UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 2 TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
DERMA SCIENCES, INC.
-------------------
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE PER SHARE
---------------------------------------
(Title of Class of Securities)
249827106
---------------------
(CUSIP Number)
Bruce F. Wesson
Senior Managing Member
Claudius, L.L.C.
610 Fifth Avenue, 5th Floor
New York, NY 10020
(212) 218-4990
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
AUGUST 18, 1999
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this Schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934, as amended (the "Act") or
otherwise subject to the liabilities of that section of the Act
but shall be subject to all provisions of the Act (however, see
the Notes).
Page 1 of 9 Pages
<PAGE>
Page 2 of 9 of the initial Schedule 13D pertaining to the
Common Shares of Derma Sciences, Inc., a Pennsylvania corporation,
filed with the Securities and Exchange Commission ("SEC") on
February 6, 1998 for an event of January 23, 1998 and subsequently
amended on September 18, 1998 by Amendment No. 1, is hereby further
amended to read in its entirety as follows:
SCHEDULE 13D
CUSIP NO. 249827106 PAGE 2 OF 9 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,487,923 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
1,487,923
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,487,923
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
50.6%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 249827106 PAGE 3 OF 9 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners International III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
140,555 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
140,555
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
140,555
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 249827106 PAGE 4 OF 9 PAGES
------------- --- ---
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Employee Fund III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
6,361 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
6,361
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,361
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.21%
------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
The first paragraph of Item 1 of the Schedule 13D is hereby
amended to read in its entirety as follows:
"This statement covers a total of 1,683,083 fully
diluted shares of Common Stock, $.01 par value per
share (the "Common Stock"), of Derma Sciences, Inc., a
Pennsylvania corporation (the "Issuer"). The Reporting
Persons (as defined in Item 2 hereof) as of the date
hereof hold an aggregate of (i) 125,000 shares of
Series A Convertible Preferred Stock, $.01 par value
per share, of the Issuer (the "Series A Preferred
Shares"), which as of the date hereof are convertible
into an aggregate of 125,000 shares of Common Stock,
(ii) 416,667 shares of Series B Convertible Preferred
Stock, $.01 par value per share, of the Issuer (the
"Series B Preferred Shares"), which as of the date
hereof are convertible into an aggregate of 416,667
shares of Common Stock, (iii) Convertible Bonds due
August 15, 2000 (the "Convertible Bonds") which are
presently convertible into (x) 300,752 shares of Series
C Convertible Preferred Stock, $0.01 par value per
share (the "Series C Preferred Shares"), which as of
the date hereof would be presently convertible into an
aggregate of 300,752 shares of Common Stock and (y)
300,752 warrants which as of the date hereof would be
presently exercisable for an aggregate of 300,752
shares of Common Stock and (iv) 2,458,334 warrants
(together with the warrants in clause (iii) above the
"Warrants"), which as of the date hereof may be
exercised for an aggregate of 491,667 shares of Common
Stock. The Common Shares, Series A Preferred Shares,
Series B Preferred Shares, Convertible Bonds, Series C
Preferred Shares and Warrants are referred to herein,
collectively, as the "Securities".
The second paragraph of Item 3 of the Initial Schedule 13D
is hereby amended to read in its entirety as follows:
"75,000 of the Series A Preferred Shares and the 75,000
of the Warrants were acquired by the Reporting Persons
through the conversion, effected on or about January
23, 1998, of certain Convertible Debentures due 1998 of
the Issuer ("The Series A Debentures"). The Reporting
Persons acquired Series A Debentures in an aggregate
principal amount of $300,000 for $300,000 in cash. The
remaining 50,000 shares of the Series A Preferred
Shares were acquired through converting 50,000 shares
of Common Stock, which were previously acquired by the
Reporting Persons at a purchase price of $5.00 per
share for an aggregate amount of $250,000 in cash, into
an equal number of shares of Series A Preferred Stock.
The Series B Preferred Shares and 2,083,334 of the
Warrants were acquired by the Reporting Persons through
-5-
<PAGE>
the conversion, effected on or about September 9, 1998,
of certain Convertible Debentures due 1998 of the
Issuer ("The Series B Debentures"). The Reporting
Persons acquired Series B Debentures in an aggregate
principal amount of $2,500,000 for $2,500,000 in cash.
The Reporting Persons acquired the Convertible Bonds in
an aggregate principal amount of $400,000 for $400,000
in cash. Each Reporting Person paid its pro rata share
of the acquisition price of the Securities based upon
the number of Common Shares, Series A Preferred Shares,
Series B Preferred Shares Convertible Bonds and
Warrants it received."
Item 5, subpart (a) of the Initial Schedule 13D is hereby
amended to read in its entirety as follows:
(a) Each Reporting Person owns or has the right to acquire
the number of securities shown opposite its name:
=======================================================================
(1) (2) (3) (4) (5)
Number of
Shares of
Common Stock Number of
into which Shares of
Series A Common
Preferred Stock
Stock, which may
Series B be acquired
Preferred pursuant Percentage of
Series C to Outstanding Shares
Preferred exercise Total of of Common Stock
Reporting Stock is of Columns (2) (see Note
Person Convertible Warrants and (3) below)
--------------------------------------------------------------------
Galen 766,665 721,258 1,487,923 50.6%
--------------------------------------------------------------------
Galen Intl 72,475 68,080 140,555 4.7%
--------------------------------------------------------------------
GEF 3,280 3,081 6,361 0.21%
--------------------------------------------------------------------
Total 842,420 792,419 1,634,839 55.2%
--------------------------------------------------------------------
Note: The percentages shown in each row of column (5)
were calculated, for each respective row, by (i) adding the total
in the bottom row of column (4) to 1,325,938 (the number of
shares of Common Stock outstanding as of June 30, 1999, as set
forth in the Issuer's Quarterly Report on Form 10-QSB for the
quarter then ended after giving effect to the Issuer's 1-for-5
-6-
<PAGE>
reverse stock split which became effective on August 2, 1999)
(the "Total Adjusted Outstanding Shares"), then (ii) dividing the
amount in column (4) by the Total Adjusted Outstanding Shares,
and then (iii) expressing such quotient in terms of a percentage.
-7-
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in the statement
is true, complete and correct.
Date: August 24, 1998 GALEN PARTNERS III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
-------------------------------
Managing Member
GALEN PARTNERS
INTERNATIONAL III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
-------------------------------
Managing Member
GALEN EMPLOYEE FUND III, L.P.
By: Wesson Enterprises, Inc.
By: /s/ Bruce F. Wesson
-------------------------------
President
[Signatures continued on next page.]
-8-
<PAGE>
CLAUDIUS, L.L.C.
By: /s/ Bruce F. Wesson
-------------------------------
Managing Member
WESSON ENTERPRISES, INC.
By: /s/ Bruce F. Wesson
-------------------------------
President
WILLIAM R. GRANT
By: /s/ Bruce F. Wesson
-----------------------------------
Bruce F. Wesson, Attorney-In-Fact
BRUCE F. WESSON
/s/ Bruce F. Wesson
-----------------------------------
L. JOHN WILKERSON
By: /s/ Bruce F. Wesson
----------------------------------
Bruce F. Wesson, Attorney-In-Fact
DAVID JAHNS
By: /s/ Bruce F. Wesson
----------------------------------
Bruce F. Wesson, Attorney-In-Fact
SRINI CONJEEVARAM
By: /s/ Bruce F. Wesson
-----------------------------------
Bruce F. Wesson, Attorney-In-Fact
ZUBEEN SHROFF
By: /s/ Bruce F. Wesson
-----------------------------------
Bruce F. Wesson, Attorney-In-Fact
-9-
