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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB/A
AMENDMENT NO. 1
(Amendment sets forth a corrected "Recent Developments" section
to Part II - Item 5)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly Commission File
period ended March 31, 1997 Number 000-18881
BRADLEY PHARMACEUTICALS, INC.
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(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2581418
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
383 ROUTE 46 WEST
FAIRFIELD, NEW JERSEY 07004
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 882-1505
N/A
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(Former name, former address and former fiscal year, if
changed since last year)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirement for the past 90 days.
YES X NO
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State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Number of Shares
Title of Each Class Outstanding as of
of Common Stock July 15, 1997
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Class A, no par value per share 7,622,122
Class B, no par value per share 431,552
Transitional Small Business Disclosure Format (check one):
YES NO X
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<PAGE>
PART II - ITEM 5. OTHER INFORMATION
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RECENT DEVELOPMENTS
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On June 2, 1997, the Board of Directors of the Company
authorized the issuance of 254,311 shares of Class B Common Stock
(the "Reissued Class B Stock") to Daniel Glassman, the Company's
President and Chief Executive Officer. The Reissued Class B
Stock was issued to Mr. Glassman in consideration for, among
other things, Mr. Glassman's delivery to the Company, for
cancellation, of 254,311 shares of Class A Common Stock of the
Company. The issuance of the Reissued Class B Stock to Mr.
Glassman was the result of the Board of Directors' decision to
restore management status quo following the Board's recently
learning that Mr. Glassman had pledged (the "Pledge"), in April
1995, 254,311 shares of Class B Common Stock then owned by Mr.
Glassman (the "Pledged Shares") to secure certain obligations of
Mr. Glassman to an unaffiliated third party lender. Mr. Glassman
has delivered to the Company a letter in which he states that the
Pledge was an inadvertent error on his part and that had he been
aware of the potential ramifications of the Pledge, he would have
pledged other collateral to secure the obligations in question.
Pursuant to the Company's Certificate of Incorporation, as
amended (the "Charter"), the Pledged Shares automatically
converted into shares of Class A Common Stock upon the Pledge by
Mr. Glassman. Consequently, the number of outstanding shares of
Class B Common Stock following the Pledge was reduced by 254,311
shares. Pursuant to the Charter, holders of the Company's Class
B Common Stock are entitled to elect a majority of the Company's
directors so long as there are at least 325,000 shares of Class B
Common Stock issued and outstanding; otherwise, all holders of
Class A and Class B Common Stock, voting as a single class, are
entitled to elect all of the Company's directors. During
November 1995, and pursuant to matters unrelated to the Pledge,
an aggregate of 428,358 other shares of Class B Common Stock were
returned to, and retired by, the Company. As a result thereof,
the number of outstanding shares of Class B Common Stock fell
below the aforementioned 325,000 share threshold. In light of
the Company's being unaware of the Pledge, holders of the
Company's Class A and Class B Common Stock, voting as separate
classes, elected two directors and three directors, respectively,
at the Company's Annual Stockholders' Meeting held in May 1996
(the "1996 Annual Meeting"), rather than voting together as a
single class to elect all of the Company's directors.
Accordingly, since the 1996 Annual Meeting, only the two
directors of the Company elected by the holders of the Class A
Common Stock (the "Class A Directors") have been duly and validly
elected. Prior to June 3, 1997, the Company's By-Laws stated
that the Company shall have three directors. Since their
election by stockholders at the 1996 Annual Meeting, the two
Class A Directors, each of whom was an independent director,
voted in favor of all matters approved by the Board of Directors.
Prior to the authorization of the issuance of the Reissued Class
B Stock to Mr. Glassman, the Class A Directors appointed David
Hillman, Secretary of the Company, as the third director of the
Company.
Since the issuance of the Reissued Class B Stock to Mr.
Glassman caused the number of issued and outstanding shares of
Class B Common Stock to increase to 431,552 shares (above the
325,000 share threshold set forth in the Company's Charter), the
holders of Class B Common Stock became entitled to elect a
majority (consisting of three) of the Company's directors.
Following the issuance to Mr. Glassman of the Reissued Class B
Stock, the directors of the Company amended the Company's By-Laws
to provide that the Board of Directors shall be comprised of five
persons and the holders of the outstanding Class B Common Stock,
acting separately as a class in accordance with the Company's
Charter, elected, by majority written consent in lieu of a
meeting, Daniel Glassman and Iris S. Glassman as directors of the
Company and David Hillman was designated as a director elected by
the holders of the Class B Common Stock.
<PAGE>
At a Special Meeting of Stockholders held in August 1996, it
was reported that an amendment (the "Option Plan Amendment") to
the Company's 1990 Stock Option Plan, as amended (the "Plan"),
had been approved by stockholders increasing, from 1,500,000
shares to 2,600,000 shares, the number of shares of Class A
Common Stock authorized for issuance under the Plan. Given the
ramifications of the Pledge, and in particular, that the 254,311
Class B shares voted in favor of the Option Plan Amendment by Mr.
Glassman were counted as 1,271,555 votes (giving effect to the
5:1 voting power attributable to Class B shares) but should have
been counted as only 254,311 shares of Class A Common Stock
voting in favor of the Option Plan Amendment, there was an
insufficient number of shares of Common Stock of the Company
voting to approve the Option Plan Amendment. Accordingly, the
Board of Directors has determined to treat the Option Plan
Amendment as having been rejected by the Company's stockholders.
Options under the Plan to acquire an aggregate of 140,000 shares
of Class A Common Stock granted by the Company in reliance upon
the Option Plan Amendment having been approved by stockholders
have been returned voluntarily to the Company by the relevant
optionees for cancellation. As a consequence of believing, in
good faith, that the Option Plan Amendment had been approved by
stockholders, between August 15, 1996 and December 31, 1996,
there were outstanding options to acquire under the Plan in
excess of 1,500,000 shares of Class A Common Stock. As a result
of options to acquire an aggregate of 423,354 shares of Class A
Common Stock under the Plan being cancelled during 1996 due to
optionees leaving the employ of the Company, there are
outstanding, as of the date of this report, options to acquire an
aggregate of 1,485,365 of Class A Common Stock under the Plan.
On April 8, 1994, the Company was apprised by the New York
State Department of Environmental Conservation ("NYSDEC") that
Doak's current leased manufacturing facility located on adjoining
parcels at 62 Kinkel Street and 67 Sylvester Street, Westbury,
New York is located in the New Cassel Industrial Area, which has
been designated by the NYSDEC on the Registry of Inactive
Hazardous Waste Sites (the "Registry"). The real property on
which Doak's current manufacturing facility is situated is owned
by and leased to the Company by Dermkraft, Inc., an entity owned
by the former controlling shareholders and officers of Doak.
On February 7, 1995, the Company was apprised by NYSDEC that
the current manufacturing facility will be excluded from the
Registry. By letter dated April 21, 1995, the NYSDEC notified
the Company that it intended to investigate the Company's current
manufacturing facility to determine if hazardous substances had
previously been deposited on that property. By letter dated
October 24, 1995, NYSDEC notified Dermkraft, Inc. that the
Company's current manufacturing facility is included in or near
an inactive hazardous waste site described as "Kinkel and
Sylvester Streets" and that NYSDEC intends to conduct a
Preliminary Site Assessment to study the site and immediate
vicinity. The Company has been advised that NYSDEC has made a
preliminary determination to include the 62 Kinkel Street portion
of the current manufacturing facility on the Registry and that
the 67 Sylvester Street portion of the facility will not be
included, but those determinations could change before they are
finalized. Thereafter, by letter dated May 3, 1996 and addressed
to Dermkraft, Inc., the NYSDEC notified Dermkraft that the site
at 62 Kinkel street has been listed on the Registry due to the
presence of trichloroethylene ("TCE") in soils and groundwater
due to the use of TCE by LAKA Tools and Stamping and LAKA
Industries, a former tenant from 1971 through 1984. The NYSDEC
documents refer to Doak Dermatologics as the current tenant but
do not refer to any activities of Doak Dermatologics or the
Company as a basis for the listing in the Registry. The Company
cannot at this time determine whether the cost associated with
the investigation and required remediation, if any, of the
current manufacturing facility will be material. With respect to
the former manufacturing facility on Magnolia Avenue, which
remains designated by the NYSDEC as part of the Registry,
management believes that Doak will not be obligated to contribute
to any remediation costs, if any are required.
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<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 16, 1997 BRADLEY PHARMACEUTICALS, INC.
By: /s/ Daniel Glassman
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Daniel Glassman, President
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