As filed with the Securities and Exchange Commission on June 15, 1999
Registration No. 333-____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
BENTLEY PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in its Charter)
Florida 59-1513162
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation Identification No.)
or Organization)
Mr. James R. Murphy
Bentley Pharmaceuticals, Inc.
65 Lafayette Road 65 Lafayette Road
North Hampton, NH 03862 North Hampton, NH 03862
(603) 964-8006 (603) 964-8006
(Address, Including Zip Code, and Name, Address, Including Zip Code,
Telephone Number Including and Telephone Number, Including
Area Code, of Registrant's Principal Area Code, of Agent For Service)
Executive Offices)
---------------------------
Copy to:
Mark S. Hirsch, Esq.
Jordan A. Horvath, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
---------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective, as determined by
market conditions.
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 is 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
<S> <C> <C> <C> <C>
| | Proposed | Proposed |
| | Maximum | Maximum | Amount Of
Title of Shares | Amount To | Aggregate Price | Aggregate | Registration
To Be Registered | Be Registered | Per Share (1) | Offering Price (1) | Fee
- ---------------------------------------|---------------------|------------------|---------------------------|----------------------
common stock, $.02 par value per share | 2,002,489 shares | $3.28125 | $6,570,667 | $1,827
=======================================|=====================| =================|========================== |======================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933 as amended, based
on the average of the high ($3.375) and low ($3.1875) reported sales
prices on the American Stock Exchange on June 9, 1999.
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 become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not seeking an offer to buy these securities in
any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED JUNE 15, 1999
PROSPECTUS
BENTLEY PHARMACEUTICALS, INC.
2,002,489 shares of common stock
o The shares of common stock offered by this prospectus are
being sold by the selling stockholders. The selling
stockholders may offer their shares through public or private
transactions, at prevailing market prices or at privately
negotiated prices.
o We will not receive any proceeds from the exercise of these
shares. We will receive proceeds from the exercise of warrants
and those will be used for our general corporate purposes.
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|American Stock Exchange |
|Pacific Exchange, Inc. |
|Symbol for common stock: "BNT"|
------------------------------
o On June 9, 1999, the closing bid price of our common stock on
the American Stock Exchange was $3.25 per share.
The securities offered in this prospectus involve a high degree of
risk. You should carefully consider the factors described under the
heading "Risk Factors" beginning on page 3 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined
if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The date of the Prospectus is June ____ , 1999
<PAGE>
Table of Contents
RISK FACTORS................................................................3
USE OF PROCEEDS............................................................12
SELLING STOCKHOLDERS.......................................................13
PLAN OF DISTRIBUTION.......................................................15
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...............................16
INDEMNIFICATION OF DIRECTORS AND OFFICERS..................................17
LEGAL MATTERS..............................................................17
EXPERTS ..................................................................17
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RISK FACTORS
Before you buy shares of our common stock, you should be aware that
there are various risks associated with such purchase, including those described
below. You should consider carefully these risk factors, together with all of
the other information in this Prospectus, and the documents we have incorporated
by reference in the section "Where You Can Find More Information About Us"
before you decide to purchase shares of our common stock.
Some of the information in this Prospectus and in the documents we have
incorporated by reference may contain forward-looking statements. Such
statements can be generally identified by the use of forward-looking words such
as "may," "will," "expect," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. These statements discuss future expectations,
or state other "forward-looking" information. When considering such statements,
you should keep in mind the risk factors and other cautionary statements in this
Prospectus. The risk factors noted in this section and other factors noted in
this Prospectus could cause our actual results to differ materially from those
contained in any forward-looking statements.
Risks associated with our past financial results
We could be required to cut back or stop operations if we are unable to raise or
obtain needed funding
We are experiencing losses from operations resulting in the need to
fund our operations through outside financing. In October 1995 we completed two
private placements resulting in net proceeds to Bentley of approximately
$1,590,000, all of which was used to fund our working capital. The 1996 Public
Offering resulted in proceeds of approximately $5,700,000. Most of the proceeds
of the 1996 Public Offering was used to repay the debt incurred in the private
placements. We also received approximately $9,800,000 in 1997, when
approximately 70% of our then outstanding Class A Warrants were exercised. The
Class A Warrants originally were sold as a component of the 1996 Public
Offering. Our future existence and profitability depends on our ability to fund
and expand operations in an effort to achieve profits from operations. We cannot
assure you that our business will ultimately generate sufficient revenue to fund
our operations on a continuing basis.
Although we were founded in 1974, we have only generated revenue from
product-related sales since August 1991. We have used cash from outside
financing to fund our operations. We have made progress toward commercialization
of specific products and have began to commercialize others. We are now
generating revenues from sales of products by our subsidiary, Laboratorios
Belmac, S.A., a pharmaceutical manufacturer located in Spain. We acquired
Laboratorios Belmac in February 1992. Substantial amounts of time and financial
and other resources will be required to complete the development and clinical
testing of our products currently under development. Due to our limited cash, we
suspended most of our research and development activities pending the selection
of strategic partners for development and marketing. We cannot assure you that
we will receive additional funding necessary to continue research and
development activities or that we will otherwise succeed in developing any
additional products with commercially valuable applications.
We believe that with our emphasis on product distribution in Spain,
strategic alliances and product acquisitions together with careful management of
our research and development activities and the net proceeds from the 1996
Public Offering, that we should have sufficient liquidity to enable us to
conduct our
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existing operations into the year 2000, of which there can be no assurance.
However, our pharmaceutical products being developed, and which may be
developed, will require the investment of substantial additional time as well as
financial and other resources in order to become commercially successful.
Following the development period, our products will generally be required to go
through lengthy governmental approval processes, including extensive clinical
testing, followed by educating physicians, pharmacists and consumers about the
benefits of our product and developing a market for our product. Revenues from
our operations and cash may not be sufficient over the next several years for
commercializing any of the products we are currently developing. Consequently,
we may require additional licensees or partners and/or additional financing. We
cannot assure you that we can conclude such commercial arrangements or obtain
additional capital when needed on acceptable terms, if at all.
At December 31, 1998, we had net operating loss carryforwards (the
"NOLs") of approximately $29,000,000 available to offset future U.S. taxable
income. NOLs are losses reflected on tax returns that we can use to off-set
future U.S. taxable income, subject to various legal restrictions.
We have a history of losses and if we do not achieve profitability we may not be
able to continue our business in the future
As of March 31, 1999 we have accumulated losses (accumulated deficit)
of approximately $74,405,000. We anticipate incurring additional losses until we
can successfully market and distribute our products and develop new technologies
and commercially viable future products. If we are unable to do so, we will
continue to have losses and might not be able to continue our operations.
We have incurred the following losses since 1996:
Fiscal year ended:
o December 31, 1996 ............... $2,919,000
o December 31, 1997 ............... $3,815,000
o December 31, 1998 ............... $2,876,000
Quarter ended:
o March 31, 1999 .....................$547,000
We may be restricted from using our net operating loss carryforwards due to a
change in equity ownership and a change in our tax year
As of December 31, 1998, we had NOLs of approximately $29,000,000
available to offset future U.S. taxable income. The use of the NOLs generated
through December 31, 1997 may be limited to approximately $1,000,000 each year
as a result of stock, option and warrant issuances resulting in an ownership
change of more than 50% of our outstanding equity. The NOL of approximately
$3,200,000 generated during the tax year ended December 31, 1998 is available to
offset future taxable income without limitation. Additionally, approximately
$1,800,000 of the NOL generated in 1995 available to offset future U.S. taxable
income will be limited to approximately $300,000 per year over the next six
years due to the change in tax year end during 1995. We used approximately
$14,000,000 of NOLs to offset taxable income during 1997. If not offset against
future taxable income, the NOL carryforwards will expire in tax years 2007
through 2013.
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Risks associated with our business
Successful development of current and future products is uncertain
We recently purchased technology to enhance the penetration of certain
pharmaceutical products through the dermal layers of the skin. Although several
systems have been developed by various pharmaceutical companies to enhance the
transdermal delivery of specific drugs, relatively limited research has been
conducted in the expansion of transdermal delivery systems to a wider range of
pharmaceutical products. Transdermal delivery systems are currently marketed for
only a limited number of products. In addition, transdermal delivery systems
used to date have often demonstrated adverse side effects for users, such as
skin irritation and delivery difficulties.
Our proposed products are in the early development stage, require
significant further development, testing and regulatory clearances and are
subject to the risks of failure inherent in the development of products based on
innovative technologies. Due to our limited resources, collaboration will be
essential in order to complete the development of specific products. No
assurance can be given that the necessary collaboration will be obtained. Risks
during development include the possibilities that any or all of the proposed
products may be found to be ineffective or toxic, or otherwise may fail to
receive necessary regulatory clearances; that the proposed products, although
effective, may be uneconomical to market; or that third parties may market
superior or equivalent products. Due to the extended testing and regulatory
review process required before marketing clearance can be obtained, we do not
expect to be able to realize royalty revenues from the sale of any drugs in the
near term.
Clinical trial results may result in failure to obtain regulatory approval and
inability to sell products
Before approving a drug for commercial sale as treatment for a disease,
the FDA and other regulatory authorities generally require that the safety and
efficacy of a drug be demonstrated in humans. If our clinical trials do not
demonstrate the safety or efficacy of our products, or if we otherwise fail to
obtain regulatory approval for our products, we will not be able to generate
revenues from the commercial sale of our products. Any human pharmaceutical
product developed by us would require clearance by Spain's Ministry of Health
for sales in Spain, the U.S. Food and Drug Administration ("FDA") for sales in
the United States and similar agencies in other countries. The process of
obtaining these approvals is costly and time-consuming, and there can be no
assurance that such approvals will be granted. In general, only a small
percentage of new pharmaceutical products achieve commercial success. Such
governmental regulation may prevent or substantially delay the marketing of our
products and may cause us to undertake costly procedures with respect to our
research and development and clinical testing operations which may furnish a
competitive advantage to more substantially capitalized companies which compete
with Bentley. In addition, we are required, in connection with our activities,
to comply with good manufacturing practices (GMPs) and local, state and federal
regulations. Non-compliance with these regulations could have a material adverse
effect on Bentley and/or prevent the commercialization of our products.
Our patent position is uncertain and our success depends on our proprietary
rights
We have filed numerous patent applications and have been granted a
number of patents. However, there can be no assurance that our pending
applications will be issued as patents or that any of our issued patents will
afford adequate protection to us or our licensees. Other private and public
entities have also filed applications for, or have been issued, patents and are
expected to obtain patents and other proprietary rights
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<PAGE>
to technology which may be harmful to the commercialization of our products. We
cannot determine the ultimate scope and validity of patents which are now owned
by or may be granted to third parties in the future, the extent to which we may
wish or be required to acquire rights under such patents, or the cost or
availability of such rights. In addition, we also rely on unpatented proprietary
technology in the development and commercialization of our products. There is no
assurance that others may not independently develop the same or similar
technology or obtain access to our proprietary technology.
We also rely upon trade secrets, unpatented proprietary know-how and
continuing technological innovations to develop our competitive position. All of
our employees with access to our proprietary information have entered into
confidentiality agreements and have agreed to assign to us any inventions
relating to our business made by them while in our employ. However, there can be
no assurance that others may not acquire or independently develop similar
technology or, if patents in all major countries are not issued with respect to
our products, that we will be able to maintain information pertinent to such
research as proprietary technology or trade secrets.
We may have to lower prices or spend more money to effectively compete against
companies with greater resources than us which could result in lower revenues
and/or profits
We compete with other pharmaceutical companies, biotechnology firms and
chemical companies, many of which have substantially greater financial,
marketing and human resources than us (including substantially greater
experience in clinical testing, production and marketing of pharmaceutical
products). We cannot assure you that we will be able to compete successfully
given these factors. For example, if our competitors offer lower prices, we
could be forced to lower prices which would result in reduced margins and a
decrease in revenues. If we do not lower prices we could lose sales and market
share. In either case, if we are unable to compete against companies who can
afford to cut prices, we would not be able to generate sufficient revenues to
grow Bentley or reverse our history of losses. We also experience competition in
the development of our products and processes from individual scientists,
hospitals, universities and other research institutions and, in some instances,
compete with others in acquiring technology from these sources.
Rapid technological change may result in our products becoming obsolete before
we recoup a significant portion of related costs
The pharmaceutical industry has undergone rapid and significant
technological change. We expect the technology to continue to develop rapidly,
and our success will depend significantly on our ability to maintain a
competitive position. We have recently shifted our strategic focus so that we do
not rely on research and development of pharmaceuticals from concept through
marketing. Instead, we seek to acquire late-stage development compounds that can
be marketed within approximately one year and currently-marketed products. Rapid
technological development may result in actual and proposed products or
processes becoming obsolete before we recoup a significant portion of related
research and development, acquisition and commercialization costs.
Pharmaceutical pricing is uncertain and may result in a negative effect on our
profitability
Our levels of revenues and profitability may be negatively affected by
the continuing efforts of governmental and third party payers to contain or
reduce the costs of health care through various means. For example, in certain
foreign markets, including Spain, pricing or profitability of prescription
pharmaceuticals is subject to government control. In the United States, there
have been, and we expect that there will continue
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<PAGE>
to be, a number of federal and state proposals to implement similar government
control. While we cannot predict whether any such legislative or regulatory
proposals will be adopted, the adoption of such proposals could have a material
adverse effect on our business, financial condition and profitability. In
addition, sales of prescription pharmaceuticals are dependent in part on the
availability of reimbursement to the consumer from third party payers, such as
government and private insurance plans. Third party payers are increasingly
challenging the prices charged for medical products and services. If we succeed
in bringing one or more products to the market, there can be no assurance that
these products will be considered cost effective and that reimbursement to the
consumer will be available or will be sufficient to allow us to sell our
products on a competitive basis.
We depend on third parties for commercialization in the United States
We intend to sell our products in the United States and internationally
in collaboration with one or more marketing partners. We do not presently
possess the resources or experience necessary to market our products in the U.S.
We presently have no agreements for the licensing or marketing of our product
candidates, and we cannot assure you that we will be able to enter into any such
agreements in a timely manner or on commercially favorable terms, if at all.
Development of an effective sales force requires significant financial
resources, time and expertise. We cannot assure you that we will be able to
obtain the financing necessary or to establish such a sales force in a timely or
cost effective manner, if at all, or that such a sales force will be capable of
generating demand for our product candidates.
As a producer of "Orphan Drugs" we may be required to continue producing the
product regardless of its potential
An Orphan Drug is a product or products used to treat a rare disease or
condition, which, as defined under United States law, is a disease or condition
that affects populations of less than 200,000 individuals or, if victims of a
disease number more than 200,000, the sponsor establishes that it does not
realistically anticipate its product sales will be sufficient to recover its
costs. If a product is designated an Orphan Drug, then the sponsor is entitled
to receive certain incentives to undertake the development and marketing of the
product. In Spain, Orphan Drugs are given a preference in the pharmaceutical
review process by Spain's Ministry of Health if it can be shown that the product
is an important therapeutic agent and there is unequivocal data supporting its
efficacy. The Ministry of Health has the authority to require pharmaceutical
manufacturers to continue to produce products which are Orphan Drugs regardless
of their commercial potential. As required by the Ministry of Health,
Laboratorios Belmac currently manufactures and distributes one Orphan Drug,
Anacalcit, which is used in the treatment of nephrolithiasis. We do not
currently market any Orphan Drugs in the United States.
We depend on key personnel and must continue to attract and retain key employees
We believe that we have been able to attract skilled and experienced
management and scientific personnel. There can be no assurance, however, that we
will continue to attract and retain personnel of high caliber. From 1992 to
1994, five individuals served as our chief executive officer. This instability
in our management in the past has hampered our growth. While we believe that we
have assembled an effective management team, the loss of several individuals who
are considered key management or scientific personnel could have an adverse
impact on Bentley.
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We face product liability risks
We face an inherent business risk of exposure to product liability
claims in the event that the use of our technology or prospective products is
alleged to have resulted in adverse effects. While we have taken, and will
continue to take, what we believe are appropriate precautions, there can be no
assurance that we will avoid significant liability exposure. We maintain product
liability insurance in the amount of $5 million. However, we cannot assure you
that this coverage will be adequate in terms and scope to protect us in the
event of a product liability claim. In connection with our clinical testing
activities, we may, in the ordinary course of business, be subject to
substantial claims by, and liability to, subjects who participate in our
studies.
We face risks when doing business outside of the United States
Nearly all of our revenues during 1997 and 1998 have been generated
outside the United States, from our subsidiary in Spain. There are risks in
operations outside the United States, including, among others, the difficulty of
administering businesses abroad, exposure to foreign currency fluctuations and
devaluations or restrictions on money supplies, foreign and domestic export law
and regulations, taxation, tariffs, import quotas and restrictions and other
political and economic events beyond our control. We have not experienced any
material effects of these risks as of yet, however there can be no assurance
that they will not have such an effect in the future.
Our computer systems may not recognize the year 2000 which may affect our
computer systems and disrupt our business
The concerns about the upcoming year 2000 have arisen because many
existing computer programs use only the last two digits of any particular year,
rather than all four digits, to identify that year. These computer programs can
not properly distinguish between the years 1900 and 2000 or 1901 and 2001, for
example. If not corrected, many computer applications could fail or create
erroneous results. The Year 2000 issue can affect information as well as
non-information technology systems. The extent of the potential impact of the
Year 2000 issue is not yet known, and if not timely corrected, could affect the
global economy.
We have recognized the need to ensure that our business operations will
not be adversely impacted by the Year 2000 issue and are aware of the time
sensitive nature of this problem. As a result, we have completed an assessment
of how we may be impacted by the Year 2000 issue. We have engaged information
system consultants to evaluate our systems and technology. Our assessment
process included a review of our information as well as non-information
technology systems. We have also considered the potential impact on our
operations and business model in the event that third parties with whom we have
material relationships fail to resolve their own Year 2000 issues. The results
of our assessment phase indicated that certain information technology systems
(hardware and software) needed upgrading or replacing. Our management has also
conducted a review of our non-information technology systems and has concluded
that it is not materially exposed to non-information technology system risks. We
have polled our significant suppliers, service providers and other third parties
with whom we have material relationships to determine the extent to which we are
vulnerable to a failure of any such third party to adequately address its own
Year 2000 issue. We have received responses from 60% of such parties, and we are
following up on those who have not responded. We have not identified any
additional risks as a result of the responses received to date.
In the view of our management, not only is it possible that our
management may not have access to vital information, which is used to make
management decisions, but the manufacturing process could even be interrupted,
due to unavailability of raw materials or inoperable equipment and/or systems if
our assessment
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and remediation program is not successful. We cannot guarantee that the systems
of other companies on which our systems rely will be timely converted, or that a
failure to convert by another company, or a conversion that is incompatible with
our systems, would not have a material adverse effect on us. We have determined
that we have no exposure to contingencies related to the Year 2000 issue for the
products we have sold or anticipate selling in the future.
The costs of the Year 2000 project and the date on which we plan to
complete the Year 2000 modifications are based on our management's best
estimates, which were derived utilizing numerous assumptions of future events
including the continued availability of certain resources, third party
modification plans and other factors. However, we cannot guarantee that these
estimates will be achieved and actual results could differ materially from those
plans. Specific factors that might cause such material differences include, but
are not limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes, and similar
uncertainties. Because of the importance of addressing the Year 2000 issue, we
are developing contingency plans to address any issues that may not be corrected
by our Year 2000 project in a timely manner. Our contingency plans may include
stock piling of raw materials, producing greater than normal quantities of
finished goods, and implementing manual back-up systems where appropriate.
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Risks associated with our securities
Your percentage of ownership, voting power and price of Bentley common stock may
decrease as a result of events which increase the number of shares of our
outstanding common stock
As of June 9, 1999, we had the following capital structure:
Common stock outstanding assuming conversion/exercise of all
outstanding securities
- --------------------------------------------------------------------------------
Common stock now outstanding: 8,443,184
Common stock issuable upon:
Exercise of Class A warrants: 2,110,833
Exercise of Class B warrants: 3,502,500
Exercise of underwriter warrants: 874,000
Conversion of Debentures: 2,794,800
Exercise of other warrants: 1,330,000
Exercise of options: 1,825,856
Other Shares issuable: 801,089
----------------------
Total: 21,682,262
- -------------------------------------------------------- ----------------------
If all of the outstanding warrants and options were exercised, Bentley
would receive proceeds of $40,585,000. However, approximately $27,918,000
represents proceeds which we are not likely to receive at the present time as
the exercise price of certain of the warrants and options is higher than the
current market price of our common stock. If all of the debentures were to be
converted (including debentures issuable to the underwriter of Bentley's 1996
Public Offering upon exercise of the underwriter's warrants) our long-term debt
would be reduced by $5,700,000. When the 801,089 shares of common stock are
issued, it will reduce liabilities on our balance sheet by $1,188,000.
We may conduct additional future offerings of our common stock or other
securities with rights to convert the securities into shares of our common
stock.
Conversion or exercise of our outstanding convertible securities,
options and warrants into common stock may significantly and negatively affect
the market price for the common stock as well as decrease your percentage of
ownership and voting power of the common stock.
The market price of our shares has been volatile. In July 1995 Bentley
effected a one-for-ten reverse stock split. As recently as the second quarter of
1995, the market price of our common stock was $9.38 (giving retroactive effect
to the reverse stock split). Factors such as announcements of technological
innovations or new commercial products by our competitors, the results of
clinical testing, patent or proprietary rights, developments, general market
conditions or other matters may have a significant impact on the market price of
the common stock.
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Obligations in connection with underwriter warrants, other warrants and options
may hinder our ability to obtain future financing
We sold to the participating underwriter in the Public Offering, for
nominal consideration, warrants to purchase up to 570 units exercisable for a
period of four years, commencing one year from the date of sale, at an exercise
price of $1,200 per unit. Each unit consists of a debenture due February 13,
2006 and 1,000 Class A Warrants. The underwriter of Bentley's 1996 Public
Offering has previously exercised 110 of the underwriter's warrants; 460 remain
unexercised. In addition to warrants issued in the Public Offering, we currently
have outstanding 3,155,856 options and warrants to purchase Common Stock at
exercise prices ranging from $1.50 to $177.50. The holders of the underwriter
warrants and of the warrants and options are likely to exercise or convert them
at a time when we are able to obtain additional equity capital on terms more
favorable than those provided by such warrants, options and underwriter
warrants. The underwriter warrants and certain other warrants and options also
grant to the holders certain demand registration rights and "piggy back"
registration rights. These obligations may hinder our ability to obtain future
financing.
Your interest in Bentley may be diluted by the issuance of preferred stock with
greater rights than the common stock which we can sell or issue at any time
The sale or issuance of any shares of preferred stock having rights
superior to those of the common stock may result in a decrease in the value or
market price of the common stock. The issuance of preferred stock could have the
effect of delaying, deferring or preventing a change of ownership without
further vote or action by the stockholders and may adversely affect the voting
and other rights of the holders of common stock.
Our board of directors is authorized to issue up to 2,000,000 shares of
preferred stock. The board has the power to establish the dividend rates,
preferential payments on our liquidation, voting rights, redemption and
conversion terms and privileges for any series of preferred stock.
We have not paid dividends on our Common Stock and do not intend to pay
dividends in the foreseeable future
We have not paid dividends on our common stock since our inception and
do not intend to pay any dividends on our Common Stock in the foreseeable
future. However, at our annual meeting of stockholders to be held on June 30,
1999, our stockholders will be considering a proposal to change our state of
incorporation from Florida to Delaware and to adopt a certificate of
incorporation and bylaws which conform to Delaware law. Delaware law differs
from Florida law in its treatment of when and how a corporation may declare
dividends. Delaware law provides that a corporation may pay dividends out of
surplus, out of the corporation's net profits for the preceding fiscal year, or
both, provided that there remains in the stated capital account an amount equal
to the par value represented by all shares of the corporation's stock having a
distribution preference. Florida law provides that dividends may be paid, unless
after giving effect to such distribution, the corporation would not be able to
pay its debts as they come due in the usual course of business, or the
corporation's total assets would be less than the sum of its total liabilities,
plus (unless the corporation's articles of incorporation permit otherwise) the
amount needed to satisfy preferential distributions.
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Certain laws may make It more difficult or discourage third parties from
attempting to control Bentley
The State of Florida has enacted legislation that may deter or
frustrate takeovers of Florida corporations. The Florida Control Share Act
generally provides that shares acquired in excess of certain specified
thresholds will not possess any voting rights unless such voting rights are
approved by a majority vote of a corporation's disinterested stockholders. The
Florida Affiliated Transactions Act generally requires supermajority approval by
disinterested stockholders of certain specified transactions between a public
corporation and holders of more than 10% of the outstanding voting shares of the
corporation (or their affiliates). Florida law also authorizes Bentley to
indemnify our directors, officers, employees and agents.
We have adopted a by-law with such an indemnity.
However, since we plan to consolidate our U.S. operations and relocate
our corporate headquarters to New Hampshire in the summer of 1999 and our lease
on our corporate headquarters in Florida expires in October 1999 and will not be
renewed, our stockholders will no longer enjoy the benefits of Florida's
"anti-takeover" statute. This is one of the reasons our proxy issued in
connection with our annual meeting of stockholders includes a proposal for
stockholders to approve the change of our state of incorporation from Florida to
Delaware and to adopt a certificate of incorporation and bylaws which conform to
Delaware law. Delaware law contains a statutory provision intended to discourage
certain takeover attempts of Delaware corporations which are not approved by the
board of directors. This "anti-takeover" provision along with other
"anti-takeover" provisions being included in Bentley's proposed certificate of
incorporation and bylaws could have the effect of lessening the possibility that
our stockholders would be able to receive a premium above market value for their
shares in the event of a takeover. These provisions could also have an adverse
effect on the market value of our shares of common stock. To the extent that
these provisions may restrict or discourage takeover attempts, they may render
less likely a takeover opposed by our board and may make removal of the board or
management less likely as well.
USE OF PROCEEDS
The selling stockholders are selling all of the shares covered by this
prospectus for their own accounts. Accordingly, we will not receive any proceeds
from the resale of the shares. We will receive proceeds from the exercise of the
selling stockholders' warrants and options. If all the selling stockholders'
warrants and options were exercised, we would receive approximately $3,372,500.
However, approximately $760,000 represents proceeds which we are not likely to
receive at the present time as the exercise price of certain of the
stockholders' warrants and options is higher than the current market price of
our common stock. We would use the net proceeds from the exercise of the selling
stockholders' warrants and options for general corporate purposes including
pharmaceutical product development.
-12-
<PAGE>
SELLING STOCKHOLDERS
The table below lists information regarding the selling stockholders'
ownership of shares of our common stock as of June 9, 1999. Information
concerning the selling stockholders may change from time to time. To the extent
that the selling stockholders or any of its representatives advise us of such
changes and if required, we will report those changes in a supplement to this
document.
<TABLE>
<CAPTION>
Ownership
Ownership After Offering if
Prior to Offering Maximum Maximum is Sold
----------------- Amount to ----------------
Selling Stockholder Amount Percent be Sold Amount Percent
- ------------------- ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Robert M. Stote (1) 282,866 3.31 15,000 267,866 3.13
Walter Light (2) 550,594 6.26 350,000 200,594 2.28
Plexus Ventures, Inc. (3) 166,000 1.95 66,000 100,000 1.18
Ranald Stewart, Jr. (4) 40,400 * 40,000 400 *
Jeffery Harris (5) 6,400 * 6,400 0 0
Dominick & Dominick (6) 425,000 4.79 425,000 0 0
Kinexsys (7) 40,000 * 40,000 0 0
Baytree Associates, Inc. (8) 25,000 * 25,000 0 0
Conrex Pharmaceutical Corp.(9) 359,282 4.08 359,282 0 0
Yungtai Hsu (10) 675,807 7.41 675,807 0 0
</TABLE>
- ----------------------
* Less than one percent
(1) Dr. Stote's shares include 239,166 shares of common stock which Dr. Stote
has the right to acquire pursuant to presently exercisable stock options,
10,000 shares of common stock which Dr. Stote has the right to acquire
pursuant to presently exercisable stock purchase Class A warrants (the
"Class A Warrants"), 4,000 shares of common stock which Dr. Stote has a
right to acquire upon conversion of the Debentures (which Class A Warrants
and Debentures were purchased in the Company's 1996 public offering of
such securities), and 15,000 shares of Common Stock which are issuable to
Dr. Stote upon approval of listing of such shares with the American Stock
Exchange. Dr. Stote is the Senior Vice President, Chief Science Officer
and a director of Bentley.
(2) Mr. Light's shares include 350,000 shares of common stock which Mr. Light
has the right to acquire pursuant to stock purchase warrants. 200,000 of
the shares are issuable to Mr. Light upon approval of listing of such
shares with the American Stock Exchange.
(3) The shares of Plexus Ventures, Inc. include 66,000 shares earned by Plexus
Ventures, Inc. as compensation for consulting services rendered to
Bentley. The shares are issuable to Plexus Ventures upon approval of
listing of such shares with the American Stock Exchange.
(4) Mr. Stewart's shares include 40,000 shares of Common Stock which Mr.
Stewart has the right to acquire pursuant to stock options. The shares are
issuable to Mr. Stewart upon approval of listing of such shares with the
American Stock Exchange. Mr. Stewart was a former officer and a director
of Bentley.
-13-
<PAGE>
(5) Mr. Harris' shares represent shares of Common Stock which Mr. Harris
received from Mr. Stewart in partial settlement of a judgment against Mr.
Stewart.
(6) The shares of Dominick & Dominick, Inc. represent shares which it has the
right to acquire pursuant to a warrant. The warrant was issued to Dominick
as compensation pursuant to an agreement it entered into with Bentley to
provide financial advisory services. The shares are issuable to Dominick
upon approval of listing of such shares with the American Stock Exchange.
To date, Dominick has not assisted Bentley in raising funds. Dominick's
agreement expires on June 18, 1999.
(7) The shares of Kinexsys represent shares which it has the right to acquire
pursuant to a warrant as compensation for consulting services rendered to
Bentley. The shares are issuable to Kinexsys upon approval of listing of
such shares with the American Stock Exchange. From October 1997 to
February 1999 Kinexsys provided investor relations services and public
relations service to Bentley.
(8) The shares of Baytree Associates, Inc. represent shares which it has the
right to acquire pursuant to a warrant as consideration for exercising, at
the request of Bentley, warrants it received in 1993 and 1994. The shares
are issuable to Baytree upon approval of listing of such shares with the
American Stock Exchange. During early 1993 and 1994, Baytree provided
financial advisory services to Bentley and assisted us in raising private
funds. Baytree has not advised us since 1996.
(9) Represents shares of common stock issued to Conrex Pharmaceutical
Corporation in connection with the purchase of certain assets of Conrex
Pharmaceutical Corporation by Yungtai Hsu. Conrex Pharmaceutical
Corporation had agreed to accept Bentley shares as part of the purchase
price. The shares are issuable to Conrex upon approval of listing of such
shares with the American Stock Exchange. Pursuant to the asset purchase
agreement between Conrex and Mr. Hsu dated February 1, 1999 effective as
of December 31, 1998, Conrex is entitled to receive certain royalties
arising from collaborative efforts between us and certain parties
introduced to us by Conrex.
(10) Represents 450,000 shares of common stock issuable upon the exercise of
warrants and 225,807 shares of common stock to be issued to Yungtai Hsu as
part of the purchase price in connection with our purchase of certain
assets from Mr. Hsu. The shares are issuable to Mr. Hsu upon approval of
listing of such shares with the American Stock Exchange. Pursuant to the
asset purchase agreement between Mr. Hsu and us dated February 1, 1999 and
effective December 31, 1998, Mr. Hsu is entitled to receive certain
royalties from the commercialization of any products developed by us (or
our successors) from the assets that we purchased from Mr. Hsu.
-14-
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares of common stock at various
times in one or more of the following transactions:
o On any U.S. securities exchange on which our common stock may be
listed at the time of such sale;
o In the over-the-counter market;
o In transactions other than on such exchanges or in the
over-the-counter market;
o In connection with short sales; or
o In a combination of any of the above transactions.
The selling stockholders may offer their shares of common stock at
prevailing market prices, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
The selling stockholders may use broker-dealers to sell their shares of
common stock. If this occurs, broker-dealers will either receive discounts or
commission from the selling stockholder, or they will receive commissions from
the purchasers of shares of common stock for whom they acted as agents. Such
brokers may act as dealers by purchasing any and all of the shares covered by
this prospectus either as agents for others or as principals for their own
accounts and reselling such securities under the prospectus.
The selling stockholders and any broker-dealers or other persons acting
on the behalf of parties that participate in the distribution of the shares may
be considered underwriters under the Securities Act. As such, any commissions or
profits they receive on the resale of the shares may be considered underwriting
discounts and commissions under the Securities Act.
As of the date of this prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and the selling
stockholders with respect to the offer to sale of the shares under this
prospectus. If we become aware of any agreement, arrangement or understanding,
to the extent required under the Securities Act, we will file a supplemental
prospectus to disclose:
(1) the name of any such broker-dealers;
(2) the number of shares involved;
(3) the price at which such shares are to be sold;
(4) the commissions paid or discounts or concessions
allowed to such broker-dealers, where applicable;
(5) that such broker-dealers did not conduct any
investigation to verify the information set out in
this prospectus, as supplemented; and
(6) other facts material to the transaction.
-15-
<PAGE>
The agreements have indemnification provisions between us and each
selling stockholder whereby each selling stockholder has agreed to indemnify us
against liabilities under the Securities Act, which may be based upon, among
other things, any untrue statement or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact. We have agreed to
bear customary expenses incident to the registration of the shares for the
benefit of the selling stockholders in accordance with such agreements, other
than underwriting discounts and commissions directly attributable to the sale of
such securities by or on behalf of the investor.
WHERE YOU CAN FIND MORE INFORMATION
ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, DC, New York, NY, and Chicago,
IL. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
website at http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC to
register shares of our common stock. This prospectus is part of that
registration statement and, as permitted by the SEC's rules, does not contain
all of the information included in the registration statement. For further
information about us and this offering, you may refer to the registration
statement and its exhibits. You can review and copy the registration statement
and its exhibits at the public reference facilities maintained by the SEC or on
the SEC's website described above.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
considered to be a part of this prospectus, and information that we file with
the SEC at a later date will automatically update or supersede this information.
We incorporate by reference the following documents as well as any future filing
we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
2. Quarterly Report on Form 10-Q for the period ended March 31, 1999;
3. Current Report on Form 8-K dated February 26, 1999; and
4. Registration Statement on Form 8-A containing the description of
our common stock, dated July 20, 1995.
-16-
<PAGE>
You may request a copy of these filings, at no cost to you, by writing
or by telephoning to us at Bentley Pharmaceuticals, Inc., 65 Lafayette Road, No.
Hampton, NH 03862, Attention: Michael D. Price, Chief Financial Officer, and our
telephone number is (603) 964-8006.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850 of the Florida Business Corporation Act allows
companies to indemnify their directors and officers against expenses, judgments,
fines and amounts paid in settlement under the conditions and limitations
described in the law.
Article IV of our By-laws authorizes us to indemnify our officers,
directors and other agents to the fullest extent permitted under Section
607.0850 of the Florida Business Corporation Act.
As discussed above, if Bentley is reincorporated in Delaware, Section
145 of the Delaware General Corporation Law will govern the indemnification of
our directors and officers. Delaware law is very similar to Florida law with
respect to indemnification of directors and officers. Our bylaws will contain a
provision that we, Bentley, will indemnify our directors and officers to the
fullest extent permitted under Delaware law.
We have entered into an indemnification agreement with each of our
directors and officers. In some cases, the provisions of the indemnification
agreement may be broader than the specific indemnification provisions contained
in our by-laws or otherwise permitted under Florida law. Each indemnification
agreement may require us to indemnify an officer or director against liabilities
that may arise by reason of his status or service as an officer or director, or
against liabilities arising from the director's willful misconduct of a culpable
nature. We maintain a directors and officers liability policy with Lexington
Insurance Company that contains an aggregate limit of liability of $2,000,000
per policy year for both directors' and officers' liability coverage.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to these provisions, or otherwise, we have been advised that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
Parker Chapin Flattau & Klimpl LLP, New York, New York will pass upon
the validity of the securities offered hereby.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports given upon their authority as experts
in accounting and auditing.
-17-
<PAGE>
We have not authorized any dealer, salesperson or any other person to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information. This prospectus does not offer to sell
or buy any shares in any jurisdiction where it is unlawful. The information in
this prospectus is current as of June 9, 1999.
SUBJECT TO COMPLETION DATED JUNE 14, 1999
PROSPECTUS
BENTLEY PHARMACEUTICALS, INC.
2,002,489 shares of common stock
TABLE OF CONTENTS
RISK FACTORS.............................................................3
USE OF PROCEEDS.........................................................12
SELLING STOCKHOLDERS....................................................13
PLAN OF DISTRIBUTION....................................................15
WHERE YOU CAN FIND MORE INFORMATION ABOUT US............................16
INDEMNIFICATION OF DIRECTORS AND OFFICERS...............................17
LEGAL MATTERS...........................................................17
EXPERTS ...............................................................17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses which will be paid
by the Company in connection with the issuance and distribution of the
securities being registered on this registration statement. The selling
stockholders will not incur any of the expenses set forth below. All amounts
shown are estimates.
SEC Registration Fee $1,827
Legal Fees and Expenses 5,000
Accounting Fees and Expenses 1,500
Miscellaneous Expenses 2,000
----------
Total $ 10,327
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Business Corporation Act (the "Florida Act") permits a
Florida Corporation to indemnify a present or former director or officer of the
corporation (and certain other persons serving at the request of the corporation
in related capacities) for liabilities, including legal expenses, arising by
reason of service in such capacity if such person shall have acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe his conduct was unlawful. However, in the case of
actions brought by or in the right of the corporation, no indemnification may be
made with respect to any matter as to which such director or officer shall have
been adjudged liable, except in certain limited circumstances.
We maintain a directors and officers liability policy with Lexington
Insurance Company that contains an aggregate limit of liability of $2,000,000
per policy year.
II-1
<PAGE>
ITEM 16. EXHIBITS.
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NO.
- --------------------------------------------------------------------------------
4.1 Form of Warrant Agreement between the Registrant and Walter Light dated
August 27, 1996. (Reference is made to Exhibit 4.6 to the Registrant's
Registration Statement on Form S-3, Commission File No. 333-28593,
which exhibit is incorporated herein by reference.)
4.2.1 Consulting Agreement between the Registrant and Plexus Ventures, Inc.
("Plexus") dated October 23, 1996. (Reference is made to Exhibit 4.7 to
the Registrant's Registration Statement on Form S-3, Commission File
No. 333- 28593, which exhibit is incorporated herein by reference.)
4.2.2(1) Addendum #1 to Consulting Agreement between the Registrant and Plexus
dated July 18, 1997.
4.2.3(1) Amendment to Consulting Agreement between the Registrant and Plexus
dated November 24, 1997.
4.3 Warrant Agreement between the Registrant and Ranald Stewart, Jr. dated
June 9, 1995. (Reference is made to Exhibit 4.8 to the Registrant's
Registration Statement on Form S-3, Commission File No. 333-28593,
which exhibit is incorporated herein by reference.)
4.4(1) Consulting Agreement between the Registrant and Dominick & Dominick,
Inc. dated December 19, 1997.
4.5(1) Consulting Agreement between the Registrant and Kinexsys dated October
30, 1997.
4.6(1) Warrant Agreement between the Registrant and Baytree Associates, Inc.
dated June 20, 1999.
4.7 Agreement between the Registrant and Yungtai Hsu ("Hsu") dated February
1, 1999, effective as of December 31, 1998. (Reference is made to
Exhibit 7.1 to the Registrant's Form 8-K filed February 26, 1999,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.8 Subscription Agreement between the Registrant and Hsu, dated February
11, 1999. (Reference is made to Exhibit 7.2 to the Registrant's Form
8-K filed February 26, 1999, Commission File No. 1-10581, which exhibit
is incorporated herein by reference.) 4.10 Registration Rights
Agreement between the Registrant and Hsu, dated February 11, 1999.
(Reference is made to exhibit 7.3 to the Registrant's Form 8-K filed
February 26, 1999, Commission File No.1-10581, which exhibit is
incorporated herein by reference.) 4.11 Warrant issued by the
Registrant for the benefit of Hsu, dated February 11, 1999. (Reference
is made to exhibit 7.4 to the Registrant's Form 8-K filed February 26,
1999, Commission File No. 1-10581, which exhibit is incorporated herein
by reference.)
4.9 Registration Rights Agreement between the Registrant and Hsu, dated
February 11, 1999. (Reference is made to exhibit 7.3 to the
Registrant's Form 8-K filed February 26, 1999, Commission File
No.1-10581, which exhibit is incorporated herein by reference.)
4.10 Warrant issued by the Registrant for the benefit of Hsu, dated February
11, 1999. (Reference is made to exhibit 7.4 to the Registrant's Form
8-K filed February 26, 1999, Commission File No. 1-10581, which exhibit
is incorporated herein by reference.)
II-2
<PAGE>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NO.
- --------------------------------------------------------------------------------
4.11 Subscription Agreement between the Registrant and Conrex Pharmaceutical
Corporation ("Conrex"), dated February 11, 1999. (Reference is made to
exhibit 7.5 to the Registrant's Form 8-K filed February 26, 1999,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.12 Registration Rights Agreement between the Registrant and Conrex, dated
February 11, 1999. (Reference is made to exhibit 7.6 to the
Registrant's Form 8-K filed February 26, 1999, Commission File No.
1-10581, which exhibit is incorporated herein by reference.)
5.1(1) Opinion of Parker Chapin Flattau & Klimpl, LLP.
23.1(1) Consent of Deloitte & Touche LLP.
23.2(1) Consent of Parker Chapin Flattau & Klimpl, LLP (included in Exhibit 5.1
hereto).
24.1(1) Power of Attorney (see page II-5 of this Registration Statement).
- -----------------------
(1) Filed herewith.
II-3
<PAGE>
ITEM 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;
(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, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in the 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 and 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 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.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "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 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 registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
of 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1923 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1923) that is incorporated by reference 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 bonafide offering thereof.
II-4
<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 City of North Hampton, State of New Hampshire, on the 11th
day of June, 1999.
Bentley Pharmaceuticals, Inc.
By /s/ James R. Murphy
______________________________________
James R. Murphy
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of James R. Murphy and Michael D.
Price and each of them with power of substitution, as his attorney-in-fact, in
all capacities, to sign any amendments to this registration statement (including
post-effective amendments) and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-facts or their
substitutes may do or cause to be done by virtue hereof.
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 date indicated.
Signature Title Date
--------- ----- ----
/s/ James R. Murphy Chairman of the Board, President, June 11, 1999
- ----------------------- Chief Executive Officer and
James R. Murphy Director
/s/ Robert M. Stote Senior Vice-President, Chief June 11, 1999
- ----------------------- Science Officer and Director
Robert M. Stote
/s/ Michael D. Price Vice-President, Chief Financial June 11, 1999
- ----------------------- Officer, Secretary, Treasurer and
Michael D. Price Director (principal financial and
accounting officer
II-5
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Robert J. Gyurik Vice President of Pharmaceutical June 11, 1999
- ----------------------- Development and Director
Robert J. Gyurik
/s/ Charles L. Bolling Director June 11, 1999
- -----------------------
Charles L. Bolling
/s/ Michael McGovern Director June 11, 1999
- -----------------------
Michael McGovern
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NO.
- --------------------------------------------------------------------------------
4.1 Form of Warrant Agreement between the Registrant and Walter Light dated
August 27, 1996. (Reference is made to Exhibit 4.6 to the Registrant's
Registration Statement on Form S-3, Commission File No. 333-28593,
which exhibit is incorporated herein by reference.)
4.2.1 Consulting Agreement between the Registrant and Plexus Ventures, Inc.
("Plexus") dated October 23, 1996. (Reference is made to Exhibit 4.7 to
the Registrant's Registration Statement on Form S-3, Commission File
No. 333- 28593, which exhibit is incorporated herein by reference.)
4.2.2(1) Addendum #1 to Consulting Agreement between the Registrant and Plexus
dated July 18, 1997.
4.2.3(1) Amendment to Consulting Agreement between the Registrant and Plexus
dated November 24, 1997.
4.3 Warrant Agreement between the Registrant and Ranald Stewart, Jr. dated
June 9, 1995. (Reference is made to Exhibit 4.8 to the Registrant's
Registration Statement on Form S-3, Commission File No. 333-28593,
which exhibit is incorporated herein by reference.)
4.4(1) Consulting Agreement between the Registrant and Dominick & Dominick,
Inc. dated December 19, 1997.
4.5(1) Consulting Agreement between the Registrant and Kinexsys dated October
30, 1997.
4.6(1) Warrant Agreement between the Registrant and Baytree Associates, Inc.
dated June 20, 1997.
4.7 Agreement between the Registrant and Yungtai Hsu ("Hsu") dated February
1, 1999, effective as of December 31, 1998. (Reference is made to
Exhibit 7.1 to the Registrant's Form 8-K filed February 26, 1999,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.8 Subscription Agreement between the Registrant and Hsu, dated February
11, 1999. (Reference is made to Exhibit 7.2 to the Registrant's Form
8-K filed February 26, 1999, Commission File No. 1-10581, which exhibit
is incorporated herein by reference.)
4.9 Registration Rights Agreement between the Registrant and Hsu, dated
February 11, 1999. (Reference is made to exhibit 7.3 to the
Registrant's Form 8-K filed February 26, 1999, Commission File
No.1-10581, which exhibit is incorporated herein by reference.)
4.10 Warrant issued by the Registrant for the benefit of Hsu, dated February
11, 1999. (Reference is made to exhibit 7.4 to the Registrant's Form
8-K filed February 26, 1999, Commission File No. 1-10581, which exhibit
is incorporated herein by reference.)
II-7
<PAGE>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NO.
- --------------------------------------------------------------------------------
4.11 Subscription Agreement between the Registrant and Conrex Pharmaceutical
Corporation ("Conrex"), dated February 11, 1999. (Reference is made to
exhibit 7.5 to the Registrant's Form 8-K filed February 26, 1999,
Commission File No. 1-10581, which exhibit is incorporated herein by
reference.)
4.12 Registration Rights Agreement between the Registrant and Conrex, dated
February 11, 1999. (Reference is made to exhibit 7.6 to the
Registrant's Form 8-K filed February 26, 1999, Commission File No.
1-10581, which exhibit is incorporated herein by reference.)
5.1(1) Opinion of Parker Chapin Flattau & Klimpl, LLP.
23.1(1) Consent of Deloitte & Touche LLP.
23.2(1) Consent of Parker Chapin Flattau & Klimpl, LLP (included in Exhibit 5.1
hereto).
24.1(1) Power of Attorney (see page II-5 of this Registration Statement).
- ------------------------
(1) Filed herewith.
II-8
EXHIBIT 4.2.2
Addendum #1 to Consulting Agreement
Dated October 23, 1996
Between Plexus Ventures, Inc. and Bentley Pharmaceuticals
The second paragraph of the section "Success Fees", page two of the
Agreement is expanded to read as follows:
Plexus Ventures will have the option to receive success fees in shares
of Bentley Pharmaceuticals, in cash or in a combination of the two. The value of
Bentley shares for this purpose will be calculated, on a transaction by
transaction basis, as the average of the daily closing prices for the 20 trading
days immediately preceding the signing dates of Letters-of Intent, or equivalent
undertakings, confirming the transactions.
Accepted for:
Plexus Ventures, Inc. Bentley Pharmaceuticals
/s/ John F. Chappell /s/ James R Murphy
John F. Chappell James R. Murphy
President Chief Executive Officer
Date: July 10, 1997 Date: 18 July 1997
EXHIBIT 4.2.3
PLEXUS VENTURES, INC.
November 24, 1997
Mr. James R. Murphy
Chairman and CEO
Bentley Pharmaceuticals, Inc.
4830 West Kennedy Boulevard
Suite 550
Tampa, FL 33609
Dear Jim:
We are pleased to offer this letter Agreement as evidence of the
intention of the parties hereto to both extend and modify Plexus Ventures,
Inc.'s consulting relationship with Bentley Pharmaceuticals, Inc. as documented
in our letter to you (dated October 15, 1996) accepted on October 23, 1996 and
as amended via Addendum #1 thereto accepted July 18, 1997. This letter
incorporates the key provisions of the October 23, 1996 Agreement, as amended,
and records certain changes which are effective commencing October 23, 1997.
This letter Agreement becomes the surviving document descriptive of Plexus
Ventures, Inc.'s consulting relationship with Bentley Pharmaceuticals, Inc.
The Parties to this Agreement are Bentley Pharmaceuticals, Inc., a
corporation of the State of Florida, having corporate offices at 4830 West
Kennedy Boulevard, Suite 550, Tampa, Florida 33609 (Bentley) and Plexus
Ventures, Inc., a corporation of the Commonwealth of Pennsylvania, having
offices at 1787 Sentry Parkway West, Building 18, Suite 301, Blue Bell,
Pennsylvania 19422 (Plexus).
The key provisions of the October 23, 1996 Agreement as amended on July
18, 1997 are incorporated below as follows:
1. Mission. Plexus' mission shall be to work with Bentley over a
period of twelve (12) months to identify appropriate new
acquisition opportunities for Bentley. Plexus shall work with
Bentley to define the characteristics of the properties and
companies which can contribute to Bentley sales and profits in
the U.S. and targeted European markets. Plexus shall further
assist Bentley in designing realistic deal structures,
including financing strategy for deals, and in negotiating and
closing acquisitions.
<PAGE>
Mr. James R. Murphy -2- November 24, 1997
Bentley Pharmaceuticals, Inc.
2. Term. Bentley and Plexus envision the term of this Agreement
to extend for twelve (12) months from the date of acceptance
by Bentley; however, both parties agree to a review of the
relationship after six (6) months time, at which point either
Party may terminate the Agreement.
3. Compensation. Bentley shall grant Plexus thirty thousand
(30,000) common shares which Plexus shall earn at the rate of
two thousand, five hundred (2,500) per month during a twelve
(12) month commitment by Bentley.
4. Success Fees. Plexus and Bentley agree that a success fee of
the Lehman type [five percent (5%) on the initial tranche of
value, four percent (4%) on the next higher tranche, etc.]
shall be paid to Plexus on each completed deal. Since any
contemplated deal will likely require non-conventional
financing, it is difficult to suggest a universal formula a
priori. Plexus and Bentley shall agree on a structure, deal by
deal, as soon as the Parties perceive the outlines of the
transaction.
5. Success Fees Payment. Plexus shall have the option to receive
success fees in shares of Bentley, in cash or in a combination
of the two. The value of Bentley shares for this purpose shall
be calculated, on a transaction by transaction basis, as the
average of the daily closing prices for the twenty (20)
trading days preceding the signing dates of Letters-of-Intent,
or equivalent undertakings, confirming the transactions.
6. Expenses. Plexus shall bill Bentley nine thousand dollars
($9,000) each six months for recovery of general overheads. In
addition, project related out-of-pocket expenses shall be
separately recovered by Plexus from Bentley under
prior-approval guidelines set by Bentley.
The following changes to the above-listed provisions are
effective October 23, 1997:
1. Term. Plexus and Bentley agree to extend the term of the
Agreement beyond October 23, 1997 for the first to occur of
(a) six (6) months or (b) the conclusion of the Schwarz Pharma
USA and American Home Products transactions which are subject
to previously executed Letters-of-Intent, or equivalent
undertakings, with those companies.
2. Mission. Bentley and Plexus agree that the Mission accepted by
Plexus in the October 23, 1996 Agreement has been
significantly expanded by mutual consent of the Parties. In
addition to the Mission described in that Agreement, Plexus
shall continue to provide Bentley with help in identifying
potential financing sources for Bentley's transactions with
Schwarz Pharma USA and American Home Products and in providing
strategic and business advice to Bentley in working to close
on such financing.
<PAGE>
Mr. James R. Murphy -3- November 24, 1997
Bentley Pharmaceuticals, Inc.
3. Compensation. During the extended term of the Agreement,
Bentley shall grant Plexus four thousand (4,000) shares of
Bentley common stock per month.
4. Success Fees. The Parties agree that success fees due to
Plexus for completed transactions shall be calculated based on
the value in cash and stock paid by Bentley to third parties
to acquire rights to tangible and intangible assets however
these are defined.
5. Other. All other terms of the October 23, 1996 Agreement shall
remain in force during the extension of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the
23 October, 1997.
Plexus Ventures, Inc. Bentley Pharmaceuticals, Inc.
/s/ John F. Chappell /s/ James R. Murphy
- ------------------------- -------------------------
By: John F. Chappell By: James R. Murphy
President Chairman and CEO
EXHIBIT 4.4
DOMINICK & DOMINICK
- ---------------------
INCORPORATED
Member Principal Exchanges
Financial Square
32 Old Slip
New York, New York 10005
TEL 212 558 8800
FAX 212 797 5268
December 19, 1997
Mr. James R. Murphy
Chairman and Chief Executive Officer
Bentley Pharmaceuticals, Inc.
One Urban Centre, Suite 550
4830 West Kennedy Boulevard
Tampa, FL 33609-2517
Dear Jim:
You have requested that Dominick & Dominick, Incorporated ("Dominick"), act as
the financial advisor for Bentley Pharmaceuticals, Inc. ("Bentley"), on an
on-going basis. We have had certain discussions concerning our role as Bentley's
financial advisor and, in this regard, we are pleased to confirm the following:
1. Dominick will act as financial advisor for Bentley.
2. In its capacity as financial advisor, Dominick will be available to
advise Bentley on investment banking and other matters such as mergers,
acquisitions, potential public and private financings, bank borrowings,
licensing and other business arrangements such as corporate
partnerships.
3. As part of its on-going financial advisory relationship, Dominick will
be available to provide merger and acquisition advisory services for
Bentley. In the event Bentley uses Dominick's advisory services or
sources (other than with respect to the proposed acquisition of certain
products and facilities of Schwarz Pharma, Inc., and Wyeth-Ayerst) and
(a) acquires substantial stock or assets of another entity, or (b)
another entity acquires substantial stock or assets of Bentley,
Dominick shall be entitled to its normal merger and acquisition fee on
such transaction. The fee shall be 3.0% of the total value of the
transaction. Said fee will be paid on the sale of all or any part of
Bentley's Spanishoperation to Schwarz Pharma. Dominick's fee shall be
payable in cash at the time of the consummation of any such
transaction.
4. As part of its financial advisory relationship, Dominick will employ
its best efforts to introduce Bentley to sources that will consider
providing financing to Bentley. Specific financing fees will be covered
in a separate agreement.
5. Fees described in paragraphs three and four herein shall be payable to
Dominick for any transactions described therein with any party or
entity covered thereby with whom
<PAGE>
DOMINICK & DOMINICK Mr. James R. Murphy
- ------------------- December 19, 1997
INCORPORATED Page 2
Member Principal Exchanges
discussions were held during the term of this engagement and with which
a transaction is consummated during the first six month period
following the termination of this engagement and shall be 60% of the
amount if the transaction is closed in the second six months, and 30%
in the third six months following the termination of this engagement.
6. Dominick will receive reimbursement for all of its reasonable
out-of-pocket expenses incurred as a result of its activities for and
on behalf of Bentley, to be reimbursed within 30 days of presentment of
supporting documentation to Bentley.
7. Dominick and/or its assigns will purchase for $200.00 a five-year
warrant to purchase 425,000 common shares (the "Warrant Shares") of
Bentley immediately upon the Bentley Board of Directors' approval of
this agreement. The warrant is exercisable at $2.50 per warrant share,
or $1,062,500, at any time, at the holder's option, in whole or in
part, during its five year life. The closing price of the common was
$2.25 on December 18, 1997. The warrant shall be subject to customary
terms, including antidilution protection as to stock splits and
recapitalizations, and the holder of the warrant or any shares
receivable upon exercise will have "piggy-back" registration rights at
any time Bentley files a registration statement.
8. Bentley will pay Dominick for its financial advisory services, over and
above any transaction consummation fees, an initial engagement fee of
$25,000 upon execution of this agreement. Further, Bentley agrees to
pay Dominick a quarterly retainer fee of $15,000, payable at the start
of each quarterly period commencing February 1, 1998. Bentley will pay
a supplemental $5,000 fee at the start of each quarterly period in
which Dominick arranges for a European road show, at Bentley's request.
9. Except for references and descriptions that Bentley may be obligated to
include in its SEC filings and disclosure statements or as otherwise
required by law, Bentley shall not issue any press release, statement,
notice, document or other instrument referring to or mentioning
Dominick without Dominick's prior written approval.
10. As Dominick will be acting on Bentley's behalf, Bentley agrees to
indemnify and hold harmless Dominick (including any affiliated
companies and respective officers, directors, employees and controlling
persons) from and against all claims, liabilities, losses, damages and
expenses (including reasonable expenses of counsel) as they are
incurred in connection with any proceeding, whether or not Dominick is
a party thereto, relating to or arising out of such engagement or
Dominick's role in connection therewith. The foregoing indemnification
is effective immediately in respect of all events occurring or omitted
prior to or after the date hereof.
11. This agreement shall be governed by the laws of the State of New York.
<PAGE>
DOMINICK & DOMINICK Mr. James R. Murphy
- ------------------- December 19, 1997
INCORPORATED Page 3
Member Principal Exchanges
12. This agreement, except for the $25,000 sign-on fee and the terms of
paragraph 10, is cancelable by Bentley or Dominick by written
notification up until midnight January 14, 1998. If not cancelled, this
agreement will be in effect for the 18 months from the above date
through June 18, 1999.
We look forward to a long and mutually rewarding relationship and we are
confident that we can assist Bentley in various aspects of its business and
intended growth.
Very truly yours,
DOMINICK & DOMINICK INCORPORATED
By: /s/ John R. Doss
--------------------------------
Mr. John R. Doss
Executive Vice President
The foregoing is agreed to
and accepted by the Board
of Directors:
BENTLEY PHARMACEUTICALS, INC.
By: /s/ James R. Murphy
--------------------------------
Mr. James R. Murphy
Chairman & CEO
EXHIBIT 4.5
CONSULTING AGREEMENT ("AGREEMENT")
--------------------
AGREEMENT entered into as of October 30, 1997, between Kinexsys and Bentley
Pharmaceuticals (hereinafter, the "Company").
1. Consulting Duties
Implement an investor interest program that contacts & informs current
Bentley shareholder's of works underway at the company. Establish a
comprehensive and reliable database of all investors. Finalize warrant
conversion. Provide introductions to Kinexsys' network of brokers,
institutional money managers and high net-worth individuals. Assist
with the content, format, and timeliness of press releases.
2.0 Compensation and Benefits
2.1 Pursuant to Paragraph 1.1 of this Agreement, Bentley agrees to pay
Kinexsys a fee of four thousand seven hundred fifty dollars ($4750. US)
per month for a period of one year, with a review at six months and
option to extend for a second six months, with the first and sixth
month payments of nine thousand five hundred dollars ($9500. US) due
and payable on the date this agreement is executed by Bentley and the
remainder due in four equal monthly installments of four thousand seven
hundred and fifty dollars ($4750. US) due and payable on the monthly
anniversary of the execution of this agreement. If at the end of the
initial six months Bentley uses its option and renews this contract,
Kinexsys will receive ($4750.)
monthly for the remaining six months.
Further, Bently agrees to award Kinexsys 100,000 (one hundred
thousand) freely transferable incentive warrants written at
the signing of this agreement and struck as follows:
Thirty thousand (30,000) warrants struck at Bentley's bid
price at the opening of trading on the day of the signing of
this agreement, and exercisable after the common stock share
price trades at or above four dollars ($4. US) per share for
twenty trading days. These warrants, if unexercised, will
expire nine (9) months from the date of the signing of this
agreement.
Thirty thousand (30,000) warrants with a strike price of four
dollars ($4. US) per share and exercisable after the common
stock share price trades at five dollars and fifty cents
($5.50 US) per share for twenty trading days. These warrants,
if unexercised, will expire fifteen (15) months from the date
of the signing of this agreement.
Forty thousand (40,000) warrants with a strike price of four
dollars ($4. US) per share, and exercisable at seven dollars
and fifty cents ($7.50 US) per share. These warrants if
unexercised will expire twenty-four (24) months from the date
of the signing of this agreement.
a. Bentley Pharmaceuticals agrees to award the one hundred
thousand (100,000) warrants previously disclosed in section
2.1 at the above agreed upon prices notwithstanding any other
section, clause or paragraph hereunder written. In addition,
the warrants discussed in section 2.1 will remain the property
of Kinexsys notwithstanding any subsequent term of engagement
by Bentley Pharmaceuticals or the termination of Kinexsys for
any reason or cause whatsoever.
2.2 Bentley shall also reimburse Kinexsys for all reasonable pre-approved
out-of-pocket expenses which shall be incurred by Kinexsys in
connection with the performance of all duties and
<PAGE>
responsibilities hereunder including travel, lodging, meals,
entertainment, materials expenses, telephone and other communication
costs, etc. to be paid within seven days of receipt by Bentley of
invoices for such expenses.
2.3 Nothing contained herein shall prevent Bentley from modifying or
terminating any Company plan, policy, benefit or program.
2.4 Kinexsys hereby agrees to forthwith disclose any conflicts of interest
which to the best of its knowledge currently exist or which arise
during the term of this Agreement.
3.0 Termination of Consulting Agreement
3.1 If during the period of this Agreement, Kinexsys shall become unable to
provide the agreed upon duties and services for a period of more than
two (2) months, all obligations of Bentley shall terminate.
3.2 Bentley may at any time, by written notice to Kinexsys, terminate the
consulting services herein described for "Cause" as of the date of such
notice. For purposes of this Agreement, "Cause" shall be defined as the
following:
the commission by Kinexsys, in connection with the performance
of their duties or obligations hereunder, of any act or acts
of gross negligence or willful misconduct.
In the event of such termination for "Cause" pursuant to this section
3.2, Bentley shall be liable and shall pay to Kinexsys only that part
of the compensation which has been fully earned and unpaid as of the
date of Kinexsys' receipt of such written notice. Bentley shall not be
liable for and shall not pay Kinexsys any compensation after the date
of such written notice. The date of Kinexsys' receipt of such written
notice shall be deemed to be a date not later than three (3) calendar
days after its date of mailing or upon its date of receipt by Kinexsys,
whichever date is sooner.
3.3 Either party may terminate the agreement (i.e., quit) only upon thirty
(30) days prior written notice to the other party. If Kinexsys gives
such notice, Bentley, may, in its discretion, waive such notice period
and the Agreement shall be terminated as of the date of this notice. If
Bentley gives such notice Kinexsys, may, in its discretion, waive such
notice period and the Agreement shall be terminated as of the date of
this notice. Upon termination of this Agreement by Kinexsys pursuant to
this Section 3.3, thereafter Bentley shall only be obligated to pay any
previously unpaid and incurred expenses.
4.0 Protection of Confidential Information, Non Competition
4.1 The parties acknowledge that the business of Bentley and its affiliates
is by its nature a world-wide business and that the products and
services of Bentley and its affiliates may be used or made anywhere in
the world. In addition, the business, products, and services of Bentley
and its affiliates do not require them to maintain a physical location
close to their customers and participants. In addition, Kinexsys agrees
to the following restrictive covenants:
4.1.1 Kinexsys will not, during the period of their engagement hereunder or
at any time thereafter, divulge, use, furnish, disclose or make
available to anyone other than Bentley or its affiliates, or its
directors or officers as appropriate, any Confidential Information,
except as may be necessary in the ordinary course of performing their
duties as an engaged consultant of Bentley or any affiliate of Bentley.
4.1.2 For purposed of this Agreement, "Confidential Information" shall mean
any and all information, data and knowledge that (i) has been created,
discovered, developed, or otherwise become known
-2-
<PAGE>
to Bentley or any affiliate of Bentley (including, without limitation,
information, data, and knowledge created, discovered, developed or made
known by Kinexsys during the period of or arising out of their
engagement by Bentley) or in which property rights have been assigned
or otherwise conveyed to Bentley or any affiliate, which information,
data, or knowledge has commercial value in the business in which
Bentley or any affiliate of Bentley is engaged, except such
information, data, or knowledge, as is or becomes known to the public
without violation of the terms of this Agreement, or (ii) arises out of
or relates to the legal or business affairs of Bentley, or any
affiliate thereof (including without limitation, any information which
Bentley considers to be privileged.) By way of illustration, but not
limitation, Confidential Information includes trade secrets, processes,
formulas, know-how, improvements, discoveries, developements, designs,
inventions, techniques, marketing plans, strategies, investment plans,
forecasts, new products, unpublished financial statements or parts
thereof, budgets, projections, licenses, prices, costs, and any
information relating to the legal or business affairs of Bentley or any
affiliate thereof.
4.1.3 Notwithstanding any provision of this Section 4.1 to the contrary,
Kinexsys shall be entitled to retain any financial statements, budgets,
projections, tax statements, organizational documents of Bentley or any
affiliate thereof which may have been delivered to Kinexsys in their
capacity as a member or shareholder of Bentley or any affiliate of
Bentley, and Kinexsys shall have the right to disclose such financial
statements, budgets, projection, tax statements and organizational
documents to Kinexsys' accountants, attorneys, and advisors and in
connection with the provision by any such party of personal financial
or legal advise or services to Kinexsys.
4.2 If Kinexsys commits a breach of any of the provisions of Section 4.1,
Bentley shall have the right and remedy to have the provisions of the
Agreement specifically enforced by way of preliminary and/or permanent
injunction by any court having jurisdiction, its being acknowledged and
agreed by Kinexsys and Bentley that any such breach will cause
irreparable injury to Bentley and that money damages will not provide
an adequate remedy to Bentley. Such right and remedy shall be in
addition to, and not in lieu of, any other rights and remedies
available to Bentley under law or in equity.
4.3 If any of the covenants or provisions contained in Section 4.1 or 4.2,
or any part thereof, is hereafter construed to be invalid or
unenforceable in any respect, the same shall not affect the remainder
of the covenant, covenants or provisions which shall be given the
maximum effect possible without regard to the invalid portions and the
remainder shall then be fully enforceable.
4.4 If any of the covenants contained in Section 4.1 or 4.2 or any part
thereof, is held to be unenforceable because of the duration of such
provision or the geographical or product/business area covered thereby,
the parties agree that such provisions shall be reformed and construed
to reduce the duration and/or area of such provision to the extent
necessary for enforceability and, in its reduced form, said provision
shall then be fully enforceable.
4.6 The parties hereto intend to and hereby confer jurisdiction to enforce
the covenants contained in Sections 4.1 or 4.2 upon the courts of the
State of California (and the federal courts resident in such State).
5.0 Notices
All notices or their communications given pursuant hereto by one party
to another shall be in writing and deemed given when (a) delivered by
hand, (b) sent by fax/telecopier (with receipt confirmed) provided that
a copy is mailed the same day by registered or certified mail, postage
prepaid, return receipt requested, or (c) when recieved by the
addressee, if sent by Express Mail, Federal Express, or other express
delivery service (receipt requested), in each case to the appropriate
addresses, and fax/telecopier numbers for Bentley and Kinexsys set
forth below (or to such address and/or fax/telecopier numbers as either
party may designate by notice to the other from time to time.
-3-
<PAGE>
If to Bentley, to it at:
Bentley Pharmaceuticals
4380 West Kennedy Blvd.
Tampa, FL 33609
Attention: James R. Murphy
If to Kinexsys, to them at:
Kinexsys
Box 7872
Newport Beach, CA 92660
Attn: Timothy R. Forstrom
Or, delivered by hand.
5. General
5.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California. Except as
otherwise expressly provided in this Agreement, if under such law, any
portion of this Agreement is at any time deemed to be in conflict with
any applicable statute, rule, regulation, ordinance, or principle of
law, such portion shall be deemed to be modified or altered to the
extent necessary to conform thereto, or, if that is not possible, to be
omitted from this Agreement; and the invalidity of any such portion
shall not affect the force, effect and validity of the remaining
portion hereof.
5.2 The article headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.
5.3 This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating
to the subject matter hereof.
5.4 This Agreement may not be amended, modified, superseded, or waived,
except by a written instrument executed by both parties, hereto, or in
the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term
or covenant contained in this Agreement whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this
Agreement.
5.5 In the event that any action, suit or other proceeding in law or in
equity is brought to enforce any provision of this Agreement, and such
action, suit or proceeding results in a monetary judgment or the
granting of any injunctive relief, the court costs and reasonable
attorneys fees of the prevailing party shall, on demand of the
prevailing party, be paid by the other party.
6.0 Indemnification
-4-
<PAGE>
Bentley Pharmaceuticals, agrees to indemnify Kinexsys, Timothy R.
Forstrom and other Indemnified Persons, following the execution of this
Agreement, as set forth in Attachment A, which is incorporated and made
part of this Agreement.
7.0 Severability
If any provision of this Agreement is hereafter construed to be invalid
or unenforceable in any respect, the same shall not affect the
remaining provisions of this Agreement, without regard to the invalid
portion, and any such invalid provisions shall be reformed and
construed to the extent necessary to permit their enforceability so as
to reflect the intent of the partes hereto.
8.0 Representation
Bentley and Kinexsys represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the
performance of each of their respective obligation under this Agreement
will not violate any agreement between each of them and any other
person, firm, or organization.
9.0 Survivorship
The respective rights and obligations of the parties hereunder shall
survive any termination of Kinexsys' employment or this Agreement to
the extent necessary to the intended preservation of such rights and
obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Bentley Pharmaceuticals Kinexsys
By: /s/ James Murphy By: /s/ Timothy Forstrom
---------------------- -------------------------------
James Murphy, CEO Timothy Forstrom, Principal
-5-
EXHIBIT 4.6
June 20, 1997
BENTLEY PHARMACEUTICALS, INC.
The Transferability of this Warrant is
Restricted as Provided in Article 3
In consideration of $.001 per Warrant and other good and valuable
consideration, the receipt of which is hereby acknowledged by BENTLEY
PHARMACEUTICALS, INC., One Urban Centre, Suite 548, 4830 West Kennedy Boulevard,
Tampa, Florida 33609, a Florida corporation ("the Company"), Baytree Associates,
Inc. is hereby granted the right to purchase, at the initial exercise price of
$3.50 per share, at any time until 5:00 P.M., New York time, on June 20, 2001,
25,000 (twenty-five thousand) shares of the Company's common stock, $.02 par
value per share ("Shares").
This Warrant initially is exercisable at a price of $3.50 per Share
payable in cash or by certified or official bank check in New York Clearing
House funds, subject to adjustment as provided in Article 6 hereof. Upon
surrender of this Warrant, with the annexed Subscription Form duly executed,
together with payment of the Purchase Price (as hereinafter defined) for the
Shares purchased, at the offices of the Company, the registered holder of this
Warrant ("Holder" or "Holders") shall be entitled to receive a certificate or
certificates for the Shares so purchased.
1. Exercise of Warrant.
The purchase rights represented by this Warrant are exercisable at the
option of the Holder hereof, in whole or in part (but not as to fractional
Shares underlying this Warrant), during any period in which this Warrant may be
exercised as set forth above. In the case of the purchase of less than all the
<PAGE>
Shares purchasable under this Warrant, the Company shall cancel this Warrant
upon the surrender hereof and shall execute and deliver a new Warrant of like
tenor for the balance of the Shares purchasable hereunder.
2. Issuance of Certificates.
Upon the exercise of this Warrant, the issuance of certificates for
Shares underlying this Warrant shall be made forthwith (and in any event within
five business days thereafter) without charge to the Holder hereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Articles 3
hereof) be issued in the name of, or in such names as may be directed by, the
Holder hereof; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than that of the Holder
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The certificates
representing the Shares underlying this Warrant shall be executed on behalf of
the Company by the manual or facsimile signature of one of the present or any
future Chairman or President of the Company and any present or future Vice
President or Secretary of the Company.
3. Restriction on Transfer of Warrant.
The Holder of this Warrant, by its acceptance hereof, covenants and
agrees that this Warrant is being acquired as an investment and not with a view
to the distribution hereof, and that it may not be exercised, sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part unless in
the opinion of
-2-
<PAGE>
counsel concurred in by the Company's counsel such transfer is in compliance
with all applicable securities laws.
4. Price.
4.1 Initial and Adjusted Purchase Price. The initial purchase price
shall be $3.50 per Share. The adjusted purchase price shall be the price which
shall result from time to time from any and all adjustments of the initial
purchase price in accordance with the provisions of Article 5 hereof.
4.2 Purchase Price. The term "Purchase Price" herein shall mean the
initial purchase price or the adjusted purchase price, depending upon the
context.
5. Adjustments of Purchase Price and Number of Shares.
5.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding Shares, the Purchase Price shall forthwith
be proportionately decreased in the case of subdivision or increased in the case
of combination.
5.2 Adjustment in Number of Shares. Upon each adjustment of the
Purchase Price pursuant to the provisions of this Article 5, the number of
Shares issuable upon the exercise of this Warrant shall be adjusted to the
nearest full Share by multiplying a number equal to the Purchase Price in effect
immediately prior to such adjustment by the number of Shares issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Purchase Price.
-3-
<PAGE>
5.3 Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding Shares (other than a change in par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or in the case of any consolidation of the Company
with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Shares, except a change as a result of a subdivision or combination of such
shares or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of the property of the Company as an entirety,
the Holder of this Warrant shall thereafter have the right to purchase upon the
exercise of this Warrant the kind and number of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder were the owner of the
Shares underlying this Warrant immediately prior to any such events at the
Purchase Price in effect immediately prior to the record date for such
reclassification, change, consolidation, merger, sale or conveyance as if such
Holder had exercised this Warrant.
6. (a) Registration Rights.
(i) Each time that the Company proposes for any reason to
Register any of its securities, other than pursuant to a Registration Statement
on Form S-4 or Form S-8 or similar or successor forms (collectively, "Excluded
Forms"), the Company shall promptly give written notice of such proposed
Registration to the registered Holder of this Warrant, which shall offer such
Holder the right to request inclusion of any Registrable Securities in the
proposed Registration.
-4-
<PAGE>
(ii) Each Holder shall have 30 days from the receipt of such
notice to deliver to the Company a written request specifying the number of
shares of Registrable Securities such Holder intends to sell and the Holder's
intended plan of disposition.
(iii) Upon receipt of a written request pursuant to Section
(6) (a), the Company shall promptly use its best efforts to cause all such
Registrable Securities to be Registered, to the extent required to permit sale
or disposition as set forth in the written request.
(iv) Notwithstanding the foregoing, if the managing
underwriter, determines and advises in writing that the inclusion of all
Registrable Securities proposed to be included in the Registration Statement,
together with any other issued and outstanding shares of common stock proposed
to be included therein by holders other than the Holder of Registrable
Securities (such other shares hereinafter collectively referred to as the "Other
Shares"), would interfere with the successful marketing of the securities
proposed to be included in the underwritten public offering, then the number of
such shares to be included in such Registration Statement shall be reduced, and
shares shall be excluded from such underwritten public offering in a number
deemed necessary by such managing underwriter, by excluding equal numbers of the
Registrable Securities and the Other Shares proposed to be registered, pro rata,
based on the number of shares of common stock the Holder proposed to include.
The shares of common stock that are excluded from the Registration Statement
shall be withheld from the market by the holders thereof for a period, not to
exceed 180 days, that the managing underwriter reasonably determines as
necessary in order to effect the underwritten public offering.
-5-
<PAGE>
(b) Expenses. The Company shall pay all Registration Expenses incurred
by the Company in complying with this Section 6; provided, however, that all
underwriting discounts and selling commissions applicable to the Registrable
Securities covered by registrations effected pursuant to Section 6 (a) hereof
shall be borne by the seller or sellers thereof, in proportion to the number of
Registrable Securities sold by such seller or sellers.
7. Exchange and Replacement of Warrant.
This Warrant is exchangeable without expense, upon the surrender hereof
by the registered Holder at the principal executive office of the Company for a
new Warrant of like tenor and date representing in the aggregate the right to
purchase the same number of Shares as are purchasable hereunder in such
denominations as shall be designated by the Holder hereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it, and reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant.
8. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of Shares
-6-
<PAGE>
on the exercise of this Warrant, nor shall it be required to issue scrip or pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated pursuant to Section 5.2.
9. Reservation and Listing of Securities.
The Company shall at all times reserve and keep available out of its
authorized Shares, solely for the purpose of issuance upon the exercise of this
Warrant, such number of Shares as shall be issuable upon the exercise hereof and
thereof. The Company covenants and agrees that, upon exercise of this Warrant
and payment of the Purchase Price therefor, all Shares issuable upon such
exercise shall be duly and validly issued, fully paid and non-assessable. As
long as this Warrant shall be outstanding, the Company shall use its reasonable
best efforts to cause all Shares issuable upon the exercise of this Warrant to
be listed (subject to official notice of issuance) on all securities exchanges
on which the Shares of the Company's common stock may then be listed and/or
quoted on NASDAQ.
10. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Warrant, to the address of such
Holder as shown on the books of the Company; or
-7-
<PAGE>
(b) If to the Company, to the address set forth on the first page of
this Warrant or to such other address as the Company may designate by notice to
the Holders.
11. Successors.
All the covenants, agreements, representations and warranties contained
in this Warrant shall bind the parties hereto and their respective heirs,
executors, administrators, distributees, successors and assigns.
12. Headings.
The Article and Section headings in this Warrant are inserted for
purposes of convenience only and shall have no substantive effect.
13. Law Governing.
This Warrant shall be construed and enforced in accordance with, and
governed by, the laws of the State of Florida.
-8-
<PAGE>
WITNESS the seal of the Company and the signature of its duly
authorized officers.
BENTLEY PHARMACEUTICALS, INC.
[SEAL]
By /s/ James R. Murphy
---------------------------------
James R. Murphy
President & CEO
Attest:
/s/ Michael D. Price
- ---------------------------
Michael D. Price, Secretary
-9-
<PAGE>
SUBSCRIPTION FORM
(To be Executed by the Registered Holder
in order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase __________ Shares by this Warrant according to the conditions hereof
and herewith makes payment of the Purchase Price of such Shares in full.
--------------------------------
Signature
--------------------------------
Address
Dated: , 19 .
-------------- ---- --------------------------------
Social Security Number or
Taxpayer's Identification Number
-10-
EXHIBIT 5.1
PARKER CHAPIN FLATTAU & KLIMPL, LLP
COUNSELLORS AT LAW
1211 AVENUE OF THE AMERICAS
NEW YORK, NY 10036-8735
(212) 704-6000
FAX (212) 704-6288
June 14, 1999
Bentley Pharmaceuticals, Inc.
65 Lafayette Road
No. Hampton, NH 03862
Re: Bentley Pharmaceuticals, Inc.
-----------------------------
Dear Sir or Madam:
We have acted as counsel to Bentley Pharmaceuticals, Inc. (the
"Company") in connection with its filing of a registration statement on Form S-3
(the "Registration Statement") relating to an aggregate of 2,002,489 shares of
common stock, par value $.02 per share (the "Common Stock"), of the Company, to
be sold by certain selling stockholders, as set forth on Annex A hereto, and as
more particularly described in the Registration Statement.
In our capacity as counsel to the Company, we have examined
the Company's Amended and Restated Articles of Incorporation and By-laws, as
amended to date, the Company's proposed Certificate of Incorporation and Bylaws,
as set forth in the Proxy Statement issued in connection with the 1999 Annual
Meeting of Stockholders, and the minutes and other corporate proceedings of the
Company, the Registration Statement and the exhibits thereto.
With respect to factual matters, we have relied upon
statements and certificates of officers of the Company. We have also reviewed
such other matters of law and examined and relied upon such other documents,
records and certificates as we have deemed relevant hereto. In all such
examinations we have assumed conformity with the original documents of all
documents submitted to us as conformed or photostatic copies, the authenticity
of all documents submitted to us as originals and the genuineness of all
signatures on all documents submitted to us.
<PAGE>
Bentley Pharmaceuticals, Inc.
June 14, 1999
Page -2-
On the basis of the foregoing, we are of the opinion that:
(a) an aggregate of 672,489 shares of Common Stock of the
Company to be sold by the selling stockholders set forth on Annex A hereto have
been validly authorized and legally issued and are fully-paid and
non-assessable;
(b) an aggregate of 40,000 shares of Common Stock of the
Company issuable upon exercise of options granted to certain officers and
directors of the Company and a former officer and director of the Company as set
forth on Annex A, upon issuance and payment in accordance with the terms of the
respective option contracts, will be legally issued, fully-paid and
non-assessable; and
(c) an aggregate of 1,290,000 shares of Common Stock of the
Company issuable upon exercise of certain warrants to be sold by the selling
stockholders set forth on Annex A hereto, upon issuance and payment in
accordance with the terms of the respective agreements, will be legally issued,
fully-paid and non-assessable.
The following issuances are subject to the approval by the
American Stock Exchange of the listing of additional shares of Common Stock: (i)
666,089 of the shares of Common Stock referred to in paragraph (a); (ii) all of
the shares of Common Stock referred to in paragraph (b); and (iii) 1,140,000 of
the shares of Common Stock referred to in paragraph (c).
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference made to us under the caption
"Legal Matters" in the prospectus constituting part of the Registration
Statement.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
<PAGE>
ANNEX A
-------
SELLING STOCKHOLDERS
Maximum
Amount to
Selling Stockholder be Sold
- ------------------- ---------
Robert M. Stote (a) 15,000
Walter Light (c) 350,000
Plexus Ventures, Inc. (a) 66,000
Ranald Stewart, Jr. (b) 40,000
Jeffery Harris (a) 6,400
Dominick & Dominick (c) 425,000
Kinexsys (c) 40,000
Baytree Associates, Inc. (c) 25,000
Conrex Pharmaceutical Corporation (a) 359,282
Yungtai Hsu (a)(c) 675,807
- ----------------------
(a) Refers to paragraph (a) of the Parker Chapin Flattau & Klimpl, LLP,
opinion to Bentley Pharmaceuticals, Inc., dated June 14, 1999 (the
"Opinion").
(b) Refers to paragraph (b) of the Opinion.
(c) Refers to paragraph (c) of the Opinion.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Bentley Pharmaceuticals, Inc. on Form S-3, of our reports dated March 26, 1999,
appearing in the Annual Report on Form 10-K of Bentley Pharmaceuticals, Inc. for
the year ended December 31, 1998 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Tampa, Florida
June 11, 1999
