system. The
patented auto injector system is referred to as Reliaject(TM) and the
combination therapy of vasoactive intestinal polypeptide and phentolamine
mesylate for the treatment of MSD administered with Reliaject(TM) is referred to
as the Invicorp(TM) product. Phase III Clinical Trials for Invicorp(TM) are now
complete and product licensing applications have been filed in the United
Kingdom ("UK"), Ireland, Denmark, Switzerland and New Zealand. The Company is
planning to lodge a New Drug Application ("NDA") in the United States ("US") at
the earliest practicable time, possibly in the second half of 1998. In December,
1993, the Company formed a wholly owned subsidiary, Senetek Drug Delivery
Technologies Inc. "SDDT" (formerly named MEIS Corporation) - a Delaware
Corporation formerly based in St. Louis and now based in Napa, California, for
the purposes of designing, manufacturing and exploiting the syringe, initially
as a delivery system for its MSD product. Subsequently, possible other
applications for the syringe have been and are being investigated, notably in
the case of Epinephrine, as an antidote against anaphylactic shock.
The Company has a corporate research laboratory in St. Louis which investigates
the therapeutic viability of potential new products prior to further development
and supports the analytical measurement process in Phase II and III trials,
through the development of chemical assay methodology. The Company operates a
development center in Kettering, UK, whose staff are involved in the monitoring
of Phase III clinical trials in the UK and Europe, product licensing
applications and regulatory work with the relevant medicines evaluation agencies
in Europe.
In September 1995, the Company extended its interests by forming another wholly
owned subsidiary, Carme Cosmeceutical Sciences Inc. ("CCSI") (formerly named
Carme International Inc.) - a Delaware Corporation formerly based in Novato,
California but now located at Napa, California, for the acquisition of the
majority of the assets of Carme Inc., an organization based in Novato, that
manufactured and distributed a wide range of health and beauty products. This
acquisition was designed to promote the Company's interest in the area of skin
care, with particular reference to potential anti-aging aspects, and
specifically to provide a vehicle for the manufacture and distribution of a
product featuring the patented kinetin compound (formerly referred to as Factor
X or Vivakin) in cosmeceutical format. CCSI revised its supply chain strategy
during 1997 with the result that total manufacturing requirements were
outsourced from the fourth quarter of 1997. Additional resources have been
focused on the commercialization of kinetin and the revitalization of CCSI's
Mill Creek core brands. During the fourth quarter of 1997 Senetek re-located its
SDDT, CCSI and US Corporate activities to a single site in Napa, California. The
move was completed in January 1998 with the closure and relocation of the CCSI
Novato facility, the SDDT St Louis syringe manufacturing facility and the New
York Corporate office. Senetek's Scientific Research Center continues to operate
out of the Tesson Grove Medical Center in St Louis.
Sales of monoclonal antibodies purchased from outside suppliers and, derived
from Company sponsored research into diagnostic procedures for Alzheimer's
disease and other cell lines are effected on a continuing basis to the
scientific community for research purposes.
Aspects of the business are discussed under "Product Research and Development",
"Manufacturing and Marketing", and "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
3
<PAGE>
PRODUCT RESEARCH AND DEVELOPMENT
GENERAL
- -------
A significant proportion of the Company's historic and current operating
expenses have related to the discovery and development of biomedical products,
for which purpose the Company has established clinical research agreements with
consultants and research scientists. Under these agreements, the Company funds
agreed programs of the consultants', clinicians' or research scientists' work
and retains exclusive rights to manufacture and market worldwide any products
arising from such research. Currently no products, except for CCSI's sales of
its Mill Creek range of products incorporating the Company's kinetin compound,
and the sale of monoclonal antibodies, have reached the marketing stage but if
products arise from such research, certain of the researchers will become
entitled to a royalty under the terms of their individual agreements.
Typically, the research agreements referred to above oblige the Company to fund
research in amounts to be determined between the parties. The researchers are
responsible for filing progress reports with the Company. Currently, Senetek's
research and development efforts consist of the work being done under these
agreements, and through liaison with the research teams involved, and with
specialised consultants on matters such as formulation, stability, clinical
trials and regulatory matters covering the products involved in such research.
MALE SEXUAL DYSFUNCTION ("MSD") INVICORP(TM)
- --------------------------------------------
The Company has continued to liaise with research groups, clinicians and
consultants to conduct controlled clinical trials in the United Kingdom,
following the completion of the earlier stage trials in Denmark. Further liaison
is conducted with consultants and clinicians in the USA. The Company proposes to
expedite the development and subsequent commercialisation of its Invicorp(TM)
product either through its own resources where appropriate or commercially
advantageous, or in co-operation with potential pharmaceutical partners,
distributors or licensees.
In the second quarter of 1998, one of the active constituents of Invicorp(TM),
Vasoactive Intestinal Polypeptide; was granted a British Approved Name ("BAN") -
AVIPTADIL.
Marketing Authorisation Applications ("MAA's") were filed for Invicorp(TM) in
1997 with the relevant regulatory bodies in the United Kingdom, Ireland,
Denmark, Switzerland, South Africa and New Zealand. A marketing permit for
Denmark was granted in the third quarter of fiscal year 1998 and the Company
seeks to obtain other marketing authorisations by the end of 1998. An
application under the European Mutual Recognition Procedure ("MRP") is pending
depending on the choice of Reference Member State ("RMS") in Europe. In the USA,
Invicorp(TM) received Investigational New Drug ("IND") approval from the Federal
Food & Drug Administration ("FDA") enabling the Company to conduct clinical
trials in the USA and the Company expects to file a New Drug Application ("NDA")
with the FDA during the second half of 1998.
SELF-ADMINISTERED AUTO-INJECTOR SYRINGE (RELIAJECT(TM))
The Company's patented auto-injection device ("ReliaJect(TM)") has now been
fully developed by SDDT, and is currently being used as the delivery device for
the Invicorp(TM) in both clinical trials and for supplies, in Europe, on a named
patient basis. The potential for parenteral delivery of other drugs using the
ReliaJect(TM) device, in additional to Invicorp(TM) and epinephrine (adrenaline)
referred to herein is under active review and investigations into other
potential applications.
EPINEPHRINE IN THE RELIAJECT(TM) AUTO-INJECTION DEVICE
The Company has filed an Abbreviated New Drug Application ("ANDA") with the US
FDA during 1998 for the proposed administration of epinephrine by subcutaneous
injection delivered via the ReliaJect(TM) auto-injection device, under the
proposed brand name "AdrenaJect". The Company plans to file a MAA with the
Medicines Control Agency ("MCA") in the United Kingdom during the second half of
1998. Epinephrine (adrenaline in Europe) is a well recognised and documented
compound that is used as an
4
<PAGE>
emergency antidote in anaphylactic shock - a life threatening condition
triggered by a severe allergic reaction to insect stings, insect bites and to
certain foodstuffs. It is hoped that marketing approval in the USA may be gained
in the last quarter of 1998 with commercial sales commencing in 1999. In
addition, the Company is developing a pediatric formulation for epinephrine in
the ReliaJect(TM) auto-injection device with a view to filing an ANDA with the
FDA at the earliest practicable date. Identification of, and negotiations with,
prospective commercial partners for epinephrine in the ReliaJect(TM) device are
in early stages.
SKIN AGING
- ----------
Research activity relating to the Company's anti-aging compound continues to be
carried out through research groups in the US including the University of
California, Irvine.
With regard to the commercial exploitation of products incorporating kinetin,
the Company has, through its subsidiary CCSI, commenced the successful marketing
of its Mill Creek line of products as an "Age Defiant", "over-the-counter"
consumer product, and conducted a major advertising campaign in mid-1997.
Evidence to date, suggests that the patented kinetin product could represent a
major breakthrough in the prevention or delay of aging characteristics in human
fibroblasts. Specifically, kinetin preparations have revealed in trials at the
University of California the reduction of fine lines and wrinkles, mottled
hyperpigmentation, telangiectasia and tactile skin roughness.
The Company also holds a patent for the use of kinetin in the treatment of
psoriasis.This pharmaceutical application of kinetin would require further
extensive pivotal clinical studies and toxicology testing prior to the filing of
product licensing applications. This additional activity is not subject to the
Company's presently planned activities.
GENERAL
- -------
Research and Development expenditure amounted to $5,026,000, $2,187,000 and
$1,925,000 for fiscal 1997, 1996 and 1995 respectively.
MANUFACTURING AND MARKETING
The Company's subsidiary, SDDT, has installed plant and machinery for the
manufacture and assembly of the components for Reliaject(TM) on a limited
production basis and has now either purchased or entered into the necessary
capital commitments to provide high volume manufacturing at the new facility at
Napa, California which is planned to begin during the fourth quarter of 1998.
SDDT has responsibility for the supply chain activities of providing
Reliaject(TM) components to specialized contract manufacturers who will perform
the assembly of Reliaject(TM) and fill the syringe with compounds such as the
Invicorp(TM) and Epinephrine formulations, perform final assembly and complete
pack preparation prior to distribution. The active materials, vasoactive
intestinal polypeptide and phentolamine mesylate which are formulated in the
Invicorp(TM) preparation are currently available in commercial quantities from
two suppliers. These suppliers have developed synthetic methods which are
included in the product licensing applications. There is therefore a degree of
reliance on these specialized suppliers for continued supply of materials.
In the case of CCSI, manufacture, filling and labelling of its products are now
outsourced. In South Africa and the United Kingdom licenses to manufacture have
been granted for the Mill Creek line of skincare products. CCSI's products are
distributed internationally, with the majority of the products being sold within
the North American Free Trade Area ("NAFTA") through its marketing organization
covering two main sectors, natural products, and speciality mass markets.
Distribution agreements have been signed within the US and abroad. There is no
significant reliance on main or specialised suppliers, and it is not anticipated
that problems will arise over the question of access to raw materials that are
generally available and that will be required for CCSI's contract manufacturing
processes.
In accordance with an agreement entered into with the Research Foundation for
Mental Hygiene Inc. ("the Foundation"), the Company, which has been granted the
exclusive right to certain of the Foundation's cell
5
<PAGE>
lines capable of producing certain monoclonal antibodies, including those
applicable to the early diagnosis of Alzheimer's disease, continues to effect
sales of such antibodies, which are sourced from outside suppliers to the
scientific community for research purposes in consideration for a royalty
entitlement in favor of the Foundation. The Company is reliant on the sourcing
of the monoclonal antibodies from a specific biotech organization at the present
time.
In the case of any emerging products, the Company anticipates that any
manufacturing and marketing activities may be arranged through co-development
and marketing agreements with companies which have already established a
majority presence in specialised fields. In this event, any revenues to be
generated will arise primarily through third party distribution or licensing
arrangements or co-ventures whereby the Company will seek to receive a
percentage of sales, licence fees and/or milestone payments in consideration for
its grant of specified marketing rights to its products, or by profit
participation through a third party equity investment or joint venture.
COMPETITION
The biomedical, drug delivery, biopharmaceutical and pharmaceutical industries
are highly competitive and the Company's business and research efforts compete
with drug discovery and development programs at biomedical, drug delivery and
biopharmaceutical companies as well as with the internal drug discovery
development programs of pharmaceutical companies, acting independently or in
collaboration with other companies. In addition, academic institutions,
government agencies throughout the world and their public and private
organisations may seek intellectual property protection; discover what could be
considered as competing products, or establish collaborative arrangements in the
Company's areas of research and development.
The vast majority of the Company's existing or potential competitors have
substantially greater financial, technical and human resources and name
recognition than the Company and are better equipped to research, develop,
patent, conduct pre-clinical testing and human clinical trials, manufacture, and
market products. These Companies may develop or in license, or acquire products
and/or technologies and introduce products competitive with or superior to those
of the Company. The timing of the market introduction of competitors' products
will be important competitive factors. Accordingly, the relative speed with
which the Company can develop products and technologies; complete pre-clinical
testing; conduct human clinical trials; initiate the necessary regulatory
approval processes, and supply commercial quantities of the products to the
market will be critical to the Company's success.
Once products have been approved for sale, the Company believes that competition
will be based, inter alia, on product efficacy, product safety, product
reliability, price and patent position. The Company's competitive position also
depends upon its ability to attract and retain suitably qualified and
experienced personnel to develop proprietary products or processes or
technologies and to commercialise them and the degree of intellectual property
protection obtainable. The Company expects competition to intensify in all
fields in which it is involved as new products in these areas are developed and
become more widely known. Moreover, the patent position in this field is
complex, and the protection afforded by patents in any particular jurisdiction
can be limited.
The Company cannot predict the extent to which any of the products currently in
the course of development or registration may become commercially viable.
Assuming that marketing authorisation approval is granted for the Invicorp(TM)
within a reasonable time, it is hoped that this product will then be available
for marketing in the United Kingdom by the fourth quarter of 1998. In the case
of Invicorp(TM) in particular, certain competing products have been or are being
developed for the indication being pursued by the Company and in particular,
three other US companies - Pharmacia & Upjohn, (Caverject); Pfizer Inc. (Viagra)
and VIVUS Inc. (MUSE) - have developed, and/or are marketing in certain
territories, products that compete in the same market place as Invicorp(TM).
There are indications that there should be a substantial potential demand for a
product in this field but there can be no assurance that the Company will be
successful in penetrating this potential market.
With regard to Reliaject(TM), there are already a number of auto-injection
devices and other syringes on the market and there are two direct competitors
whose products are being used extensively, mainly in the US.
6
<PAGE>
For regulatory approval purposes, auto-injection devices have to be identified
with the medicinal compound that they are designated to deliver. In the
opinion of the Company and based upon the extensive clinical trials conducted in
the UK where the Reliaject(TM) device was used for the delivery of Invicorp(TM);
Reliaject(TM), which utilizes a standard glass dental cartridge to hold a drug
in a 29 gauge needle to reduce pain on injection; is of an extremely high
standard and capable of competing successfully with products currently on the
market and one which can, after instruction, be utilized by the patient without
medical supervision.
In the case of CCSI, bearing in mind that the vast health and beauty care market
is dominated by large multi-national organizations, who have far greater
resources and market exposure than the Company and CCSI, CCSI's products are
designed to meet specific niche segments of the market. CCSI's products include
the Mill Creek line, which features the kinetin compound, Sleepy Hollow
Botanticals and Biotene H-24. The speciality mass market lines are Silver Fox -
a product for gray hair, and the Allercreme, hypoallergenic range for sensitive
skins, that was developed in conjunction with dermatologists. The DuBarry range,
a long established cosmetic line acquired from Carme Inc., was sold during 1997.
The Mill Creek range, including kinetin, has been launched as a next generation
skin care product, and is designed to replace alpha hydroxy acid lines, marketed
by other organizations, as a product of choice. However, major companies may
introduce competitive lines of similar or superior quality and may be able to
effect a greater marketing impact than the Company can achieve.
GOVERNMENT REGULATION
The Company's research and development activities and future product
manufacturing and marketing activities are subject to extensive regulation for
safety and efficacy by numerous governmental authorities in the United States
and Europe. In the US, drugs are subject to rigorous regulation by the FDA. The
Federal Food, Drug and Cosmetic Act and the Public Health Service Act governs
the testing, manufacture, safety, efficacy, labelling, storage, record keeping,
approval, advertising, and promotion of the Company's products in the US.
Product development and approval within this regulatory framework takes a number
of years and involves the expenditure of substantial resources. Many products
ultimately do not reach the market because of toxicity or lack of effectiveness
as demonstrated by required testing. In addition, there can be no assurance that
this regulatory framework will not change or that additional regulations will
not arise at any stage of the Company's product development that may affect
approval, delay an application, or require additional expenditures by the
Company. After approval is obtained, failure to comply with present or future
regulatory requirements, or new information regarding the safety or
effectiveness of an approved drug, can lead to FDA withdrawal of approval to
market the product.
The steps required before a pharmaceutical product may be marketed in the United
States include (i) preclinical laboratory testing, (ii) submission to the FDA of
an IND application which must become effective before human clinical trials may
be commenced, (iii) adequate and well-controlled human clinical trials to
establish the safety and efficacy of the drug, (iv) submission of an NDA to the
FDA and (v) FDA approval of the NDA prior to any commercial sale or shipment of
the drug. To date, the Company has submitted and received IND status for its
Invicorp(TM) product.
Clinical testing of new compounds in humans is designed to establish both safety
and efficacy in treating a particular disease or condition. These studies are
usually conducted in three phases of testing. In Phase I, a small number of
volunteers are given the new compound in order to identify toxicities and
characterize the compound's behaviour in humans. In Phase II, small numbers of
patients with the targeted disease are given the compound to test its efficacy
in treating the targeted disease and to establish effective dose levels. Phase
III studies, which have been concluded by the Company for Invicorp(TM), are
large-scale studies designed to confirm a compound's efficacy for the targeted
disease and identify toxicities that might not have been seen in smaller
studies. Once adequate data has been obtained in clinical testing to demonstrate
that the compound is both safe and effective for the intended use, all available
data will need to be submitted to the FDA as part of the NDA. Review of this
application by the FDA can cover an extended period.
Marketing of products requires regulatory approval from the relevant medicines
evaluation agency in a particular country. No action can be taken to market any
product in a country until an appropriate
7
<PAGE>
application has been approved by the regulatory authorities in that country. The
current approval process varies from country to country, and the time spent in
gaining approval varies from that required for FDA approval. The review of
clinical studies by regulatory agencies in other jurisdictions follows a similar
a process to that in the US and the Company anticipates a number of approvals in
Europe during 1998. Following on from these approvals will be the choice of a
rapporteur country for Pan European licensing approval.
In certain European countries, the sales price of a product must also be
approved. The pricing review period often begins after market approval is
granted. No assurance can be given that, even if a product is approved by a
regulatory authority, satisfactory prices will be approved for such product.
Under current regulations, the market introduction of the majority of
non-medicated cosmetics and skin care products do not require prior formal
registration or approval by the FDA, although this could change in the future.
The Cosmetics Division of the FDA monitors matters of safety and adulteration.
The situation for non-medicated cosmetic and skin care products is the same for
Europe.
IMPORT RESTRICTIONS AND DUTIES
Because the Company may be importing certain of its products or product
ingredients into the United States, the Company could be subject to quantity
limitations, duties and tariffs imposed by a country within which the products
are to be sold. The United States does not have quantity restrictions for goods
such as the Company's proposed products but does impose tariffs based on the
value of the products imported. Other countries may have different restrictions
and duties.
PATENTS
The Company believes that patents and other proprietary rights are an essential
element of its business and as part of its grant agreements with various
researchers, has received exclusive license rights to any commercially valuable
products developed by the contracted researchers within the scope of the
respective agreements in exchange for royalty entitlements. The Company's policy
is to file patent applications to protect inventions and improvements that are
considered important to the development of its business. Typically, patents
expire 19 years after the grant date. The Company also relies upon trade
secrets, know-how, continuing technological innovations and licensing
opportunities to develop and maintain its competitive position. The Company has
filed patent applications for its products in most major countries including
those that are signatories to the Patent Conference Treaty ("PCT"). Thus far,
Reliaject(TM) is patented in most PCT countries and in major areas in Asia and
South America, and additionally the Company has received patent approvals
covering its technology for the treatment of the effects of aging on skin in the
US, and for the treatment of psoriasis and other hyper-proliferative skin
diseases in the US, Canada and Australia and male sexual dysfunction in the US,
Australia, Czech Republic, Hungary, Israel, Latvia, Lithuania, Mexico and
Taiwan.
Patent positions generally, including those for pharmaceutical and health
service organizations such as the Company, are uncertain and involve complex
legal and factual questions for which important legal principles are largely
unresolved. In addition, the coverage claimed in a patent application can be
significantly reduced before a patent is issued. Consequently, the Company
cannot be sure that any patents that are or may be issued to it will provide
significant proprietary protection or will not be circumvented or invalidated.
Because patent applications in the United States are maintained in secrecy until
patents issued, and publication of discoveries in the scientific or patent
literature often lags behind actual discoveries, the Company cannot be certain
that it or any licensor was the first creator or that it or such licensor was
the first to file patent applications for such inventions. Moreover, the Company
might have to participate in interference proceedings declared by the US Patent
and Trademark Office to determine priority of inventions, which could result in
substantial cost to the Company, whether or not the eventual outcome were
favorable to the Company. There can be no assurance that the Company's patents,
if issued, would be held valid by a court or that a competitor's technology or
product would be found to infringe such patents.
A number of pharmaceutical and health services companies and research and
academic institutions have developed technologies, filed patent applications, or
received patents in areas that may be related to the
8
<PAGE>
Company's business. Some of these technologies applications, or patents may
conflict with the Company's development efforts or patent applications.
CCSI has acquired the numerous trademarks formerly owned by Carme Inc. To the
best of CCSI's knowledge, there has been no indication to date that such
trademarks are invalid or are subject to challenge.
Typically, the Company requires its employees, consultants and sponsored
researchers to execute confidentiality agreements as part of their employment,
consulting or research arrangements with the Company. There can be no assurances
however, that these agreements will produce meaningful or adequate protection
for the Company's trade secrets.
EMPLOYEES
As of December 31, 1997 Senetek, together with its two subsidiaries SDDT and
CCSI, employed 44 full-time employees. Corporate employees comprise 6 persons in
the United Kingdom of whom 4 are employed at the Company's drug development
center at Kettering, and 5 in the US, of whom 3 are employed in the Research
center in St Louis and 2 in the executive offices in Napa. SDDT Corporation
employed 7persons in the US, who concentrate on the scientific, engineering and
production aspects of Reliaject(TM). CCSI has 26 employees covering the
production, marketing, advertising and distribution of CCSI's products,
including a team covering the management and financial aspects of CCSI's
business.
PROPERTIES
The Company occupies office space at its registered office in London for the
Finance Director/Corporate Secretary and his financial and administrative staff.
These premises are held under a 3 year lease terminating in March, 1999.
In April 1997 the Company surrendered its lease for the ground floor of Unit
1400 Montague Court, Kettering, UK and entered into a new agreement for the
complete Unit 1400. The term of the lease is 15 years with a break option after
5 years. At the present time part of the first floor is sub-let to a company
which is not affiliated with Senetek, for a term of 3 years. The Kettering
office accommodates Invicorp(TM) development, clinical monitoring and regulatory
staff and maintains inventories of Invicorp(TM) prior to delivery to clinical
trials or named-patient sales.
Through its subsidiary SDDT, the Company occupied manufacturing, warehousing,
design and office space in Maryland Heights, Missouri, for use by SDDT for the
development and production of the Company's syringe during 1997, under the terms
of a lease terminating on May 31, 2000.
Through its subsidiary CCSI, the Company occupied office space, production space
and warehouse space in Novato, California, for the manufacture and marketing of
CCSI's cosmetic products, under the terms of two three-year leases terminating
in October and November 1998.
The above mentioned leases for the SDDT and CCSI companies in St. Louis and
Novato have now been surrendered. These business entities have been combined
into a new 40,000 square foot facility in Napa, California with effect from the
beginning of 1998. The Napa lease is for a 10 year term, expiring on December 1,
2007.
The Company has entered into a lease for a small laboratory facility in a
Medical Center in St Louis for its Scientific Research staff, concentrating
mainly on the identification and potential development of new product lines.
9
<PAGE>
LEGAL PROCEEDINGS
An unsupported claim arising from the termination of an agreement covering the
distribution of the kinetin product in certain countries in the Far East has
been made by the proposed distributor. The Company maintains that the terms of
the agreement have not been complied with, and whilst the proposed distributor
has contested the termination, no formal action has been taken such as a request
for mediation with the American Arbitration Association.
THE OFFERING
- ------------
Ordinary Shares ("Shares") represented by
American Depository Share ("ADS")
being registered ............................. 3,428,572 Shares 5p par value
Ordinary Shares outstanding and to be
Outstanding after this registration
assuming all Warrants, are exercised ......... 56,052,043 Shares 5p par value
Use of Proceeds .............................. Senetek will not receive any
proceeds from the sale of Shares
pursuant to the offering unless
warrants are exercised. In that
event, proceeds received will be
used for working capital, and
general corporate purposes.
NASDAQSM Small Cap Market Symbol ............. SNTKY
- --------------------------------------------------------------------------------
10
<PAGE>
RISK FACTORS
See "Risk Factors" beginning on page 13 for a description for certain
risks relevant to an investments in the Ordinary Shares.
SUMMARY FINANCIAL DATA
The summary historical financial data presented below for each of the
five fiscal years ended December 31, have been extracted from "Selected
Financial Data" beginning on page 19. The summary historical data presented
below for the six months ended June 30, 1997 and June 30, 1998, were derived
from Senetek PLC's Unaudited Condensed Financial Statements which contain all
accruals and adjustments (consisting only of normal recurring adjustments) which
management considers necessary for a fair presentation of the financial
information for such periods. The results of operations for the six months
ended June 30, 1998, are not necessarily indicative of the operating results
that may be expected of the full fiscal year. This financial data should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations", the Financial Statements and Notes thereto, the
Unaudited Condensed Financial Statements and Notes thereto and the other
financial information incorporated in this Prospectus by reference.
THE REMANDER OF THIS PAGE INTENTIONALLY LEFT BLANK
- --------------------------------------------------------------------------------
11
<PAGE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, (UNAUDITED)
IN $ THOUSANDS,
EXCEPT PER SHARE
AMOUNTS
FISCAL FISCAL FISCAL FISCAL FISCAL JUNE 30, JUNE 30,
1993* 1994* 1995 1996 1997 1997 1998
----- ----- ---- ---- ---- ---- ----
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue 508 212 1,931 6,486 5,722 3,103 2,772
Gross Profit 508 201 739 2,846 1,734 1,063 1,102
Net Loss (2,338) (2,982) (3,721) (4,020) (15,539) (4,590) (6,406)
Net Loss (0.07) (0.08) (0.09) (0.10) (0.32) (0.10) (0.12)
Per Ordinary
Share Outstanding
Total Assets 11,563 9,761 7,905 9,841 13,401 13,543 10,363
Accumulated (23,214) (26,196) (29,917) (33,937) (49,476) (38,527) (55,878)
Deficit
Stockholder Equity 10,911 9,203 6,745 6,263 5,506 11,213 3,246
<FN>
* Does not reflect consolidated figures of CCSI which was acquired in
September 1995.
</FN>
</TABLE>
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
12
<PAGE>
RISK FACTORS
INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE AND SUBJECT TO NUMEROUS
AND SUBSTANTIAL RISKS. THEREFORE, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER RISK FACTORS TO THE BUSINESS OF THE COMPANY AND THE PURCHASE OF THE
ORDINARY SHARES ("SHARES") REPRESENTED BY AMERICAN DEPOSITORY SHARES (ADSS),
EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS (ADRS) INCLUDING, BUT NOT LIMITED TO,
THOSE RISK FACTORS DISCUSSED BELOW. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR
OWN LEGAL, FINANCIAL AND BUSINESS ADVISORS PRIOR TO MAKING THEIR INVESTMENT
DECISION. THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27(A) OF THE SECURITIES ACT AND SECTION 21(E) OF THE
SECURITIES & EXCHANGE ACT OF 1934 THAT INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES. WHEN USED IN THIS PROSPECTUS, THE WORDS "ANTICIPATE", "BELIEVE",
"ESTIMATE", "EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO THE COMPANY OR
ITS MANAGEMENT ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THE
COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY
FROM THE RESULTS EXPRESSED IN, OR IMPLIED BY, THESE FORWARD-LOOKING STATEMENTS.
MANY FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCES OR ACHIEVEMENTS OF THE
COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCES OR
ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS, INCLUDING, AMONG OTHERS, CHANGES IN GENERAL ECONOMIC AND BUSINESS
CONDITIONS, LOSS OF MARKET SHARE THROUGH COMPETITION, INTRODUCTION OF COMPETING
PRODUCTS AND SERVICES BY OTHER COMPANIES, PRESSURE ON PRICES FROM COMPETITION OR
FROM PURCHASERS OF THE COMPANY'S PRODUCTS AND SERVICES, LACK OF ACCEPTANCE OF
NEW PRODUCTS OR SERVICES BY THE COMPANY'S TARGETED CUSTOMERS, CHANGES IN
INDUSTRY CAPACITY, CHANGES IN BUSINESS STRATEGY, THE AVAILABILITY OF CAPITAL ON
ACCEPTABLE TERMS AND VARIOUS OTHER FACTORS BOTH REFERENCED AND NOT REFERENCED IN
THIS PROSPECTUS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE THOSE DISCUSSED BELOW.
1. HISTORY OF LOSSES; QUALIFIED OPINIONS OF ACCOUNTANTS. Although the
Company was formed approximately 15 years ago in October 1983, it is still
subject to all of the risks inherent in the establishment of a new business
enterprise. The likelihood of the success of the Company must be considered in
light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with the formation of the development of
new products and the competitive and regulatory environment in which the Company
is operating. It has only produced $ 18,218,000 in revenues and has cumulative
losses of $55,882,000 ( including a net loss of $15,539,000 in fiscal 1997).
Because its MSD product is estimated to be at least 10 to 12 months away from
being marketed, there can be no assurance that marketing will begin when the
Company contemplates or that sales from its other products will rise to a level
that will allow it to operate profitably in the fiscal year ending December 31,
1998. The report of the Company's independent certified public accountants on
Senetek's financial statements for the year ended December 31, 1997 states that
Senetek's losses, cash flow deficits and other factors raise substantial doubts
about the Company's ability to continue as a going concern.
13
<PAGE>
2. POSSIBLE NEED FOR ADDITIONAL FINANCING. Although the Company
believes that the proceeds from its credit line financing arrangement with
Windsor Capital, Inc. ("Windsor") will enable the Company to meet its cash
requirements for the next 12 months, depending on how quickly the revenues
increase and what are its future product development costs, the Company could
require additional funds prior to the end of that 12-month period. In the event
that Windsor does not elect to exercise any of the warrants granted to it, then
in that event, the Company will be required to repay the amount due plus
interest on the line of credit utilized by the Company. There is no assurance
that Windsor will exercise all or any portion of the warrants during the term of
the warrants depending upon the trading market for the Company's ADS's. The
Company's cash requirements have been and will continue to be significant. The
Company may endeavor to obtain additional financing through the sale of equity
securities in the Company. In the event that the Company is unable to obtain
adequate funding, or the costs of development and operations prove greater than
anticipated, the Company could be required to curtail its operations or to seek
alternative financing arrangements. There can be no assurances that such
additional financing, if available, will be on terms acceptable to the Company.
If the Company's cash requirements cannot be successfully addressed, there would
be a material adverse effect on the Company's business, its financial condition
and results of operations. Shareholders may experience substantial dilution.
3. PRODUCT RESEARCH AND TECHNOLOGICAL OBSOLESCENCE. The Company is
engaged in a field characterized by extensive research efforts. Despite the
Company's current access to leading expertise in the field, there remains a risk
that the research financed by the Company in the future could prove
unproductive. Furthermore, there can be no assurance that research and
discoveries by other companies will not render the Company's programs
superfluous or obsolete.
4. PROPRIETARY TECHNOLOGY. The protection afforded by patents in the
biotechnology and biomedical fields can be limited. Other persons or
institutions may be simultaneously developing products similar to those being
developed by the Company. Therefore, future licenses and patents, which might be
applied for, might not afford significant infringement protection to the
Company. Future licenses and patents will not necessarily preclude competitors
from developing products which can be marketed in competition with those which
may be developed for the Company and thus substantially lessen the value of the
Company's proprietary positions. Moreover, persons or institutions which develop
similar products could make claims that the Company's proprietary rights
actually belong in whole or in part to such claimants. If one or more of such
claims were to arise, the Company might face a possibility that it might not
prevail in any ensuing legal action and, also, that it might not be able to
afford the expense of any litigation which may be necessary to enforce its
patent or proprietary rights.
Patent positions generally, including those for pharmaceutical and
health service organizations such as the Company, are uncertain and involve
complex legal and factual questions for which important legal principles are
largely unresolved. In addition, the coverage claimed in a patent application
can be significantly reduced before a patent is issued. Consequently, the
Company cannot be sure that any patents that are or may be issued to it will
provide significant proprietary protection or will not be circumvented or
invalidated. Because patent applications in the United States are maintained in
secrecy until patents are issued, and publication of discoveries in the
scientific or patent literature often lags behind actual discoveries, the
Company cannot be certain that it or any licensor was the first creator or that
it or such licensor was the first to file patent applications for such
inventions. Moreover, the Company might have to participate in interference
proceedings declared by the US Patent and Trademark Office to determine priority
of inventions, which could result in substantial cost to the Company, whether or
not the eventual outcome were favorable to the Company. There can be no
assurance that the Company's patents, if issued, would be held valid by a court
or that a competitor's technology or product would be found to infringe such
patents.
A number of pharmaceutical and health services companies and research
and academic institutions have developed technologies, filed patent
applications, or received patents in areas that may be related to the Company's
business. Some of these technologies applications, or patents may conflict with
the Company's development efforts or patent applications. CCSI has acquired the
numerous trademarks formerly owned by Carme Inc. To the best of CCSI's
knowledge, there has been no indication to date that such trademarks are invalid
or are subject to challenge.Typically, the Company requires its employees,
consultants and sponsored researchers to execute confidentiality agreements as
part of their employment,
14
<PAGE>
consulting or research arrangements with the Company. There can be no assurances
however, that these agreements will produce meaningful or adequate protection
for the Company's trade secrets.
5. TRADEMARK AND SERVICEMARK PROTECTION FOR THE COMPANY. The Company
has acquired certain trademarks in various countries in which the Company's
products are sold. Although to date no claims have been brought against the
Company alleging that it infringes the intellectual property rights of others,
there can be no assurance that such claims will not be brought against the
Company in the future, or that if made, such claims will not be successful. In
addition to any potential monetary liability for damage, the Company could be
required to obtain a license in order to continue to use the trademarks in
question or could be enjoined from using such trademarks if such a license were
not made available on acceptable terms. If the Company becomes involved in such
litigation, it may divert significant resources, which could have a material
adverse effect on the Company and its results or operations and, if such a claim
were successful, the Company's business could be materially adversely affected.
6. GOVERNMENTAL REGULATION. Most of the Company's activities will be
subject to some kind of governmental regulation by numerous governmental
authorities in the United States and Europe for safety and efficacy. As for
example, approval by the FDA in the United States. Approval or other clearance
by the FDA is required for clinical trials and for commercial distribution of
some of the Company's products in the United States regardless of whether the
products are dispensable by prescription or over-the-counter. Lengthy and
detailed laboratory and clinical testing procedures, sampling activities and
other costly and time consuming procedures may be required. Failure to obtain
FDA clearances, when necessary, or failure of clinical trials to demonstrate
safety or efficacy would prevent the Company from marketing the products in the
United States. In addition, the Company will be subject to any quantity
limitations, duties and tariffs imposed by countries within which the Company's
products will be sold.
7. IMPORT RESTRICTIONS AND DUTIES. Because the Company may be importing
certain of its product ingredients into the United States, the Company could be
subject to quantity limitations, duties and tariffs imposed by a country within
which the products are to be sold. The United States does not have quantity
restrictions for goods such as the Company's proposed products but does impose
tariffs based on the value of the products imported. Other countries may have
different restrictions and duties.
8. COMPETITION. Competition in the biotechnology and biomedical fields
and in the cosmetics industry is intense and is expected to increase. A major
company has developed and begun marketing in the United States and Europe a
product that competes with the MSD product. Many of the companies in the
biotechnology and biomedical fields and the cosmetic industry have substantially
greater research and development, marketing, financial and human resources than
the Company and, accordingly, may provide significant long-term competition.
Additionally, the Company competes in the retail cosmetics and personal care
products industry. The industry comprises large discount chains, independent
discount outlets, department stores, supermarkets, drugstores, direct marketers
and specialty retailers, and the Company competes with all of these sellers of
personal care products. The Company's competitors and potential competitors have
substantially greater resources, including capital, research and development
personnel and manufacturing and marketing capabilities, and also may offer well
established broad product lines. Some of the Company's competitors have
long-term or preferential supply arrangements with established retailers. Such
arrangements may act as a barrier to market entry. There can be no assurance
that the Company will be able to compete successfully.
9. EXPOSURE TO LIABILITY FOR THE COMPANY'S PRODUCTS. During recent
years, lawsuits resulting in very substantial liability have been filed against
companies engaged in the manufacture of pharmaceutical and other medical-related
products or devices which have subsequently proved harmful to human health. Many
of these cases have exposed companies to liability long after the products have
been brought to market, even though, at the time of their development, based on
extensive research, there were no perceived risks of injury. Thus,
notwithstanding FDA or other foreign governmental approval, there can be no
assurance that the Company will not be subject to liability from the use of its
products. There is no assurance that product liability coverage will be adequate
to protect against future claims. Management intends to have third parties
manufacture and distribute certain of the Company's products in an effort to
lessen the Company's exposure to liability. However, there can be no assurance
that this result will be achieved, and that the Company will not be faced with a
substantial financial exposure and the costs and expenses attendant to
protracted legal liability and legal actions.
15
<PAGE>
The Company is subject to the risk of products liability claims
related to the use of its products which are designed for application to human
hair and skin. The Company carries product liability insurance; however, there
can be no assurance that existing or future insurance coverage will be
sufficient to cover any possible product liability risks or that such insurance
will continue to be available to the Company on economically feasible terms.
10. CURRENCY FLUCTUATIONS. The Company maintains its financial records,
and holds the majority of its money, in United States dollars and English pounds
sterling. In the past, the pound has fluctuated in value relative to the dollar.
Amounts paid to the Company may be payable in various currencies, which are
subject to independent fluctuating exchange rates with the dollar and the pound.
In the event of a devaluation in a particular currency between the time that any
purchase price is due and the time such income is received and converted by the
Company into dollars or pounds, the Company may suffer an exchange loss which
could materially and adversely affect the Company's revenues.
11. RELIANCE ON SUPPLIERS. Although the Company contracts out
manufacture of a majority of its own products, it purchases raw materials from
third-party suppliers. The Company does not presently have any long-term
contracts with these suppliers, and, as a consequence, any of these
relationships may be terminated by either party at any time. Although the
Company believes that other suppliers are available who can produce similar
materials and products, there can be no assurance that such materials would be
available to the Company on an immediate basis if needed, or at prices similar
to those now paid by the Company.
12. TAXATION. Revenues of the Company earned in the various countries
wherein the Company intends to do business may be subject to taxation by more
than one jurisdiction, thereby affecting the Company's earnings.
13. DEPENDENCE ON KEY PERSONNEL. The Company is dependent, in
particular, upon the services of Mr. Anthony Cataldo, its Chief Executive
Officer, Dr. Gerlof Homan, its Chief Scientific Advisor, Mr. Clifford Brune, its
Chief Operating Officer, Mr. Paul Logan, its Company Secretary and the former
Chief Financial Officer. If Mr. Cataldo, Dr. Homan, Mr. Brune, and Mr. Logan
were unable to provide their services to the Company for whatever reason, the
Company's business could be adversely affected. Since these executives are
involved in most aspects of the Company's business, there can be no assurance
that suitable replacements could be found if they were unable to perform
services for the Company. In addition, the Company's ability to market its
products and fulfill its business plan will depend, in large part, upon its
ability to attract and retain qualified personnel in its field. Competition for
such personnel is intense and there can be no assurance that the Company will be
able to attract or retain such personnel.
14. DIVIDENDS NOT LIKELY. There can be no assurance that existing or
proposed operations of the Company will result in significant revenues or any
level of profitability. Any earnings that may be generated, of which no
assurance can be given, will be used in the foreseeable future to finance the
growth of the Company's business. No dividends have been declared or paid by the
Company, and the Company does not presently intend to declare or pay cash
dividends for common stock in the foreseeable future.
15. SECURITIES ISSUABLE UPON EXERCISE OF OPTIONS AND WARRANTS. As of
May 15, 1998, the Company had approximately 54,444,927 issued and outstanding
Ordinary Shares, and 5,211,000 options to purchase 5,211,000 Ordinary Shares, as
well as 1,538,871 warrants to purchase 1,538,871 Ordinary Shares. As a result of
the credit line granted to the Company by Windsor Capital, Inc. (Windsor),
Windsor or its designees received the right upon the Company electing to draw
down in the Windsor credit line to receive up to 2,857,143 Warrants convertible
at $3.50 to purchase 2,857,143 Ordinary Shares and 571,429 Warrants convertible
at $6.00 to purchase 571,429 Ordinary Shares. Each Ordinary Share is represented
by a like number of ADSs which trade on the NASDAQSM Small Cap Market under the
symbol SNTKY. The exercise by the Company of the credit line can result in the
issuance of a total of 3,428,572 warrants to purchase Ordinary Shares which are
included in the present registration. The issuance of additional Ordinary Shares
may result in a substantial dilution to shareholders of the Company.
16. RISK RELATING TO SPONSORED RESEARCH AND LICENSE AGREEMENTS. The
Company may incur significant financial commitments to academic collaborators in
connection with potential
16
<PAGE>
licenses and sponsored research agreements. Typically, in academic
collaborations, a company generally does not have the right to control the
research being conducted pursuant to sponsored research agreements and there can
be no assurance that such research will result in products which a company will
pursue. There can be no assurance that funds designated for future research
through academic collaborations by the Company will be used to conduct research
relating to products which the Company desires to pursue. Additionally, to the
extent that such research results in technologies may not be licensed to the
Company, it may be necessary to negotiate additional license agreements or the
Company may be unable to utilize such technologies.
17. POSSIBLE DELISTING OF SECURITIES FROM THE NASDAQ(SM) STOCK MARKET.
While the Stock represented by ADSs meets the current NASDAQ(SM) listing
requirements, there can be no assurance that the Company will meet the criteria
for continued listing. Continued inclusion on NASDAQ(SM) generally requires that
(i) the Company maintain at least $2,000,000 in net tangible assets, a
$35,000,000 market capitalization or net income of at least $500,000 in two of
the three prior years, (ii) at least 500,000 shares in the public float valued
at $1,000,000 or more, (iii) a minimum Common Stock bid price of $1.00, (iv) at
least two active market makers, and (v) at least 300 shareholders of Stock. If
the Company is unable to satisfy NASDAQ(SM)'s maintenance requirements, its
securities may be delisted from NASDAQ(SM). In such event, trading, if any, in
the Stock would thereafter be conducted in the over-the-counter market in the
so-called "pink sheets" or the NASD's "Electronic Bulletin Board." Consequently,
the liquidity of the Company's securities could be impaired, not only in the
number of securities which could be bought and sold, but also through delays in
the timing of transactions, reduction in security analyses and the news media's
coverage of the Company and lower prices for the Company's securities than might
otherwise be attained.
18. RISKS OF LOW-PRICED STOCK. If the Company's securities were
delisted from NASDAQSM (See "Possible Delisting of Securities from the NASDAQSM
Stock Market" risk factor 17), they could become subject to Rule 15g-9 under the
Exchange Act, which imposes additional sales practice restrictions on
broker-dealers that sell such securities except in transactions exempted by such
Rule, including transactions meeting the requirements of Rule 505 or 506 of
Regulation D under the Securities Act and transactions in which the purchaser is
an institutional accredited investor (as defined) or an established customer (as
defined) of the broker or dealer. For transactions covered by this rule, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. Consequently, such rule may adversely affect the ability of broker-dealers
to sell the Company's securities and may adversely affect the ability of
purchasers in this offering to sell any of the securities acquired hereby in the
secondary market.
Commission regulations define a "penny stock" to be any non- NASDAQSM
equity security that has a market price (as therein defined) of less than $5.00
per share or with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction by a broker-dealer involving a penny
stock, unless exempt, the rules require delivery, prior to any transaction in a
penny stock, of a disclosure schedule prepared by the Commission relating to the
penny stock market. Disclosure is also required to be made about commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements are required to be
sent to the security holder disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
The foregoing required penny stock restrictions will not apply to the
Company's securities if such securities continue to be listed on NASDAQSM and
have certain price and volume information provided on a current and continuing
basis or meet certain minimum net tangible assets or average revenue criteria.
There can be no assurance that the Company's securities will continue to qualify
for exemption from these restrictions. In any event, even if the Company's
securities were exempt from such restrictions, it would remain subject to
Section 15(b)(6) of the Exchange Act, which gives the Commission the authority
to prohibit any person that is engaged in unlawful conduct while participating
in a distribution of a penny stock from associating with a broker-dealer or
participating in a distribution of a penny stock, if the Commission finds that
such a restriction would be in the public interest. If the Company's securities
were subject to the rules on penny stocks, the market liquidity for the
Company's securities could be severely adversely affected.
USE OF PROCEEDS
The Company will not receive any proceeds from the sales of Stock by
the Selling Security Holders. In the event a warrant holder (Selling Stock
Holder) elects to exercise, then in that event the Company will receive
proceeds. If all warrants are exercised to obtain the underlying shares of Stock
included in this registration, the Company would receive approximately
$13,428,574.50. See "Selling Security Holders" for a list of those persons
and/or entities receiving the proceeds from the sales of the securities offered
hereby. In the event proceeds are received by the Company, they will be used for
the pay down of the credit line with Windsor Capital Management Ltd. (the
Selling Security Holder), working capital, and general corporate purposes.
Pursuant to an agreement with the Selling Stock Holder Senetek has
agreed to pay certain fees and expenses related to this offering and to provide
to Selling Stock Holders a cost free registration for shares underlying
warrants.
17
<PAGE>
DETERMINATION OF OFFERING PRICE
The offering price is to be determined by the market price for the
Company's Ordinary Shares represented by American Depository Shares as traded on
the NASDAQSM Small Cap Market.
DIVIDEND POLICY
Senetek has never declared or paid any cash dividends on its Ordinary
Shares and does not expect to pay cash dividends on its Ordinary Shares in the
foreseeable future. The decision whether to pay a dividend, and the amount of
such dividends will be based upon, among other things, the earnings, capital
requirements and financial conditions of the Company. Any final dividend by the
Company, either cash or stock, must be recommended by the Board of Directors and
approved by the Company's shareholders. The Board of Directors is however,
empowered to declare interim dividends. Under the English Companies Act of 1985,
a limited company may not declare or pay cash dividends while it has an
accumulated deficit. The Company had an accumulate deficit of $49,476,000 as of
December 31, 1997. Accordingly, the Company will not be in a position to
consider paying cash dividends until the accumulated deficit has been absorbed
by profits or by the application against the deficit with the approval of
stockholders and the U.K. Companies' Court, which forms a part of the Chancery
Division of the High Court, of an equivalent figure forming a part of the Share
premium on the Company's Balance Sheet.
CAPITALIZATION
The following table sets forth the actual capitalization of the Company as of
June 30, 1998. This table should be read in conjunction with the Financial
Statements and Notes thereto incorporated in this Prospectus by reference.
At June 30,
1998
----
STOCKHOLDERS' EQUITY $ 000
-----
4,404
Ordinary Shares authorized shares at 5 pence par value,
54,540,692 shares issued and outstanding
Additional paid in capital 54,677
Equity adjustment from foreign currency translation 43
(55,878)
Accumulated deficit
Total Stockholders' Equity 3,246
=====
18
<PAGE>
DILUTION
Dilution is not applicable.
SELECTED FINANCIAL DATA
The following Selected Financial Data should be read in conjunction
with the Financial Statements and Notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" incorporated in this
Prospectus by reference. The Selected Financial Data presented below under
"Statement of Operations Data" and "Balance Sheet Data" as of and for each of
the fiscal years ended December 31, 1997, 1996, 1995, 1994 and 1993 are derived
from the Financial Statements of Senetek PLC, which had been audited by Price
Waterhouse, independent accountants. The consolidated balance sheet at December
31, 1997 and 1996 and the related statements of income and cash flow for the
three years ended December 31, 1997 and notes thereto are incorporated herein by
reference to the Company's annual report on Form 10-K for the year ended
December 31, 1997. The report of Price Waterhouse which is also incorporated
herein by reference contains an explanatory paragraph relating to the Company's
ability to continue as a going concern as described in note 19 to such Financial
Statements. The Selected Financial Data presented below for the six months ended
June 30, 1998 and 1997 are derived from the unaudited Financial Statements of
the Company and in the opinion of management, contain all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the Company's financial position and its results of operations
for the unaudited interims periods. The results of the six months ended June 30,
1998 are not necessarily indicative of the results to be expected for a full
fiscal year.
THE REMANDER OF THIS PAGE INTENTIONALLY LEFT BLANK
19
<PAGE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, (UNAUDITED)
----------------------------------------------------------------------------------
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS JUNE 30, JUNE 30,
1993* 1994* 1995 1996 1997 1997 1998
----------------------------------------------------------------------------------
OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 508 212 1,931 6,486 5,722 3,103 2,772
Cost of Sales -- (11) (1,192) (3,640) (3,988) (2,040) (1,670)
Gross Profit 508 201 739 2,846 1,734 1,063 1,102
OPERATING EXPENSES:
Research & Development (1,098) (1,626) (1,925) (2,187) (5,026) (2,020) (3,249)
General & Administrative (1,268) (1,383) (1,595) (2,588) (8,067) (1,707) (3,739)
Marketing & Promotion (726) (668) (847) (1,219) (3,525) (1,510) (447)
Selling Expenses -- -- (276) (918) (742) (423) (234)
Total Operating Expenses (3,092) (3,677) (4,643) (6,912) (17,360) (5,660) (7,669)
Operating Loss (2,584) (3,476) (3,904) (4,066) (15,626) (4,597) (6,567)
Interest Income 246 534 419 34 279 64 95
Other (Expense) Income - Net -- -- 37 69 (92) 1 97
Loss on Sale of Investment -- (40) (273) -- -- -- --
Interest Expense -- -- -- (57) (100) (58) (31)
Net Loss (2,338) (2,982) (3,721) (4,020) (15,539) (4,590) (6,406)
Net Loss per Ordinary Share Outstanding (.07) (.08) (.09) (.10) (.32) (0.10) (0.12)
Weighted average Ordinary Shares 33,090 39,062 40,490 41,235 49,178 46,792 53,328
outstanding
BALANCE SHEET DATA:
10,690 8,659 4,427 5,629 9,592 9,999 5,792
Total Current Assets
Total assets 11,563 9,761 7,905 9,841 13,401 13,543 10,363
Current Liabilities 572 558 1,160 1,878 7,895 2,330 6,984
Total Stockholders' equity 10,991 9,203 6,745 6,263 5,506 11,213 3,246
Total Long Term Liabilities -- -- -- 1,700 -- -- --
Total Liabilities and Stockholders' 11,563 9,761 7,905 9,841 13,401 13,543 10,363
Equity
<FN>
* Does not reflect consolidated figures of CCSI acquisition in September, 1995.
</FN>
</TABLE>
20
<PAGE>
SELLING SECURITY HOLDERS
The following table identifies the Selling Shareholder and indicates:
the nature of any position, office or other material relationship that such
Selling Shareholder has had within the past three years with the Company (or any
of its predecessors or affiliates) and the number of Ordinary Shares owned by
the Selling Shareholder prior to the offering, the number of shares to be
offered for the Selling Shareholder's account and the number of shares and
percentage of outstanding shares to be owned by the Selling Shareholder after
completion of the offering.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Selling Security Holder Amount of Shares underlying Warrants Percentage of Shares Held by Selling
Being Offered (1) Security Holder Assuming Exercise of
Warrants and Sale of All Securities
Being Offered
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Windsor Capital, Inc. 3,428,572 0
- ---------------------------------------------------------------------------------------------------------------
<FN>
1 Represents Ordinary Shares underlying 2,857,143 warrants exercisable at
$3.50 per warrant and 571,429 warrants exercisable at $6.00 per
warrant. Each Ordinary Share is represented by one American Depository
Share evidenced by an American Depository Receipt. Warrants are granted
pursuant to the terms of a Credit Line Finance Agreement between the
Company and Windsor Capital Inc.
</FN>
</TABLE>
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
None.
PLAN OF DISTRIBUTION
The Company is registering the Securities on behalf of the Selling
Security Holders. All costs, expenses and fees in connection with the
registration of the Securities offered hereby will be borne by the Company.
Brokerage commissions, if any, attributable to the sale of the Securities will
be borne by the Selling Security Holders.
Sales of Securities may be effected from time to time in transactions
(which may include block transactions) on the NASDAQSM SmallCap Market, in
negotiated transactions, or a combination of such methods of sale, at fixed
prices, at market prices prevailing at the time of sale, or at negotiated
prices. The Selling Security Holders may effect such transactions by selling
Securities directly to purchasers or to or through broker-dealers which may act
as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions, or commissions from the Selling Security Holders
and/or the purchasers of Securities for whom such broker-dealers may act as
agents or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
Selling Security Holders and any broker-dealers that act in connection with the
sale of the Securities might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act and any commission received by them and
any profit on the resale of the Securities as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Security Holders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the Securities Act. Liabilities
under the federal securities laws cannot be waived.
Because the Selling Security Holders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, the
Selling Security Holders will be subject to prospectus delivery requirements
under the Securities Act. Furthermore, in the event of a "distribution" of the
shares, such Selling Security Holder, any selling broker or dealer and any
"affiliated purchasers" may be subject to Regulation M under the Exchange Act,
which Regulation would prohibit, with certain exceptions, any such person from
bidding for or purchasing any security which is the subject of such distribution
until his participation in that distribution is completed. In addition,
Regulation M also prohibits any bid or purchase for the purpose of pegging,
fixing or stabilizing the price of Common Stock in connection with this
offering.
21
<PAGE>
DESCRIPTION OF SECURITIES
The following are brief summaries of certain provisions of the
Company's Certificate of Incorporation, By-Laws and other documents. These
summaries are qualified in their entirety by reference to the actual documents,
copies of which may be obtained from the Securities and Exchange Commission, or
upon request, from the Company.
American Depository Receipts
The following is a summary of certain provisions of the Deposit
Agreement (the "Deposit Agreement") among the Company, The Bank of New York, as
depositary (the "Depositary"), and the holders from the time to time of Company
sponsored American Depositary Receipts (the "ADRs"). Certain other depositaries
have issued ADRs representing American Depositary Shares of the Company (the
"Unsponsored ADRs"), however the Company has not actively participated or
contracted with such depositaries. Holders of unsponsored ADRs should inspect
any deposit agreements entered into by such depositories to determine their
rights and obligations therunder. The following summary concerns only the
Company sponsored ADRs. Such summary does not purport to be complete and is
qualified in its entirety by reference to the Deposit Agreement, a copy of which
has been filed as an exhibit to the Company's initial Registration Statement on
Form F-1 (Registration No. 33-3535). Additional copies of the Deposit Agreement
are available for inspection at the Corporate Trust Office of the Depositary in
the City of New York and at the London office of the Depositary (the
"Custodian").
American Depositary Shares
ADRs evidencing American Depositary Shares (the "ADSs") are issuable by
the Depositary pursuant to the Deposit Agreement. Each ADS represents one
Ordinary Share (or evidence of rights to receive one Ordinary Share) deposited
with the Custodian. ADRs may evidence any number of ADSs. There are no
limitations on the rights of foreign owners to hold or vote securities of an
United Kingdon company under English law, however, the Articles of Association
of the Company provide that a foreign shareholder should provide an address in
the United Kingdom for service of any notices.
Deposit and Withdrawal of Shares
The Depositary has agreed that, upon deposit with the Custodian in
London of Ordinary Shares or evidence of rights to receive such Ordinary Shares
accompanied by any appropriate instrument of transfer or endorsement as may be
required by the Custodian and subject to the terms of the Deposit Agreement, the
Depositary will execute and deliver at its Corporate Trust Office, which is
presently located at 90 Washington Street, New York, New York 10015, to the
persons specified by the depositor of such Ordinary Shares, an ADR or ADRs
registered in the name of such person or persons for the number of ADSs issuable
in respect of such deposit.
Upon surrender of ADRs at the Corporate Trust Office of the Depositary,
and upon payment of the charges provided in the Deposit Agreement, ADR holders
are entitled to delivery at the office of the Custodian in London of the
certificates representing the Ordinary Shares and at such office of the
Custodian or, at the discretion of the Depositary, at the Corporate Trust Office
of the Depositary, any other property that the surrendered ADRs evidenced the
right to receive. The forwarding of share certificates and other proper
documents of title for such delivery at the Corporate Trust Office of the
Depositary in New York City will be at the risk and expense of the ADR holder.
Dividends, Other Distributions and Rights
The Depositary is required to convert into dollars, to the extent that
in its judgment it can do so on a reasonable basis, all cash dividends and other
cash distributions denominated in pounds sterling (or any other currency other
than dollars) that it receives in respect of the deposited Ordinary Shares, and
to distribute the amount received to the holders of ADRs in proportion to the
number of ADSs held by them corresponding to such Ordinary Shares. The amount
distributed will be reduced by any amounts required to be withheld by the
Company or the Depositary on account of any applicable taxes.
22
<PAGE>
If the Company declares a dividend in, or free distribution of
additional Ordinary Shares, the Depositary may cause a distribution of ADRs to
the holders of outstanding ADRs, in proportion to the number of ADSs that
represent the number of Ordinary Shares distributed. If additional ADRs are not
distributed, each ADS shall thereafter also represent the additional Ordinary
Shares distributed in respect of the Ordinary Shares represented by such ADS
prior to such distribution.
Record Dates
Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or whenever rights
shall be issued, with respect to the Ordinary Shares, the Depositary will fix a
record date for the determination of the holders of ADRs who shall be entitled
to receive such dividend, distribution or rights, or the net proceeds of the
sale thereof, or to give instructions for the exercise of voting rights at any
such meeting, subject to the provisions of the Deposit Agreement.
Voting of the Underlying Ordinary Shares
Upon receipt of notice of any meeting of holders of Ordinary Shares,
the Depositary has agreed that, as soon as practicable thereafter, it will mail
the information contained in such notice of meeting to the record holders of
ADRs. The record holders of ADRs at the close of business on the date specified
by the Depositary are entitled under the Deposit Agreement, subject to any
applicable provisions of English law and of the Memorandum and Articles of
Association of the Company, to instruct the Depositary as to the exercise of the
voting rights pertaining to the Ordinary Shares represented by the ADSs that are
evidenced by the ADRs held by such record holders. The Depositary has agreed
that it will endeavor, insofar as practicable, to vote in terms of the Ordinary
Shares so represented in accordance with such instructions.
Amendment and Termination of the Deposit Agreement
The ADRs and the Deposit Agreement may at any time be amended by
agreement between the Company and the Depositary. Any amendment that imposes or
increases any fees or charges (other than the fees of the Depositary for the
execution and delivery of ADRs and taxes or other governmental charges), or that
otherwise prejudices any substantial existing right of ADR holders, will not
take effect as to outstanding ADRs until the expiration of three months after
notice of such amendment has been given to the record holders of outstanding
ADRs. Every holder of an ADR at the time such amendment becomes effective as
aforesaid will, if such holder shall have been given such notice, be deemed, by
continuing to hold such ADR, to consent and agree to such amendment and to be
bound by the Deposit Agreement as amended thereby. In no event will any
amendment impair the right of any ADR holder to surrender the ADRs held by such
holder and receive therefor the underlying Ordinary Shares and any other
property represented thereby.
Whenever so directed by the Company, the Depositary has agreed to
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all ADRs then outstanding at least 30 days prior to the date
fixed in such notice for such termination. The Depositary may similarly
terminate the Deposit Agreement at any time 60 days after the Depositary shall
have delivered to the Company a notice of its election to resign and a successor
depositary shall have not been appointed and accepted its appointment. The
Deposit Agreement provides that the Company will use its best efforts to appoint
a successor Depositary. If any ADRs remain outstanding after the date of
termination, the Depositary thereafter will discontinue the registration of
transfers of ADRs, will suspend the distribution of dividends to the holders
thereof and will not give any further notices or perform any further acts under
the Deposit Agreement, except the collection of dividends and other
distributions pertaining to the underlying Ordinary Shares and any other
property, the sale of rights and the delivery of underlying Ordinary Shares,
together with any dividends or other distribution received with respect thereto
and the net proceeds of the sale of any rights or other property, in exchange
for surrendered ADRs. At any time after the expiration of one year from the date
of termination, the Depositary may sell the underlying Ordinary Shares and any
other property and hold the net proceeds for the pro rata benefit of the holders
of ADSs that have not heretofore been surrendered. After making such sale, the
Depositary shall be discharged from all obligations under the Deposit Agreement,
except to account for net proceeds and other cash. Upon the termination of the
Deposit Agreement, the Company will also be discharged from all obligations
thereunder, except for certain obligations to the Depositary.
23
<PAGE>
Charges of Depositary
The Company paid all charges of the Depositary in connection with the
initial issuance of the ADRs evidencing the ADSs deposited with the Custodian.
Presently, the Depositary will charge (i) any party to whom ADRs are delivered
in connection with the deposit of Ordinary Shares, and (ii) any party
surrendering ADRs in exchange for Ordinary Shares or other underlying
securities, $0.01 per issuance for each ADS and $0.03 per cancellation for each
ADS until April 1986, and $0.03 per issuance or cancellation for each ADS
thereafter evidenced by the ADRs so deposited or surrendered. The Company will
pay all other charges of the Depositary and all charges of any registrar or
co-registrar under the Deposit Agreement, including charges for issuance of ADRs
payable as a dividend or distribution or in connection with a rights offering to
sharesholders, except for taxes and other governmental charges, any applicable
transfer or registration fees on deposit or withdrawal of Ordinary Shares,
certain cable, telex, facsimile transmission and delivery charges and other
expenses that are incidential to the conversion by the Depositary of any other
currency into dollars, pursuant to the Deposit Agreement, received by the
Depositary in respect of the Ordinary Shares held on deposit.
General
Neither the Depositary nor the Company will be liable to the holders of
ADRs if prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Depositary under the Deposit Agreement are expressly limited to
performing their respective duties specified therein.
If any ADRs or ADSs evidenced thereby are listed on one or more stock
exchanges, the Depositary will act as registrar or, with the approval of the
Company appoint a registrar or one or more co-registrars, for registration of
such ADRs in accordance with any requirements of such exchanges. In carrying out
its functions, any registrar or co-registrar will be entitled to protection and
indemnity to the same extent as the Depositary. Such registrar or co-registrars
shall upon the Company's request, and may with the approval of the Company, be
removed and a substitute or substitutes appointed by the Depositary.
The ADRs are transferable on the books of the Depositary; provided that
the Depositary may close the transfer books, at any time and from time to time,
when deemed expedient by it in connection with the performance of its duties. As
a condition precedent to the execution and delivery, registration of transfer,
split-up, combination or surrender of any ADR or withdrawal of Ordinary Shares,
the Depositary or the Custodian may require payment of a sum sufficient to
reimburse it for any tax or other governmental charge and any stock transfer or
registration fee with respect thereto and payment of any applicable fees payable
by the holders of ADRs. The Depositary may refuse to execute and deliver ADRs,
register the transfer of any ADR or make any distribution of, or related to,
Ordinary Shares until it has received such proof of citizenship, residence,
exchange control approval or other information as it may deem necessary or
proper. The execution and delivery, transfer and surrender of ADRs generally may
be suspended, during any period when the transfer books of the Depositary or the
Company are closed or if any such action is deemed necessary or advisable by the
Depositary or the Company at any time or from time to time. Holders of ADRs may
inspect the list of ADR holders of the Depositary at any reasonable time ,
provided that the purpose of such inspection shall be to communicate with
holders of ADRs with respect to the business of the Company or a matter related
to the Deposit Agreement or ADRs.
LEGAL OPINION
The validity of the securities being offered hereby is being passed
upon by Baratta & Goldstein, 597 Fifth Avenue, New York, New York 10017 as to
all issues related to the United States Security Law. Trowers & Hamlins, 6 New
Square Lincoln's Inn, London WC2A 3RP England has rendered an opinion concerning
the legality of the sale of the Ordinary Shares offered hereby and certain other
matters as related to English law.
24
<PAGE>
EXPERTS
The financial statements incorporated by reference in this Prospectus
to the Company's Annual Report on Form 10-K for the year ended December 31, 1997
have been so incorporated in reliance on the report (which contains an
explanatory paragraph relating to the Company's ability to continue as a going
concern as described in note 19 to the Financial Statements) of PriceWaterhouse,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
3,428,572
ORIDINARY SHARES
5p (ENGLISH PENCE)
SENETEK PLC
------------------
PROSPECTUS
------------------
October , 1998
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN, OR INCORPORATED BY REFERENCE IN,
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF, OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE SUCH DATE.
25
<PAGE>
TABLE OF CONTENTS
PAGE
----
Available Information 2
Documents Incorporated by Reference 2
Prospectus Summary 3
Business 3
Risk Factors 13
Use of Proceeds 17
Determination of Offering Price 18
Selected Financial Data 19
Selling Security Holders 21
Certain Relationships and Related
Transactions 21
Plan of Distribution 21
Description of Securities 22
Validity of Shares 25
Experts 25
26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. (1)
Registration Fee $3,961.42
---------------------------------------------
Legal Fees and Disbursements $25,000.00
---------------------------------
Accounting Fees $46,995.00(2)
----------------------------------------------
Printing Expenses $2,500.00
---------------------------------------------
Miscellaneous $1,000.00
-------------------------------------------------
Total $82,261.42
------------------------------------------------===========
(1) All of the items except the Registration Fee are estimated.
(2) Accounting fees in U.S. dollars are estimated based upon fees of
(pound)27,750 not inclusive of VAT.
All of the expenses of this offering are being borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under English law in accordance with s310 of the Companies Act 1985 (as
amended) it is not possible for a company to exempt any of its officers, or any
person employed by the company as auditor, or to indemnify such person against
any liability which by virtue of any rule of law would otherwise attach to him
in respect of any negligence, default, breach of duty, or breach of trust, of
which he may be guilty in relation to the company. There are limited exceptions
to this rule, including:
(a) The company is permitted to purchase and maintain for any such
officer or auditor insurance against any such liability; and
(b) The company is permitted to indemnify any such officer or auditor
against any liability incurred by him in defending any legal
proceedings in which judgment is given in his favour, or he is
acquitted, or in connection with any application under ss144(3) or
(4) (concerning payments relating to nominee shares), or s727 (a
general power to grant relief in cases of honest and reasonable
conduct) in which relief is granted to him by the court.
By virtue of Article 158 of the Company's Articles of Association, the
Company shall indemnify officers of the Company out of the assets of the Company
to the extent that this is permitted by law. The Company has taken out and
maintained a policy of insurance in respect to the conduct of its Directors and
Officers on terms set out in the Policy document and the Schedules to it. This
policy is due to expire on July 31, 1999.
ITEM 16. EXHIBITS
The following exhibits are filed as part of, or incorporated by
reference into this report on Form S-3, as indicated below (footnote
explanations are at the end of the index):
3.1 Certificate of Incorporation of the Company dated October 5, 1983. 1/
3.2 Memorandum and Articles of Association of the Company (defining the
rights of security holders, subject to the provisions of the UK
Companies Act 1985). 1/
5.1 Opinion of Baratta & Goldstein as to legality. **
5.2 Opinion of Twowars & Hamlins as to legality. **
II-1
<PAGE>
10.3 Senetek No. Share Option Scheme for Employees. 2/
10.4 Asset Purchase Agreement dated as of July 31, 1995, between Carme
International, Inc., a wholly-owned subsidiary of the Company and Carme
Inc. 3/
10.18 Senetek No. 2 Executive Share Option Scheme for non-Executive Directors
and Consultants. 2/
10.29 Amended and restated Deposit Agreement dated November 6, 1992 between
the Company and The Bank of New York. 4/
10.32 Consulting Agreement dated May 1, 1994 between the Company and Dr. G.
D. Frentz. 5/
10.33 Service Agreement dated August 11, 1995 and supplemental agreement
dated July 3, 1996 between the Company and Dr. G. Homan. 6/
10.34 Service Agreement dated August 11, 1995 and supplemental agreement
dated July 3, 1996 between the Company and Mr. P. A. Logan. 6/
10.35 Service Agreement dated September 1, 1996 between the Company and Mr.
A. J. Cataldo. 7/
10.36 Service Agreement dated October 1, 1996 between the Company and Mr. C.
D. Brune. 7/
10.37 Service Agreement dated June 30, 1997 between the Company and Mr. A. J.
Cataldo. 8/
10.38 Service Agreement dated June 30, 1997 between the Company and Dr. G.
Homan. 8/
10.39 Service Agreement dated June 30, 1997 between the Company and Mr. C. D.
Brune. 8/
10.40 Service Agreement dated June 30, 1997 between the Company and Dr. R. A.
Oakes. 8/
10.41 Credit Agreement between the Company and Windsor Capital Management,
Ltd.*
13.1 Form 10-K for the fiscal year ended December 31, 1996. 9/
13.2 Form 10-K for the fiscal year ended December 31, 1997. 10/
13.3 Form 10-Q for the Quarter ended March 31, 1998. 11/
13.4 Form 10-Q and Form 10-Q/A (No. 1) for the Quarter ended June 30, 1998.
12/
21.1 Subsidiaries of the Company. 13/
23.1 Consent of Price Waterhouse. *
23.2 Consent of Baratta & Goldstein (to be included in Exhibit 5.1)
24.1 Power of Attorney. *
27.1 Financial Data Schedule year ended December 31, 1997. *
27.2 Financial Data Schedule quarter ended June 30, 1998. *
1/ Filed as an Exhibit with corresponding Exhibit Number to Registrant's
Registration Statement on Form F-1, Registration No.: 33-3535.
2/ Filed as an Exhibit with corresponding Exhibit Number to Registrant's
Report on Form S-8 on October 8, 1993, Registration No.: 33-70136.
3/ Filed as an Exhibit on Form 8-K, dated October 10, 1995 (as amended).
4/ Form of such Agreement was filed as an Exhibit on Form f-6 with the
Securities and Exchange Commission on March 19, 1992, Registration No.
33-46638.
5/ Filed as an Exhibit with corresponding Exhibit Number to Registrant's
annual Report on Form 10-K for the year ended December 31, 1994.
6/ Filed as exhibits with corresponding Exhibit Number to Registrant's
annual Report on Form 10-K for the year ended December 31, 1995 and
1996 respectively.
7/ Filed as an exhibit with corresponding Exhibit Number to Registrant's
annual Report on Form 10-K for the year ended December 31, 1996.
II-2
<PAGE>
8/ Filed as an exhibit with corresponding Exhibit Number to Registrant's
annual Report on Form 10-K for the year ended December 31, 1997.
9/ Incorporated herein by reference to the Exhibit with the same
description to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996.
10/ Incorporated herein by reference to the Exhibit with the same
description to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997.
11/ Incorporated herein by reference to the Exhibit with the same
description to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.
12/ Incorporated herein by reference to the Exhibit with the same
description to the Company's Quarterly Report on Form 10-Q and 10-Q/A
(No. 1) for the quarter ended June 30, 1998.
13/ Filed as an exhibit with corresponding Exhibit Number to Registrant's
annual Report on Form 10-K for the year ended December 31, 1995.
* Filed herein.
** To be filed by amendment.
ITEMS 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individual or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Not withstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the Calculation of Registration
Fee@ table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15 (d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, PROVIDED, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the capacities and on the dates indicated.
SENETEK PLC
By: /S/ A. J. CATALDO
---------------------------------------------
Anthony J. Cataldo, Chairman of the Board
and Chief Executive Officer
Date:October 19, 1998
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/ A. J. CATALDO Chairman of the Board, October 19, 1998
- ---------------------
Anthony J. Cataldo and Chief Executive Officer
Director
- ------------------------
Gary David Frentz
/S/ STEVEN GEORGIEU Director October 20, 1998
- ------------------------
Steven Georgieu
/S/ P.A. LOGAN Company Secretary October 20, 1998
- ---------------------
P. A. Logan and Director
/S/ STEWART SLADE Chief Financial Officer October 20, 1998
- ---------------------
S. Slade
- -------------------- Director
Uwe Thieme
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
10.41 Credit Agreement between the
Company and Windsor Capital
Management, Ltd.
23.1 Consent of Price Waterhouse
24.1 Power of Attorney
27.1 Financial Data Schedule year ended
December 31, 1997
27.2 Financial Data Schedule quarter
ended June 30, 1998
II-5
EXHIBIT 10.41
CREDIT AGREEMENT
AGREEMENT made this 28th day of April 1998, by and between SENETEK PLC, located
at 23 Palace Street, London SW1E 5HW (hereinafter referred to as "SENETEK") and
WINDSOR CAPITAL MANAGEMENT, LTD., 129 Front Street, Penthouse Suite, Hamilton
HM12, Bermuda (hereinafter referred to as "WINDSOR").
W I T N E S S E T H:
WHEREAS, WINDSOR is agreeable to providing a credit accommodation and
credit facility to SENETEK;
and
WHEREAS, SENETEK is agreeable to accepting the credit accommodation
and facility;
and
WHEREAS, the parties are desirous of expressing their rights and
obligations with respect to the credit accommodation and facility.
NOW, THEREFORE, IN CONSIDERATION OF AND FOR THE
MUTUAL PROMISES AND COVENANTS CONTAINED HEREIN AND
FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES
HERETO HEREBY AGREE AS FOLLOWS:
FIRST: WINDSOR agrees, upon execution of the within agreement, to
provide to SENETEK an unsecured credit accommodation and facility in the sum of
$10,000,000 (Ten Million Dollars) under the following terms and conditions:
(a) The credit line - facility will be unsecured and be
available to SENETEK at its option under said credit facility for a period of
two (2) years or until April 28, 2000;
(b) All loans and advances to SENETEK will be on a minimum
draw-down basis of $500,000 (Five Hundred Thousand Dollars) at the time of each
request for exercising or draw by SENETEK on the credit line as provided for
herein (SENETEK will transmit written notice of a draw down to WINDSOR); and
(c) The credit line will be made available directly from
WINDSOR, and/or at WINDSOR's option, a banking institution designated by WINDSOR
that will make such loans and advances as requested by SENETEK.
SECOND: WINDSOR warrants and represents that it will make all
contractual and/or other arrangements required by a banking or lending
institution to make the unsecured credit line available for SENETEK in the event
that WINDSOR elects to utilize a commercial bank for providing the unsecured
credit line, and that WINDSOR will be responsible for any bank or other charges
as may be incurred for the credit line availability.
<PAGE>
THIRD: The parties agree that SENETEK will have the right to utilize
said credit line and draw down at its discretion for working capital purposes,
research and development and/or acquisitions as it may deem necessary during the
term of the within agreement.
FOURTH: In consideration for providing the unsecured line of credit
herein, SENETEK agrees to issue to WINDSOR warrants to purchase ordinary shares
of SENETEK's Common Stock which are convertible into American Depository
Receipts (ADR) currently trading on the NASDAQ Small Cap market. (The issuance
of the warrants and ordinary shares are subject to both the laws of the United
Kingdom and the United States.) The warrants to be issued by SENETEK will be
equal to the amount of the minimum draw down by SENETEK divided by $3.50, which
is the exercise price of a warrant; i.e., on a minimum of $500,000 (Five Hundred
Thousand) draw down utilized by SENETEK, SENETEK agrees to issue 142,860 stock
purchase warrants to purchase one (1) ordinary share, exercisable at $3.50 per
share for a period of three (3) years from the date of said issuance to WINDSOR,
and an additional three (3) year warrant to purchase one (1) ordinary shares at
an exercise price of $6.00 per share for every five (5) warrants issued to
WINDSOR at the exercise price of $3.50 per share, so that on a minimum of
$500,000 (Five Hundred Thousand) draw down by SENETEK, in addition to the
warrants at $3.50 as stated herein, an additional warrant, exercisable at $6.00
will be issued (an additional 28,572, $6.00 warrants will be issued by SENETEK
to WINDSOR). As the parties have been negotiating the within credit arrangement
since February _____, 1998, it is agreed that the exercise price for the $3.50
warrants will be as of said date. Annexed hereto and marked Exhibit 1 and
Exhibit 2 are copies of the warrant certificates exercisable at $3.50 per share,
and at $6.00 per share.
FIFTH: SENETEK agrees that it will use its best endeavors to grant
registration rights for the underlying shares with respect to the $3.50 and
$6.00 warrants, as stated herein, within 90 days from the date of the draw down
of credit by SENETEK, and will pay all costs and expenses of registration
including, but not limited to, Securities and Exchange Commission registration
filing fees and costs, etc., to register the underlying shares with respect to
said warrants.
SIXTH: WINDSOR understands and agrees that it will provide all
reasonable cooperation to SENETEK and its counsel and provide all material
information required, in order for SENETEK to register the underlying shares for
the $3.50 and $6.00 warrants with the Securities and Exchange Commission and
State Blue Sky agencies as may be required.
SEVENTH: SENETEK represents that it will file the appropriate
disclosure forms with the Securities and Exchange Commission and the National
Association of Securities Dealers and pay the required fees to the NASD upon
issuance of the warrants to WINDSOR, as stated herein.
EIGHTH: SENETEK further agrees to provide to WINDSOR a promissory note
or notes in the form annexed to the within agreement, marked Exhibit C, upon
each draw down of any part of the credit accommodation made available by
WINDSOR.
NINTH: The parties understand and agree that SENETEK will have the
<PAGE>
right, without penalty or interest, to repay any draw down by SENETEK on the
credit line during the two (2) year term of the credit accommodation. Upon
payment of any part of the amount due to WINDSOR, WINDSOR will return the
promissory note or notes to SENETEK marked paid and cancelled.
TENTH: SENETEK warrants and represents to WINDSOR as a condition of the
credit accommodation that during the term of the within agreement, it will:
(a) Remain a duly organized and existing and good standing
corporation under the laws of the United Kingdom, and that it has the corporate
power and facility to own its properties and carry on its business, and is
further qualified to do business and is in good standing in each jurisdiction
wherein it carries on its business.
(b) That it will remain in compliance with all the Securities and
Exchange Commission rules and regulations, and that it will maintain its trading
status on the NASDAQ Small Cap Trading Market.
(c) That the execution of the within agreement and the issuance
of the warrants ($3.50 and $6.00) provided for herein, have been duly approved
and authorized by SENETEK's Board of Directors and will not violate any
provision or law or regulation as made and provided or be in violation of the
Certificate of Incorporation, By-Laws or other governmental documents with
respect to SENETEK.
(d) SENETEK has the full corporate authority and power to execute
and deliver the within agreement, promissory note or notes, warrants and any and
all other loan documents in connection with the within transaction, all of which
have been duly authorized by SENETEK's Board of Directors.
ELEVENTH: That the within transaction is not in violation of any
applicable United Kingdom or Federal, State or Local regulation or ordinance in
the United States.
TWELFTH: That within 72 hours of the date of any draw down by SENETEK
under the within agreement, SENETEK will provide a promissory note and a warrant
for the appropriate number of shares under the $3.50 and $6.00 warrants as
stated herein.
THIRTEENTH: That SENETEK is not in default under any agreement,
ordinance or resolution which could result in a material adverse effect on its
business operation or financial condition or properties.
FOURTEENTH: That the Form 10-K Report for the Fiscal Year ended
December 31, 1997 and all Form 10-Q and 8-K Reports, issued and filed by SENETEK
with the Securities and Exchange Commission which have been provided to WINDSOR,
are accurate and correct, and there are no material suits or outstanding
judgments, actions or proceedings pending against SENETEK which are not
disclosed. WINDSOR warrants and represents that it is an accredited investor, as
that term is defined by the Securities Act of 1933.
<PAGE>
FIFTEENTH: That SENETEK has filed the appropriate applications for all
trademarks, trade names, copyrights and other proprietary rights and
intellectual property owned by it.
SIXTEENTH: SENETEK agrees to maintain its books and records in a
satisfactory manner and to permit, on reasonable notice and at WINDSOR's cost
and expense, WINDSOR's agents and/or accountants, access for the purpose of
inspection of said books and records annually upon ten (10) days' written notice
to SENETEK.
SEVENTEENTH: SENETEK agrees, during the term of the within agreement
accommodation, to provide to WINDSOR a copy of all Form 10-K, 10-Q and/or 8-K
Reports within 48 hours of filing with the Securities and Exchange Commission.
EIGHTEENTH: SENETEK will, at all times during the within credit
accommodation, maintain a tangible net worth of at least $2,000,000 (Two Million
Dollars), which tangible net worth will be governed by generally accepted
accounting principals consistently applied, and that it will keep and maintain
and preserve and protect all of its proprietary rights in its patents, patent
pending trademarks and/or copyrights.
NINETEENTH: SENETEK agrees to make prompt payment of all sums due to
WINDSOR on April 27, 2000, and that any draw down of any amount of the within
credit line will be due and payable by SENETEK in the event of any of the one or
more below listed events of default prior to the due date on April 27, 2000, as
provided for herein:
(a) Failure of SENETEK to issue the $3.50 and $6.00 warrants
within a reasonable time of said draw down on the credit facility, as provided
for herein.
(b) Failure to use its best efforts to file the appropriate
registration statement with the Securities and Exchange Commission for the
underlying shares of the $3.50 and $6.00 warrants, as provided for herein.
(c) The filing of an equivalent of a Chapter 11 or Chapter 7
proceeding in the United Kingdom or the United States and/or declaration of
insolvency by SENETEK. In the event any petition is filed against SENETEK under
any insolvency law provision, SENETEK will have thirty (30) days within which to
contest said provision, and such petition shall not have been dismissed within
ninety (90) days from the date hereof.
(d) The appointment of a receiver or custodian or any trustee for
the business of SENETEK.
(e) The failure to make payment due to WINDSOR on the due date as
provided for herein, which failure remains uncured for a period of sixty (60)
days from said due date.
(f) In the event that SENETEK is suspended from trading on
<PAGE>
the NASDAQ trading market for a period in excess of thirty (30) days.
TWENTIETH: The parties agree that all notices and/or other
communications, pursuant to this agreement, be in writing, delivered by hand,
certified or registered mail, return receipt requested or facsimile, addressed
to the parties as follows:
To SENETEK: SENETEK PLC
23 Palace Street
London SW1E 5HW
With a copy to: Anthony J. Cataldo
c/o Carme International, Inc.
620 Airpark Road, Bldg. F
Napa, CA 94558
With a copy to: Baratta & Goldstein
597 Fifth Avenue
New York, NY 10017
To WINDSOR: WINDSOR CAPITAL MANAGEMENT, LTD.
129 Front Street, Penthouse Suite
Hamilton HM12
Bermuda
TWENTY-FIRST: The within agreement may not be changed, modified or
amended, unless in writing, executed by the parties herein.
IN WITNESS WHEREOF, the parties have set their hands and seals the day,
month and year first above written.
SENETEK PLC
BY: NAME OF SIGNEE
--------------------------------------
WINDSOR CAPITAL MANAGEMENT, LTD.
BY: NAME OF SIGNEE
-----------------------------------
<PAGE>
EXHIBIT 1
FORM OF $3.50 WARRANT
ORIGINAL DATE OF ISSUANCE:_________
TRANSFERABLE COMMON STOCK PURCHASE WARRANT CERTIFICATE
FOR PURCHASE OF 5P ORDINARY SHARES ("THE SHARES")
SENETEK PLC
THIS WARRANT AND ANY SHARES ISSUABLE UPON ITS EXERCISE AND THE SUBSEQUENT
CONVERSION TO AMERICAN DEPOSITARY SHARES ("ADS") REPRESENTED BY AMERICAN
DEPOSITARY RECEIPTS ("ADR"), (COLLECTIVELY THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, (THE "ACT"), AND MAY NOT BE
TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE ISSUER OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS
IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS, OR THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO U.S. UNLESS
THESE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION REQUIREMENTS OF THOSE LAWS.
VOID THREE (3) YEARS AFTER DATE OF ORIGINAL ISSUANCE
THIS IS TO CERTIFY THAT, for value received, WINDSOR CAPITAL MANGEMENT LTD OR
REGISTERED ASSIGNEE (the registered Holder), is the owner of the number of
Warrants ("Warrants") as specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Credit Agreement dated the 28th day of April 1998 (the
"Agreement"), one (1) fully paid and non-assessable 5p Ordinary share
convertible into one (1) American Depositary Share ("ADS") represented by one
(1) American Depositary Receipt ("ADR"), $.01 par value ("ADR"), of Senetek PLC,
an English Corporation (the "Company"), at any time from the original date of
<PAGE>
issuance of this Warrant and prior to the Expiration Date (as hereinafter
defined), upon the presentation and surrender of this Warrant Certificate with
the Subscription Form duly executed, at the corporate office of the Company at
23 Palace Street, London SW1E 5HW, England, accompanied by payment as follows:
The Exercise Price per share will be U.S $ , the Purchase Price payable in
lawful money of the United States of America, in cash or by official bank or
certified check, made payable to Senetek PLC. The Company will act as Warrant
Agent (the "Warrant Agent").
This Warrant Certificate, and each Warrant represented hereby, are issued
pursuant to and are subject in all respects, to the terms and conditions set
forth in the Agreement by and among the Company and WINDSOR CAPITAL MANAGEMENT
LTD. The Warrant Holder acknowledges that, in the event any term or condition of
the within Warrant is not consistent with the Agreement, then in that event, the
Agreement will be governing.
The Purchase Price or the number of ADRs, subject to purchase upon the exercise
of each Warrant represented hereby, are not subject to modifications or
adjustment.
Each Warrant represented hereby is exercisable at the option of the Registered
Holder pursuant to the terms of the Agreement, in the case of the exercise of
less than all the Warrants represented hereby, the Company shall cancel this
Warrant Certificate or Warrant Certificates of like tenor, and shall issue a new
Warrant Certificate or Warrant Certificates for the balance of the Warrants
unexercised, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5.00 p.m. (London time) on . If such date
shall in England, be a holiday or a day on which the banks are authorized to
close, then the Expiration Date shall mean 5.00 p.m. (London time) the next
following day which, in England, is not a holiday or a day on which banks are
authorized to close. The Company may, at its sole discretion, extend the
Expiration Date.
<PAGE>
This Warrant Certificate is exchangeable upon the surrender hereof by the
Registered Holder at the corporate office of the Company for a new Warrant
Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificate to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of each surrender.
Prior to the exercise of any Warrant represented hereby, the Registered Holder
shall not be entitled to any rights of a stockholder of the Company including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
The within Warrant is transferable and/or assignable upon written consent of the
Company which consent shall not be unreasonably withheld. The requisite
documentation and request for assignment must be presented to the Company and
its counsel to effect a transfer and/or assignment of said Warrant.
Upon due presentment with any tax or governmental charge imposed in connection
therewith, for registration of any transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrants Certificates, representing an
equal aggregate number of Warrants, will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant and the Agreement.
The Holder of said Warrant understands and agrees that, in order to exercise the
said Warrant, payments in U.S. dollars, as stated herein, for the exercise of
each Warrant per share must be made at the Company's offices, and that the
Warrant herein expires on .
Prior to due presentment for the registration of transfer hereof, the Company
may deem and treat the Registered Holder as the absolute owner hereof, and of
each Warrant represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of the
Company) for all purposes, and shall not be affected by any notice to the
contrary.
The within Warrant has been authorized by the Board of Directors of the Company
and that, upon exercise, the Holder may qualify under Regulation S of the
Securities Act, subject to compliance with the requirements of said Regulation
This Warrant shall be governed by and construed in accordance with the laws of
England.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its Corporate Seal to be imprinted hereon.
Date :
London, England
-----------------------------------
SENETEK PLC.
ATTEST :
By :-----------------------------------------
Director
By :-----------------------------------------
Director & Corporate Secretary
AGREED TO:
-----------------------------------
WINDSOR CAPITAL MANAGEMENT LTD.
Director
<PAGE>
EXHIBIT 2
FORM OF $6.00 WARRANT
ORIGINAL DATE OF ISSUANCE:_________
TRANSFERABLE COMMON STOCK PURCHASE WARRANT CERTIFICATE
FOR PURCHASE OF 5P ORDINARY SHARES ("THE SHARES")
SENETEK PLC
THIS WARRANT AND ANY SHARES ISSUABLE UPON ITS EXERCISE AND THE SUBSEQUENT
CONVERSION TO AMERICAN DEPOSITARY SHARES ("ADS") REPRESENTED BY AMERICAN
DEPOSITARY RECEIPTS ("ADR"), (COLLECTIVELY THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, (THE "ACT"), AND MAY NOT BE
TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE ACT SHALL HAVE BECOME
EFFECTIVE WITH RESPECT THERETO OR (2) RECEIPT BY THE ISSUER OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS
IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS, OR THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO U.S. UNLESS
THESE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION REQUIREMENTS OF THOSE LAWS.
VOID THREE (3) YEARS AFTER DATE OF ORIGINAL ISSUANCE
THIS IS TO CERTIFY THAT, for value received, WINDSOR CAPITAL MANGEMENT LTD OR
REGISTERED ASSIGNEE (the registered Holder), is the owner of the number of
Warrants ("Warrants") as specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Credit Agreement dated the 28th day of April 1998 (the
"Agreement"), one (1) fully paid and non-assessable 5p Ordinary share
convertible into one (1) American Depositary Share ("ADS") represented by one
(1) American Depositary Receipt ("ADR"), $.01 par value ("ADR"), of Senetek PLC,
an English Corporation (the "Company"), at any time from the original date of
<PAGE>
issuance of this Warrant and prior to the Expiration Date (as hereinafter
defined), upon the presentation and surrender of this Warrant Certificate with
the Subscription Form duly executed, at the corporate office of the Company at
23 Palace Street, London SW1E 5HW, England, accompanied by payment as follows:
The Exercise Price per share will be U.S $ , the Purchase Price payable in
lawful money of the United States of America, in cash or by official bank or
certified check, made payable to Senetek PLC. The Company will act as Warrant
Agent (the "Warrant Agent").
This Warrant Certificate, and each Warrant represented hereby, are issued
pursuant to and are subject in all respects, to the terms and conditions set
forth in the Agreement by and among the Company and WINDSOR CAPITAL MANAGEMENT
LTD. The Warrant Holder acknowledges that, in the event any term or condition of
the within Warrant is not consistent with the Agreement, then in that event, the
Agreement will be governing.
The Purchase Price or the number of ADRs, subject to purchase upon the exercise
of each Warrant represented hereby, are not subject to modifications or
adjustment.
Each Warrant represented hereby is exercisable at the option of the Registered
Holder pursuant to the terms of the Agreement, in the case of the exercise of
less than all the Warrants represented hereby, the Company shall cancel this
Warrant Certificate or Warrant Certificates of like tenor, and shall issue a new
Warrant Certificate or Warrant Certificates for the balance of the Warrants
unexercised, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5.00 p.m. (London time) on . If such date
shall in England, be a holiday or a day on which the banks are authorized to
close, then the Expiration Date shall mean 5.00 p.m. (London time) the next
following day which, in England, is not a holiday or a day on which banks are
authorized to close. The Company may, at its sole discretion, extend the
Expiration Date.
<PAGE>
This Warrant Certificate is exchangeable upon the surrender hereof by the
Registered Holder at the corporate office of the Company for a new Warrant
Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificate to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of each surrender.
Prior to the exercise of any Warrant represented hereby, the Registered Holder
shall not be entitled to any rights of a stockholder of the Company including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
The within Warrant is transferable and/or assignable upon written consent of the
Company which consent shall not be unreasonably withheld. The requisite
documentation and request for assignment must be presented to the Company and
its counsel to effect a transfer and/or assignment of said Warrant.
Upon due presentment with any tax or governmental charge imposed in connection
therewith, for registration of any transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrants Certificates, representing an
equal aggregate number of Warrants, will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant and the Agreement.
The Holder of said Warrant understands and agrees that, in order to exercise the
said Warrant, payments in U.S. dollars, as stated herein, for the exercise of
each Warrant per share must be made at the Company's offices, and that the
Warrant herein expires on .
Prior to due presentment for the registration of transfer hereof, the Company
may deem and treat the Registered Holder as the absolute owner hereof, and of
each Warrant represented hereby (notwithstanding any notations of ownership or
writing hereon made by anyone other than a duly authorized officer of the
Company) for all purposes, and shall not be affected by any notice to the
contrary.
The within Warrant has been authorized by the Board of Directors of the Company
and that, upon exercise, the Holder may qualify under Regulation S of the
Securities Act, subject to compliance with the requirements of said Regulation
This Warrant shall be governed by and construed in accordance with the laws of
England.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its Corporate Seal to be imprinted hereon.
Date :
London, England
-----------------------------------
SENETEK PLC.
ATTEST :
By :-----------------------------------------
Director
By :-----------------------------------------
Director & Corporate Secretary
AGREED TO:
-----------------------------------
WINDSOR CAPITAL MANAGEMENT LTD.
Director
<PAGE>
EXHIBIT 3
FORM OF
PROMISSORY NOTE
New York, New York
April 28, 1998
FOR VALUE RECEIVED, the undersigned, SENETEK PLC, (the "Maker") hereby
promises to pay to the order of WINDSOR CAPITAL MANAGEMENT, LTD., (the
"Holder"), the principal sum of $______________ with interest thereon at
_______% per annum, payable on _________(date).
1. Payment of principal is to be made at such address as to which
Holder shall notify the Maker in writing, prior to maturity, in lawful money of
the United States.
2. If, under any bankruptcy or insolvency law or other law for the
reorganization arrangement, composition or similar relief or aid of debtors or
creditors: (a) the Maker is adjudicated a bankrupt, or takes or seeks to take or
to have taken, or consents to the taking of, any action with respect to it or a
substantial part of its property or affairs, or (b) a Court or other
governmental authority of competent jurisdiction (i) approves a petition seeking
any such relief or aid with respect to the Maker, (ii) appoints a trustee,
receiver, or liquidator of the Maker or of substantially all of its property or
affairs, or (iii) assumes custody or control of substantially all oft he
property or affairs of the Maker or operation to the exclusion of Management;
and, in both cases, such approval or appointment is not vacated, or the custody
or control is not terminated, within sixty (60) days or stayed on appeal, then
at the option of the Holder, the Holder may declare the unpaid balance of the
principal and accrued interest, if any, if not then due and payable to be due
and payable.
3. This Note and the rights of the Holder and obligations of the Maker
hereunder are subject to the provisions of an Agreement by and between Senetek
PLC and Windsor Capital Management, Ltd. dated April 28, 1998.
4. The Maker shall have the right of prepayment, so long as interest is
paid up to the date of said prepayment.
5. In the event of any default which shall remain uncured for a period
of ten (10) days, the Holder thereof shall have the right to accelerate payment
of all principal and interest and be entitled to receive reasonable attorneys'
fees in the event an attorney is required to collect the amount due.
SENETEK PLC
BY: NAME OF SIGNEE
--------------------------------
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Senetek PLC
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
April 7, 1998, which appears on page F-1 of Senetek PLC's Annual Report on Form
10-K for the year ended 31 December 1997. We also consent to the references to
us under the headings "Experts" and "Selected Financial Data" in such
Prospectus. However, it should be noted that Price Waterhouse has not prepared
or certified such "Selected Financial Data."
/s/ PRICE WATERHOUSE
- ------------------------
Price Waterhouse
Southwark Towers
32 London Bridge Street
London
SE1 9SY
England 15 October 1998
EXHIBIT 24.1
POWER OF ATTORNEY
We the undersigned directors and/or officers of Senetek PLC (the
"Company"), hereby severally constitute and appoint Anthony J. Cataldo,
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company and Paul A. Logan, Financial Director and Company Secretary,
individually, with full powers to them, to sign for us, in or names and in the
capacities indicated below, the Registration Statement on Form S-3 filed with
the Securities and Exchange Commission, and any and all amendments to said
Registration Statement (including post-effective amendments), and any
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, in connection with the registration under the Securities Act
of 1933, as amended, of equity securities of the Company, and to file or cause
to be filed the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as each of them might or could do in person, and hereby
ratifying and confirming all that said attorney, or his substitute or
substitutes, shall do or cause to be done by virtue of this Power of Attorney.
WITNESS our hands on this 20th day of October, 1998.
SIGNATURES TITLES
/S/ ANTHONY J. CATALDO Chairman of the Board and Chief
- --------------------------- Executive Officer
Anthony J. Cataldo
Director
- ---------------------------
Gary David Frentz
/S/ STEVEN GEORGIEV Director
- ---------------------------
Steven Georgiev
/S/ P.A. LOGAN Company Secretary and Director
- ---------------------------
P. A. Logan
/S/ STEWART SLADE Chief Financial Officer
- ---------------------------
Stewart Slade
- --------------------------- Director
Uwe Thieme
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS AND NOTES.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> DEC-31-1997
<CASH> 6,216
<SECURITIES> 0
<RECEIVABLES> 2,486
<ALLOWANCES> 0
<INVENTORY> 890
<CURRENT-ASSETS> 9,592
<PP&E> 1,909
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,401
<CURRENT-LIABILITIES> 7,895
<BONDS> 0
<COMMON> 4,215
0
0
<OTHER-SE> 1,291
<TOTAL-LIABILITY-AND-EQUITY> 13,401
<SALES> 5,722
<TOTAL-REVENUES> 5,722
<CGS> 3,988
<TOTAL-COSTS> 21,348
<OTHER-EXPENSES> 92
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 179
<INCOME-PRETAX> 15,539
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,539
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,539
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS AND NOTES.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> JUN-30-1998
<CASH> 989
<SECURITIES> 0
<RECEIVABLES> 2,796
<ALLOWANCES> 0
<INVENTORY> 2,007
<CURRENT-ASSETS> 5,792
<PP&E> 2,738
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,363
<CURRENT-LIABILITIES> 6,894
<BONDS> 0
<COMMON> 4,404
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,363
<SALES> 2,772
<TOTAL-REVENUES> 2,772
<CGS> 1,670
<TOTAL-COSTS> 9,339
<OTHER-EXPENSES> 192
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31
<INCOME-PRETAX> 6,406
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,406
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,406
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
