UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 3 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
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
DECEMBER 29, 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(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies with the schedule, including all exhibits. See Rule 13d-7(b) 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
on January 23, 1998 and subsequently amended on September 18, 1998 by Amendment
No. 1 and on August 24, 1999 by Amendment No.2, is hereby further amended to
read in its entirety as follows:
SCHEDULE 13D
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CUSIP NO. 249827106 PAGE 2 OF 9 PAGES
------------- --- ---
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 2,299,985 (see Item 5(a))
-----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,299,985
-----------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,299,985
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
59.7%
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14 TYPE OF REPORTING PERSON
PN
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2
<PAGE>
Page 3 of 9 of the Schedule 13D, as amended, is hereby further
amended to read in its entirety as follows:
SCHEDULE 13D
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CUSIP NO. 249827106 PAGE 3 OF 9 PAGES
------------- --- ---
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners International III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 214,057 (see Item 5(a))
-----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 214,057
-----------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
214,057
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.5%
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14 TYPE OF REPORTING PERSON
PN
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3
<PAGE>
Page 4 of 9 of the Schedule 13D, as amended, is hereby further
amended to read in its entirety as follows:
SCHEDULE 13D
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CUSIP NO. 249827106 PAGE 4 OF 9 PAGES
------------- --- ---
- -------------------------------------------------------------------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Employee Fund III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 9,685 (see Item 5(a))
-----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 9,685
-----------------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,685
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.25%
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14 TYPE OF REPORTING PERSON
PN
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4
<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 2,523,727 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 "August 15 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, (iv) Convertible
Bonds due December 31, 2000 (the "December 31 Convertible
Bonds") which are presently convertible into (x) 444,444
shares of Series D Convertible Preferred Stock, $0.01 par
value per share (the "Series D Preferred Shares"), which as of
the date hereof, would be presently exercisable for an
aggregate of 444,444 shares of Common Stock and (y) 444,444
warrants which as of the date hereof, would be presently
exercisable for an aggregate of 444,444 shares of Common Stock
and (v) 2,458,334 warrants (together with the warrants in
clauses (iii) and (iv) above, the "Warrants"), which as of the
date hereof may be exercised for an aggregate of 491,667
shares of Common Stock. The Common Stock, Series A Preferred
Shares, Series B Preferred Shares, August 15 Convertible
Bonds, Series C Preferred Shares, December 31 Convertible
Bonds, Series D 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:
5
<PAGE>
"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 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 August 15 Convertible Bonds in an
aggregate principal amount of $400,000 for $400,000 in cash.
The Reporting Persons acquired the December 31 Convertible
Bonds in an aggregate principal amount of $450,000 for
$450,000 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, August 15 Convertible Bonds, December 31
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:
6
<PAGE>
(a) Each Reporting Person owns or has the right to acquire the
number of securities shown opposite its name:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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(1) (2) (3) (4) (5)
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Number of Shares
of Common Stock
into which Series
A, Series B, Number of Shares of
Series C and Common Stock which Percentage of
Series D Preferred may be acquired Outstanding Shares
Stock is pursuant to Total of Columns of Common Stock
Reporting Person Convertible exercise of Warrants (2) and (3) (see Note below)
- --------------------------------------------------------------------------------------------------------
Galen 1,172,696 1,127,289 2,299,985 59.7%
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Galen Intl 109,226 104,831 214,057 5.5%
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GEF 4,942 4,743 9,685 0.25%
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Total 1,286,864 1,236,863 2,523,727 65.45%
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</TABLE>
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 September 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
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: January 7, 2000 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
--------------------------
Bruce F. Wesson, Attorney-In-Fact
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
