ENAMELON INC, 424B3, 1997-08-18

ENAMELON INC
424B3, 1997-08-18
MISC HEALTH & ALLIED SERVICES, NEC

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Filed Pursuant to Rule 424(b)(3)

File No.: 333-31163

PROSPECTUS
ENAMELON, INC.

1,200,000 Shares of Common Stock

This Prospectus pertains to up to 1,200,000 shares (the "Shares") of
common stock, $.001 par value per share (the "Common Stock"), of Enamelon, Inc.,
a Delaware corporation (the "Company"), that may be sold by the Selling
Securityholders named herein (the "Selling Securityholders"). See "Selling
Securityholders."

Of the shares of Common Stock offered hereby, 1,080,000 shares were
sold by the Company to accredited investors in June 1997 pursuant to a private
offering (the "June Offering") exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and 120,000 Shares
were sold by Dr. Steven R. Fox, Chief Executive Officer of the Company, to such
accredited investors in the June Offering. The Company will not receive any of
the proceeds from the sale of the Shares by the Selling Securityholders. The
registration of the Shares offered hereby is being effected pursuant to
registration rights granted by the Company to the Selling Securityholders and,
in accordance with the terms of such rights, the Company will bear the expense
of such registration, except that the Selling Securityholders will bear the cost
of all brokerage commissions and discounts incurred in connection with the sale
of their Securities and their respective legal expenses.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Commencing on the effective date of this Prospectus, the Shares may be
sold, from time to time, by the Selling Securityholders directly to purchasers
or, alternatively, may be offered through agents, brokers, dealers or
underwriters, who may receive compensation in the form of concessions or
commissions from the Selling Securityholders or purchasers of the Shares. Sales
of the Shares may be made on the Nasdaq Stock Market National Market System
("NASDAQ"), in privately negotiated transactions or otherwise, and such sales
may be made at the market price prevailing at the time of sale, a price related
to such prevailing market price or a negotiated price.

Any brokers, dealers or agents that participate in the distribution of
the Shares may be deemed to be underwriters, and any commissions received by
them and any profit on the resale of such shares positioned by them may be
deemed to be underwriting discounts and commissions under the Securities Act.

-------------

The Shares offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 6 .

-------------

The date of this Prospectus is August 11, 1997

<PAGE>

No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information and
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, such securities in any circumstances in which such offer or
solicitation is unlawful.

AVAILABLE INFORMATION

The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at Seven
World Trade Center, New York, New York 10048, and at Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661. Copies of such material may be
obtained, at prescribed rates, by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W. Washington, D.C. 20549.

The Company has filed with the Commission a Registration Statement on
Form S-1 under the Securities Act with respect to the securities offered hereby
via the Electronic Data Gathering Analysis and Retrieval System ("EDGAR") and
may be found on the Commission's web site at http://www.sec.gov. This Prospectus
does not contain all the information set forth in the Registration Statement and
the exhibits thereto, as permitted by the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is hereby made to such Registration Statement and the exhibits
thereto or incorporated therein by reference. The Registration Statement,
including such exhibits, may be inspected without charge at the public reference
facilities maintained by the Commission and at the Commission's regional offices
at the addresses stated above. Copies of these documents may be obtained, at
prescribed rates, by writing to the Commission's Public Reference Section at its
office set forth above.

The Company furnishes its stockholders with annual reports which
contain financial statements audited by its independent certified public
accounts and such other interim reports containing unaudited financial
information as it deems appropriate.

The Company will provide without charge to each person who receives
this Prospectus, upon written request a copy of any information that is
incorporated by reference, in the Prospectus (not including exhibits to the
information that is incorporated by reference unless the exhibits are themselves
specifically incorporated by reference). Such requests should be directed to the
following address:

ENAMELON, INC.
758 Route 18 North
Suite 102
New Brunswick, N.J. 08816
Attention: Chief Financial Officer

Enamelon(TM) is a trademark of the Company. Certain other trademarks of
the Company and other companies, including ENAMELINE(TM), Crest(R), Colgate(R),
Aquafresh(R), Mentadent(R), Arm & Hammer Dental Care(R) and Sensodyne(R), are
used in this Prospectus.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the
more detailed information and financial statements and notes thereto appearing
elsewhere in this Prospectus. This Prospectus contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but are not
limited to, those discussed in "Risk Factors." See the "Glossary" beginning on
page 47 of this Prospectus for the definitions of certain terms used herein.

The Company

Enamelon, Inc. is focused on developing and marketing over-the-counter
oral care products based on proprietary formulations and technologies. The
Company's products are intended to stop cavities before they begin. Its
prototype formulations have been demonstrated in animal and in vitro studies to
strengthen tooth enamel. Enamelon(TM) toothpaste contains the active ingredients
sodium fluoride, plus calcium and phosphate ions, to enhance the
remineralization of tooth enamel. The Company has introduced an all-family
toothpaste into test markets, consisting of approximately 5% of United States
households and currently expects to begin a national roll-out of its toothpaste
product in the first half of 1998.

On a daily basis, teeth lose small amounts of calcium and phosphate,
the major structural ingredients of tooth enamel. This "demineralization"
process is caused by plaque acids produced during the bacterial breakdown of
sugars in the mouth. If the demineralization process is not balanced by
remineralization, demineralization will eventually destroy the mineral structure
of the teeth and result in cavities, which must be repaired by a dentist. Saliva
contains low levels of calcium and phosphate ions to naturally combat this
process through "remineralization." The presence of fluoride in the saliva is
known to facilitate the remineralization process. However, remineralization is
limited by the small amounts of calcium and phosphate ions normally present.

Enamelon(TM) toothpaste simultaneously supplies the active ingredient
sodium fluoride, and high concentrations of ions of the inactive ingredients
calcium and phosphate in soluble form during brushing. The Company's in vitro
studies have demonstrated that Enamelon(TM) anticavity fluoride toothpaste
enhances remineralization with a higher level of fluoride uptake and that it
strengthens and hardens the tooth structure. This makes the tooth less soluble
and more resistant to attacks by acids from decay-causing bacteria. The Company
currently is conducting intra oral and small scale clinical studies intended to
establish additional advertising claims, including comparative claims.

Based on the Company's studies to date, it believes that with each
application of Enamelon(TM) toothpaste and its other proposed products, teeth
will become stronger and more resistant to decay. The Company believes that
human clinical studies will show that its toothpaste enhances the tooth
remineralization process to a greater degree than currently available products
and that this will represent one of the most significant advances in personal
dental care since the introduction of mass-marketed fluoride dental products in
the early 1960's.

The worldwide toothpaste market is estimated to exceed $5.0 billion in
annual retail sales. Annual toothpaste sales in the United States are expected
to be $1.75 billion in 1997 and are projected to reach $2.0 billion by the turn
of the century. Over the last five years, the toothpaste market has become
segmented as new, premium-priced products offering benefits such as tartar
control or whitening or containing ingredients such as baking soda have steadily
attracted consumers away from older, mature products.

<PAGE>

gel products) using the ADAHF Patented Technology. The Company's international
license is co-extensive with a non-exclusive international license granted to
SmithKline Beecham Corp. ("Smithkline"), which also obtained from the ADAHF an
exclusive United States license covering products not covered by the Company's
exclusive licenses.

The Company itself has developed both patented and proprietary
technologies relating to the prevention of tooth decay before it begins (the
"Enamelon Proprietary Technology"). It has received five United States patents
for methods and materials that supply soluble calcium and phosphate salts to
teeth to enhance remineralization and one patent for its dual chamber toothpaste
tube, which is used to dispense Enamelon(TM) toothpaste. In addition, the
Company has nine patent applications with respect to certain Enamelon
Proprietary Technology pending in the United States and six patent applications
pending in foreign jurisdictions.

The Company's objective is to become a leading niche marketer of a
variety of oral care, chewing gum, food and confectionery products based on the
ADAHF Patented Technology and/or the Enamelon Proprietary Technology (together,
the "Enamelon Technologies"). The Company's strategic plan for accomplishing
this objective is to (i) market its toothpaste products with sodium fluoride as
the sole active ingredient in compliance with Food and Drug Administration
requirements, (ii) conduct further testing to establish advertising and
marketing claims, including comparative claims (iii) collaborate with corporate
partners in certain product areas and international markets and (iv) capitalize
on additional commercial applications.

The Company was incorporated in Delaware in June 1992. The Company's
executive offices are located at 15 Kimball Avenue, Yonkers, New York, 10704,
and its telephone number is (914) 237-1308.

The Offering

<S> <C>
Shares of Common Stock
Offered.................................................. 1,200,000 shares

Plan of Distribution....................................... The Shares may be offered to the
public from time to time by the
Selling Securityholders directly or
through underwriters, dealers or
agents in market transactions or
through privately negotiated
transactions.

Use of Proceeds............................................ The Company will not receive any
proceeds from the sale of the Shares
by the Selling Securityholders.

Risk Factors............................................... Prospective investors should
carefully consider the matters set
forth under the caption "Risk
Factors". An investment in the shares
of Common Stock offered hereby
involves a high degree of risk and
immediate and substantial dilution.

Nasdaq National
Market System Symbol....................................... "ENML"
</TABLE>

<PAGE>

Summary Financial Data

The following summary financial information has been derived from the
company's financial statements included elsewhere in this Prospectus. The
following summary should be read in conjunction with the Financial Statements
and related notes and management's discussion and analysis included elsewhere in
this Prospectus. See "Financial Statements".

Three Months
Year ended December 31, Ended March 31,
---------------------------------------- ---------------
1994 1995 1996 1997 1996
---- ---- ---- ---- ----
<S> <C>
Selected Statement
of Operations Data:

Total expenses $536,280 $1,080,581 $3,120,249 $2,080,326 $552,207

Other income(charge) $(262,644) $(19,663) $(195,419) $130,956 $35,435

Net Loss $(798,924) $(1,060,918) $(2,924,830) $(1,949,370) $(516,772)

Selected Per Share Data:

Net Loss per share $(.21) $(0.20) $(0.52) $ (0.28) $(0.09)

Weighted average common 3,784,800 5,234,289 5,636,935 6,900,378 5,563,389
shares outstanding
</TABLE>

At March 31, 1997
-----------------
At December
31, 1996 Actual Pro Forma*
----------- ------ ----------
Selected Balance Sheet
Data:
Total Assets $12,391,684 $10,951,107 $23,077,000
Total Liabilities 1,093,271 1,602,064 1,697,664
Working Capital 10,543,096 8,032,528 21,109,451
Stockholders' Equity 11,298,413 9,349,043 22,425,966
- -------------

* As adjusted to reflect net proceeds of $13,076,923 from the June
Offering of 1,080,000 shares of Common Stock.

<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a
high degree of risk and immediate and substantial dilution and should only be
made by persons who can afford a loss of their entire investment. In evaluating
an investment in the Common Stock being offered hereby, investors should
consider carefully, among other matters, the following risk factors, as well as
the other information contained in this Prospectus.

History of Operating Losses; Uncertainty of Future Profitability

The Company has a limited history of operations and has accumulated net
losses from inception in June 1992 through March 31, 1997, of approximately
$7,067,783. Losses have resulted principally from research and development
costs, costs of manufacturing and test marketing of Enamelon(TM) toothpaste, and
general and administrative costs. Although the Company commenced test marketing
of Enamelon(TM) toothpaste in March 1997, costs of production and marketing
presently exceed revenues. The Company expects to continue to incur annual
operating losses at least through 1999, principally as a result of expenses of
ongoing clinical testing and anticipated marketing and manufacturing expenses
associated with the introduction of Enamelon(TM) toothpaste. There can be no
assurance that the Company will ever generate an operating profit or achieve
profitability. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

Dependence on Successful Development and Marketing of Initial Product

The Company is dependent to a large extent on the success of
Enamelon(TM) toothpaste, which is being test marketed at a number of sites.
Based upon laboratory studies by the Company and others, the Company believes
that the current formulation of Enamelon(TM) toothpaste will achieve expected
results in humans. Nevertheless, results of in vitro and animal laboratory
studies are not necessarily indicative of results that will be obtained in human
clinical trials. Adverse or inconclusive clinical trial results concerning any
of the Company's product formulations could significantly delay the marketing of
such products or result in the limitation of the Company's potential product
claims. In such event, the Company may have to conduct further studies. There
can be no assurance that safe and effective commercially viable products can
ever be developed by the Company, or that if they are developed, they can be
produced in a timely manner, can be manufactured economically on a large scale,
can be free from governmental and competitive challenges, and can achieve and
sustain market acceptance.

Uncertainty of Consumer Acceptance of Enamelon Products

The Company will be dependent upon consumer acceptance of Enamelon(TM)
toothpaste as an alternative to current well known brand name toothpastes.
Market acceptance will depend on the Company's ability to demonstrate to
consumers the effectiveness of its products. There can be no assurance that
clinical studies will support the Company's anticipated advertising claims, that
the Company will be able to market its toothpaste successfully or that future
products, if any, will be accepted in the marketplace.

Uncertainties Related to Development of Additional Products

The Company has focused its product development efforts to date on
Enamelon(TM) toothpaste. Accordingly, the Company will require significant
additional efforts to develop other products using the Enamelon Technologies.
All such future product development efforts are subject to certain risks and may
not succeed. These risks include, but are not limited to, the possibility that
(i) new products will be found ineffective or unsafe, (ii) even if safe and
effective, they will be difficult to develop into commercially viable products
or to manufacture economically on a large scale, free of governmental or
competitive challenges and (iii) any such products will fail to achieve and
sustain market acceptance. Therefore, there is substantial risk that the
Company's product development efforts will not be successful.

<PAGE>

Competition

Competition in toothpaste products, as well as in chewing gum, food and
confectionery products, is intense. The Company's primary competitors include
companies with substantially greater financial, technological, marketing,
personnel and research and development resources than those of the Company.
There can be no assurance that the Company will be able to compete successfully
in these markets. The Company's toothpaste products will compete with other
brand name toothpastes, including Crest, Colgate, Aquafresh, Mentadent, Arm &
Hammer Dental Care and Sensodyne. Further, new products or future developments
by others may provide therapeutic or cost advantages over the Company's proposed
products. There can be no assurance that developments by others of similar or
more effective products will not render the Company's products or technologies
noncompetitive or obsolete or that competitors will not challenge the validity
of the Company's patent rights. Since the Company's proposed products will be
new to the market and sold in competition with the products of companies with
greater financial and other resources, there can be no assurance that a market
for the Company's proposed products will develop.

The Company's non-exclusive license to market products not covered by
its exclusive licenses (including oral sprays, mouth rinses, and professional
gels) outside of the United States is co-extensive with a license granted to
SmithKline, which has financial and other resources that are substantially
greater than those of the Company. Therefore, it is likely that the Company will
not be able to compete with SmithKline for the sale of those products outside of
the United States unless the Company enters into strategic alliances with other
companies having financial and other resources comparable to those of
SmithKline. However, there can be no assurance that the Company will be able to
successfully market products covered by its non-exclusive license, even if it is
able to form such alliances.

Compliance with the FDA Monograph

The Company's products are subject to regulation by the Food and Drug
Administration (the "FDA"). The FDA has published a final monograph, Anticaries
Drug Products for Over-the-Counter Human Use (the "Monograph"), for
over-the-counter anticaries drug products, the category of non-prescription drug
products that includes the Company's proposed oral care products. The Monograph
establishes conditions under which over-the-counter drug products that aid in
the prevention of tooth decay generally are recognized as being safe and
effective and not misbranded. The Company's products may be lawfully marketed
without being required to file a New Drug Application (an "NDA") with the FDA if
they use as their sole active ingredient one of the active ingredients permitted
in the Monograph and only make labeling claims permitted in the Monograph. The
Company's proposed products have been and are being developed with the sole
active ingredient being sodium fluoride, an active ingredient permitted under
the Monograph, and the Company intends to comply with the Monograph in all other
respects. However, there can be no assurance that the FDA will determine that
the Company's proposed products meet all of the conditions of the Monograph. The
Company will be limited in the claims it can make with respect to its products
in order to remain in compliance with the Monograph. The Company's inability to
market its proposed toothpaste products under the Monograph would have a
material adverse effect on the Company.

In order to market its proposed products other than in compliance with
the Monograph, the Company would be required to file an NDA. An NDA would
require substantial testing procedures which are costly and time consuming.
Accordingly, the Company's ability to sell its proposed products in the United
States could be delayed for an indefinite period of time. Further, the Company
may not have sufficient financial or other resources available to complete the
NDA process and assuming such financial and other resources are available, there
is no assurance that the FDA would approve the Company's NDA, if one were
necessary.

Substantiation of Additional Advertising Claims

The Company intends to continue to conduct human clinical studies of
Enamelon(TM) toothpaste, which are intended to confirm efficacy in humans and
begin to establish additional advertising claims. The Company believes that
these advertising claims will distinguish Enamelon(TM) toothpaste from
competitors' products and give the Company a competitive advantage. However,
there can be no assurance that the results of the human clinical studies will

<PAGE>

substantiate the anticipated advertising claims. In that event, the Company may
be required to conduct additional human clinical studies, delay the national
roll-out of Enamelon toothpaste, or change its marketing strategy.

Compliance with Other Government Regulation

In addition to regulation by the FDA under the Monograph, the Company
is subject to additional FDA regulation as well as regulation under various
other federal and state laws and agencies. Each domestic drug product
manufacturing facility must be registered with the FDA, and each manufacturer
must inform the FDA of every drug product it has in commercial distribution and
keep such list updated. Domestic manufacturing facilities are also subject to at
least biennial inspection by the FDA for compliance with Good Manufacturing
Practice ("GMP") regulations promulgated by the FDA. Compliance with GMP
regulations is required at all times during the manufacture and processing of
drug products. Accordingly, to the extent that the Company uses contract
manufacturers, such manufacturers must be in compliance with FDA requirements.
If any such manufacturer is not in compliance with GMP, the FDA could bring an
action to enforce its regulations, which could lead to closing such
manufacturing facility. In that instance, the Company would be required to
contract with another manufacturer, any such contract could possibly be on terms
less favorable to the Company than its former agreement, and the sales and
marketing of the Company's products could be disrupted. See "Business -
Manufacturing," "-Government Regulation," and "Risk Factors--Dependence on
Others to Manufacture".

Both the Company's products and its product claims may be challenged by
the Company's competitors or by the Federal Trade Commission (the "FTC") or
other governmental or private agencies. Such challenges may include an assertion
that the data obtained by the Company to substantiate the Company's advertising
claims may be inadequate or that such claims are inaccurate. There can be no
assurance that the Company will successfully defend any challenge in this area
or be able to modify its products or the claims with respect thereto to such an
extent that the products remain commercially viable. If the Company is unable to
defend such claims, it may become subject to an FTC cease and desist order,
which could impair its ability to market its products.

The laws and regulations administered by governmental agencies are
subject to change and varying interpretations. While the Company intends to use
its best efforts to comply with relevant laws and regulations, no assurance can
be given that an agency might not assert a claim of noncompliance against the
Company in the future. Unanticipated changes in laws or adverse interpretations
of regulations could materially jeopardize the Company's ability to distribute
its products or engage in its contemplated business activities.

The marketing of the Company's proposed products abroad will be subject
to significant regulation by foreign cosmetic and/or drug regulatory agencies.
No assurance can be given that the Company will be granted approval to market
its proposed products in foreign countries, and the failure to obtain such
required approvals would have a adverse effect on the Company's ability to
market its products internationally. See "Business -- Regulation."

Dependence on Licensing Agreements

Since the Company considers the ADAHF Patented Technology to be a key
element in its product development, the Company's license agreements with the
American Dental Association Health Foundation (the "ADAHF") are material to the
Company's business. If sales of the company's products do not generate royalties
of at least $17,000 during the last year of any exclusivity period under the
Company's exclusive licenses, then the Company will not be entitled to renew the
period of exclusivity, and the ADAHF will be entitled to license the ADAHF
Patented Technology to the Company's competitors. Furthermore, if the Company
fails to pay the minimum royalties required under the license agreements or
otherwise breaches such agreements, then the ADAHF will be entitled to terminate
the agreements. In that event, the Company would be unable to use the ADAHF
Patented Technology, which could have a material adverse effect on the ability
of the Company to develop, manufacture and sell its products, or even to
continue in business. See "Business -- ADAHF Patents and Licenses" and "--
Patents, Trademarks and Other Proprietary Information."

<PAGE>

Uncertain Ability to Protect Patents and Other Intellectual Property

The Company's ability to compete effectively depends on its success in
protecting the Enamelon Technologies, both in the United States and abroad. No
assurance can be given that the Company's protection of patents or other
proprietary technology within and/or outside of the United States is sufficient
to deter others, legally or otherwise, from developing or marketing competitive
products using the Enamelon Technologies.

The United States and foreign patents and pending patent applications
covering the ADAHF Patented Technology (the "ADAHF Patent Rights") and certain
of the Enamelon Proprietary Technology (the "Enamelon Patent Rights" and
collectively with the ADAHF Patent rights, the "Patent Rights") are material to
the Company's business. No assurance can be given that any further patents will
be issued from the United States or foreign patent offices for the Patent Rights
or that the Company will receive any patents in the future based on its
continued development efforts. The Company believes that the protection afforded
by the Patent Rights is material to its future revenues and earnings. There can
be no assurance that any of the Patent Rights will be found to be valid or that
any of the Patent Rights will be enforceable or prevent others from developing
and marketing competitive products or methods. A successful challenge to the
validity of the Patent Rights would have a material adverse effect on the
Company and could jeopardize its ability to engage in its contemplated business.
An infringement action on behalf of the Company may require the diversion of
substantial funds from the Company's operations and may require management to
expend efforts that might otherwise be devoted to the Company's operations.
Furthermore, there can be no assurance that the Company will be successful in
enforcing the Patent Rights. See "Risk Factors--Competition."

There can be no assurance that patent infringement claims in the United
States or in other countries will not be asserted against the Company by a
competitor or others, and if asserted, that the Company will be successful in
defending against such claims. In the event one of the Company's proposed
products is adjudged to infringe patents of others with the likely consequence
of a damage award, the Company or any sublicensee may be enjoined from using and
selling such product or be required to obtain a royalty-bearing license, if
available on acceptable terms. Alternatively, in the event a license is not
offered, the Company might be required to redesign those aspects of the product
held to infringe so as to avoid future infringement. In such case, any redesign
efforts undertaken by the Company could require significant expense, necessitate
an FDA review, delay the introduction or the re-introduction of the Company's
products into certain markets, or be so significant as to be impractical. See
"Business -- ADAHF Patents and Licenses" and "-- Patents, Trademarks and Other
Proprietary Information."

Protection of Proprietary Technology and Information

The Company also intends to rely on trade secrets, know-how and
continuing technological advancement to establish and maintain a competitive
position in the market for its products. Although the Company has entered into
confidentiality and invention agreements with its employees and consultants, no
assurance can be given that such agreements will be honored or that the Company
will be able to effectively protect its rights to its unpatented trade secrets
and know-how. Moreover, no assurance can be given that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to the Company's trade secrets and know-how.
See "Business--Patents, Trademarks and Other Proprietary Information."

Evolving Product Formulations

The Company expects that the formulation of its toothpaste and other
products will be modified from time to time as a result of the Company's ongoing
research and product testing programs. As a result of such modifications,
products that the Company produces in the future may differ from those that were
the subject of earlier research and testing. Therefore, the research studies
conducted to date and relied upon by the Company for efficacy and claims
substantiation, as well as the Patent Rights obtained at this time, might not
necessarily be applicable to the Company's future product formulations. In that
event, the Company may be required to make significant additional expenditures
on development and testing of these new formulations. Furthermore, there can be
no assurance that future product formulations will comply with the Monograph,
that the Company will not be required to file an NDA, or that any products using
such formulations will be commercially viable. See "Business -- Research and
Development" and " -- ADAHF Patents and Licenses."

<PAGE>

Limited Marketing Capability

The Company has limited marketing capabilities and resources. Achieving
market penetration will require significant efforts by the Company to create
awareness of, and demand for, its proposed products. Accordingly, the Company's
ability to build its customer base will be dependent on its marketing efforts,
including its ability to establish an effective internal sales organization or
establish strategic marketing arrangements with other companies. The Company's
failure to successfully develop its marketing capabilities, both internally and
through wholesalers and brokers, would have a material adverse effect on the
Company's business. Further, there can be no assurance that the development of
such marketing capabilities will lead to sales of the Company's proposed
products. The Company will be limited in the claims it can make with respect to
its products in order to remain in compliance with the Monograph. See "Business
- -- Marketing" and "Risk Factors -- Compliance with the Monograph."

Dependence on Others to Manufacture

The Company currently has limited manufacturing capability, and
therefore, it is using a contract manufacturer to manufacture its toothpaste
products for the United States market. There can be no assurance that if the
Company's present contract manufacturer becomes unavailable, the Company will be
able to retain another qualified manufacturer on terms favorable to the Company.
For the balance of the worldwide toothpaste markets, as well as for the
Company's other proposed products, the Company may seek to sublicense or enter
into joint ventures or strategic partnerships with major consumer product
companies or other entities on either an exclusive or non-exclusive basis.
Manufacturing arrangements in these markets are likely to be encompassed in any
agreements establishing such relationships and may place primary manufacturing
responsibility on others. The Company has no plan, agreement, understanding or
arrangement with respect to such relationships, and no assurance can be given
that any will be entered into.

The Company's dependence upon others to manufacture its products may
adversely affect its future profit margins, if any, and may affect the Company's
ability to sell its proposed products on a timely and competitive basis. See
"Risk Factors--Compliance with Other Government Regulation" and "Business--
Manufacturing".

Future Capital Needs; Uncertainty of Additional Financing

The Company's cash requirements may vary materially from those now
planned depending on numerous factors, including the status of the Company's
marketing efforts, the Company's business development activities, the results of
clinical trials, the regulatory process and competition. The Company currently
estimates that its cash on hand, including the net proceeds from the June
Offering, will be sufficient to finance its working capital and other
requirements for a period of approximately 15 months. Thereafter, or sooner if
conditions make it necessary, the Company will need to raise additional funds
through public or private financings, including equity financings which may be
dilutive to stockholders. There can be no assurance that the Company will be
able to raise additional funds if its capital resources are exhausted, or that
funds will be available on terms attractive to the Company or at all. If
adequate funds are not available, the Company may be required to delay, reduce
the scope of, or eliminate the national rollout of Enamelon(TM) toothpaste and
otherwise reduce materially its proposed operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Product Liability

The sale of any over-the-counter consumer product may result in claims
of adverse reactions by users. Although the Company has no intention of
marketing any product without reasonable belief in its safety and efficacy when
used in accordance with its instructions, misuse of the Company's products may
result in consumer injury. In addition, future developments, including possible
adverse medical studies and associated negative publicity, could have a material
adverse impact on the market for the Company's products and on its results of
operations. Further, the Company may be subject to certain consumer claims and
informal complaints relating to its products that are incidental and routine to
its business and for which the Company intends to maintain insurance coverage.

<PAGE>

The Company currently maintains product liability insurance of $6
million per claim and $7 million in the aggregate on a "per occurrence" basis.
Product liability insurance coverage is expensive and subject to many
exclusions, and there can be no assurance that the Company will be able to
maintain its current insurance coverage or to obtain additional insurance
coverage in sufficient amounts or on favorable terms. Exclusions or damage
limitations may render any insurance coverage obtained insufficient to protect
the Company adequately from the successful assertion of a product liability
claim. There can be no assurance that the Company's present or future insurance
coverage will be sufficient to satisfy product liability claims, if any, made
against the Company with respect to injuries arising from the use of such
products. In the event of a successful product liability claim against the
Company, the insufficiency of insurance coverage and the negative publicity from
such a suit could have a material adverse effect on the Company and jeopardize
its ability to engage in its contemplated business activities. There also can be
no assurance that the Company will be able to increase such insurance coverage
or to maintain such coverage on acceptable terms. If the Company's insurance
coverage were to lapse or be terminated, then the Company would have no
insurance coverage for claims arising subsequent to the lapse or termination of
the policy. Product liability claims successfully asserted after the lapse or
termination of the policy could have a materially adverse effect on the Company.
See "Business -- Liability Insurance."

Dependence on Key Personnel

The success of the Company will be largely dependent upon the personal
efforts of Dr. Steven R. Fox, D. Brooks Cole, Norman Usen and Anthony E.
Winston. The loss of the services of any of such persons could have a material
adverse effect on the Company's business and prospects. The Company has entered
into a five-year employment agreement with Dr. Fox as Chairman of the Board and
Chief Executive Officer. Notwithstanding, Dr. Fox currently continues to
practice dentistry on a part-time basis. The Company has also entered into an
employment agreement with Mr. Cole as President and Chief Operating Officer
pursuant to which Mr. Cole serves at the pleasure of the Board of Directors.
Although the Company has entered into employment agreements with each of the
aforementioned individuals, there can be no assurance that the Company will be
able to retain their services. The success of the Company will also be dependent
upon its ability to hire and retain additional qualified management, marketing
and financial personnel. The Company will compete with other companies with
greater financial and other resources for such personnel. See "Management --
Employment and Consulting Agreements."

Control by Principal Stockholders

The Company's directors, executive officers and principal stockholders
beneficially own approximately 51.9% of the Company's Common Stock.
Consequently, they will have the ability to affect the election of the Company's
directors and the outcome of all other issues submitted to the Company's
stockholders, and they will continue to control direction of the day-to-day
affairs of the Company. See "Principal Stockholders."

No Assurance of Active or Continued Public Market

Although a public trading market for the Common Stock currently exists,
there can be no assurance that such trading market will provide significant
liquidity with regard to the Common Stock or that such market will be sustained.

<PAGE>

Possible Volatility of Stock Price

Trading volume and prices for the Common Stock have been and could
continue to be subject to wide fluctuations in response to quarterly variations
in operations, financial results, announcements with respect to sales and
earnings, technological innovations, new product developments, the sale or
attempted sale of a large amount of securities in the public market, and other
events or factors that cannot be foreseen or predicted by the Company. In
addition, various factors affecting consumer products companies, as well as
price and volume volatility affecting small and emerging growth companies
generally, but not necessarily related to their particular operating
performance, may have a significant impact on the market price of the Common
Stock.

Shares Eligible for Future Sale

Future sales of Common Stock by existing stockholders pursuant to Rule
144 ("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to registration rights granted to certain holders of
warrants to purchase the Company's Common Stock, or pursuant to other
registrations or exemptions from registration under the Securities Act, could
have an adverse effect on the price of the shares of Common Stock. As of August
1, 1997, the Company had approximately 8,142,749 shares of Common Stock
outstanding. In addition, the Company has reserved for issuance (i) 1,344,480
shares of Common Stock upon exercise of options granted under the Company's 1993
Incentive Stock Option Plan (the "1993 Plan"), (ii) 121,478 shares upon exercise
of options to be granted under the 1993 Plan, (iii) 750,000 shares upon the
exercise of options to be granted under the Company's 1997 Incentive Stock
Option Plan, and (iv) 830,110 shares upon exercise of outstanding warrants.

Of the 8,142,749 shares of Common Stock issued and outstanding,
1,700,000 were sold publicly in the Company's initial public offering,
approximately 338,684 shares have been sold publicly pursuant to Rule 144, and
1,200,000 shares may be sold publicly pursuant to the registration statement of
which this Prospectus is a part. The remaining 6,104,065 outstanding shares of
Common Stock are "restricted securities," as that term is defined in Rule 144,
and may only be sold pursuant to a registration statement under the Securities
Act or an applicable exemption from registration thereunder, including
exemptions provided by Rule 144. All of such shares are presently eligible for
resale under Rule 144. In addition, holders of 558,399 shares of Common Stock
and warrants to purchase 631,250 shares of Common Stock at prices ranging from
$3.60 to $5.75 per share have three demand registration rights exercisable until
October 24, 2001, and unlimited piggyback registration rights exercisable until
January 23, 2003 (subject to certain limitations), and holders of warrants to
purchase 170,000 shares of Common Stock at $8.40 per share have one demand
registration right exercisable after October 23, 1997, and unlimited piggyback
registration rights exercisable until October 29, 2001. Employees, consultants,
and other eligible holders of options to purchase approximately 1,198,431 shares
of Common Stock granted under the Company's 1993 Plan prior to the Company's
initial public offering also have the right to exercise their options and
immediately sell the shares of Common Stock received upon exercise under Rule
144. No prediction can be made as to the effect that future sales of Common
Stock, or the availability of shares of Common Stock for future sales, will have
on the market prices for the Common Stock prevailing from time to time. Sales of
substantial amounts of Common Stock, or the perception that such sales could
occur, could adversely affect prevailing market prices for the Common Stock, or
the perception that such sales could occur, could adversely affect prevailing
market prices for the Common Stock and could impair the Company's ability to
raise capital through the future sale of its equity securities. See "Principal
Stockholders" and "Shares Eligible for Future Sale."

Issuance of Preferred Stock; Antitakeover Provisions of Delaware Law

The Company's Amended Certificate of Incorporation authorizes the
issuance of 5,000,000 shares of Preferred Stock with such designations, rights
and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without obtaining
stockholder approval, to issue Preferred Stock with dividend, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the holders of the Common Stock. In the event of issuance,
the Preferred Stock could be used, under certain circumstances, as a method of
discouraging, delaying or preventing a change in the control of the Company.
Certain provisions of Delaware law may also discourage third party attempts to
acquire control of the Company. See "Description of Securities."

<PAGE>

USE OF PROCEEDS

The Shares are being offered for sale solely by the Selling
Stockholders pursuant to certain registration rights granted to them by the
Company in the Private Offering. Accordingly, the Company will not receive any
proceeds from the sale of the Shares.

DIVIDEND POLICY

The Company has not paid any dividends on its Common Stock since its
inception and for the foreseeable future intends to follow a policy of retaining
all of its earnings, if any, to finance the development and continued expansion
of its business. There can be no assurance that dividends will ever be paid by
the Company. Any future determination as to payment of dividends will depend
upon the Company's financial condition, results of operations and such other
factors as the Board of Directors deems relevant.

CAPITALIZATION

The following table sets forth the capitalization of the Company at
March 31, 1997, and as adjusted to give effect to the issuance of 1,080,000
shares of Common Stock sold in a private placement on June 26, 1997. This table
should be read in conjunction with the Financial Statements and the related
Notes thereto included elsewhere in this Prospectus.

March 31, 1997
--------------
Actual
(unaudited) Pro Forma*
<S> <C>
Stockholders' equity
Common stock............................................................ 6,900 $7,980
Additional paid-in capital.............................................. 16,409,926 29,485,769
Accumulated deficit during the development stage........................ ( 7,067,783) (7,067,783)
Total stockholders' equity.......................................... 9,349,043 22,425,966
----------- -----------

Total stockholders' equity................................................... $10,951,107 $24,123,630
=========== ===========
</TABLE>
- ------------
* As adjusted to reflect the sale of 1,080,000 shares of Common Stock in
the June Offering

MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS

Market Data

Since October 24, 1996, the Company's Common Stock has traded on the Nasdaq
Stock Market National Market System under the symbol "ENML".

Set forth below is the trading range of the high and low prices for the
Common Stock since it began trading, as reported on the Nasdaq Stock Market
National Market System.

<PAGE>

Fiscal 1996
Quarter Ended High Low
- ------------- ---- ---
December 31, 1996 $7 1/4 $5 3/8

Fiscal 1997
Quarter Ended High Low
- ------------- ---- ---
March 31, 1997 $25 1/4 $6
June 30, 1997 $27 1/2 $13

Nasdaq Trading

As of the date of this Prospectus the Company complied with all of the
requirements of the National Association of Securities Dealers, Inc. ("NASD")
for continued listing of the Common Stock in the Nasdaq Stock Market National
Market System.

Holders

The approximate number of holders of record of the Common Stock, as of the
date of this Prospectus is 314 record holders of Common Stock. For information
with respect to the Company's Common Stock, see Note 4 of the Notes to Financial
Statements in this report.

SELECTED FINANCIAL DATA
(In thousands, except per share data)

Set forth below is selected financial data with respect to the statements
of operations of the Company for the period from June 1992 (Inception) to
December 31, 1992, and for the twelve months ended December 31, 1993, 1994, 1995
and 1996, the three months ended March 31, 1996 and 1997 and the balance sheets
of the Company at December 31, 1992, 1993, 1994, 1995, 1996, and March 31, 1996
and 1997. Year-end data was derived from the Company's Financial statements
audited by BDO Seidman, LLP, independent certified public accountants, certain
of which are included elsewhere in the Prospectus. The data should be read in
conjunction with the Financial Statements (including the Notes thereto) and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Prospectus.

June 9, 1992
(Inception) Three Months Ended
to December, 31, Year Ended December 31, March 31,
----------------------- ---------
1992 1993 1994 1995 1996 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C>
Selected Statements of
Operations Data:
Total Expenses $37 $311 $536 $1,081 $3,120 $2,080 $552
Other income (charge) -- 14 (263) 20 (195) 130 35
---- ---- ----- ------- ------ ------ -----
Net Loss -- $(297) $(799) $(1,061) $(2,925) $(1,949) $(517)

Selected Per Share Data:
Net loss per share * * * $(0.20)** $(0.52) $(0.28) $(0.09)
Weighted average shares * * * 5,234 ** 5,637 6,900 5,563
outstanding
</TABLE>

At December 31, At March 31,
----------------------------------------------- ------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C>
Selected Balance Sheet Data:
Working Capital (deficit) $55 $474 $(58) $1,628 $10,543 $7,763
Total assets $112 $795 $265 $2,041 $12,392 $10,951
Stockholders' equity $108 $744 $151 $1,867 $11,298 $9,349
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
Prospectus. Except for the historical information contained herein, the
following discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
projected in the forward-looking statements discussed herein. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed in this section, as well as in the sections entitled "Risk Factors"
and "Business."

Results of Operations

Three Months ended March 31, 1997 Compared to Three Months ended March
31, 1996

Total expenses were approximately $2,080,000 for the three months ended
March 31, 1997, compared with total expenses of approximately $552,000 for the
same period in the prior year, an increase of $1,528,000. This increase was
primarily the result of higher marketing and selling expenses of $849,000,
higher research and development expenses of $273,000, higher administrative and
other expenses of $406,000.

Marketing and selling expenses increased from $4,000 to $853,000 as a
result of the efforts to support the launch of the Company's toothpaste product
into test market. The Company began to ship into test market on March 26, 1997.
For financial reporting purposes the Company is still being treated as being in
the development stage. Revenue of approximately $15,000 from the sales of
toothpaste has been treated as a reduction in marketing expenses.

Research and development expenses increased from $473,000 to $746,000
primarily as a result of studies performed at universities and research
facilities and development activities necessary to bring the toothpaste into
test market.

Administrative and other expenses increased from $75,000 to $481,000
primarily attributable to increased payroll and benefits, consulting and other
administrative office expenses which resulted from the Company's expanded
operations.

These increases were offset in part by $96,000 of additional interest
and dividend income.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Total operating expenses were approximately $3,120,000 for the year
ended December 31, 1996, compared with total expenses of $1,081,000 in the prior
year, an increase of $2,039,000. This increase was primarily the result of
higher marketing and selling expenses of $362,000, higher research and testing
expenses of $1,215,000 and higher administrative and other expenses of $462,000.
Additionally, the Company anticipates that total expenses will increase over the
next few years as the Company increases its product development, manufacturing
and marketing activities. Such increased business activities will require
additional personnel and payments to third parties.

The increase of $362,000 in marketing and selling expenses resulted
from marketing creative fees necessary to bring the Company's product to test
market.

<PAGE>

The increase in research and testing expenses from $547,000 to
$1,762,000 resulted from the expansion of the Company's research and development
program at its laboratory facility and clinical testing at various independent
oral care research facilities in the United States.

The increase in administrative and other expenses from $534,000 to
$996,000 is primarily attributable to increased consulting and administrative
office expenses, associated with the hiring of additional personnel.

These increases were offset in part by $195,000 of interest and
dividend income earned from $10,425,000 of net proceeds from the Company's
initial public offering in October 1996.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Total expenses were approximately $1,081,00 in 1995, compared with
total expenses of $536,000 in 1994, an increase of $545,000, or 101.7%. The
increase was primarily attributable to a $234,000 increase in payroll and
benefits expenses as well as a $128,000 increase in research and testing
expenses and a $183,000 increase in administrative expenses.

The increase in payroll and benefits expenses of 174.6%, from $134,000
to $368,000, was attributable to increased compensation for the Company's Chief
Executive Officer, Vice-President of Product Development/Operations and Vice-
President of Technology and clinical Research.

The increase in research and testing expenses of 87.1%, from $147,000
to $275,000, was the result of the expansion of the Company's research and
development program at its laboratory facility, additional laboratory supplies,
expansion of the in vitro studies and the initiation of in vivo studies at the
University of Connecticut.

During 1995, ten in vitro studies, comparing approximately 120
potential formulations, were performed at Indiana University. Based on the data
and the results of in-house laboratory studies, the Company successfully
transitioned the science from a concept to practical technology, which can be
incorporated into toothpaste. Results from animal studies at the University of
Connecticut provided the Company with the initial indication that the technology
successfully enhanced remineralization.

The increase in administrative and other expenses of 71.8%, from
$255,000 to $438,000, was primarily attributable to increased legal and
accounting fees incurred in connection with the Company's efforts to secure
additional investment capital and the preparation of interim financial
statements.

The net loss in 1994 was increased by approximately $270,000 as a
result of the Company expensing deferred offering costs related to a proposed
private placement transaction that was not consummated. See "Financial
Statements."

Liquidity and Capital Resources

Since its inception in June 1992, the Company has financed its
operations primarily through private placements of Series A Preferred Stock and
Common Stock and a public offering of Common Stock totaling approximately $29.2
million, net of expenses. At March 31, 1997, the Company had cash and cash
equivalents of approximately $9.3 million and working capital of $8.0 million.
The Company has no outstanding debt (other than accounts payable and accrued
expenses) or available lines of credit.

Since its inception and through March 31, 1997, the Company has
incurred losses aggregating approximately $7.1 million and had available net
operating loss carryforwards as of December 31, 1996 of approximately $5.1
million. The net operating loss carryforwards will expire if not used by the
period from 2007 through 2011 and may be limited by United States federal tax
law as a result of future changes in ownership. The Company expects to continue
to incur operating losses at least through 1999 while it continues clinical
testing and initial toothpaste marketing efforts. In March 1997, the Company
began to test market Enamelon(TM) all family toothpaste in selected United
States markets. Assuming the successful completion of test marketing, the
Company intends to begin a national roll-out of this product in the first
quarter of 1998.

<PAGE>

Since its inception and through March 31, 1997, the Company has paid
$1,044,000 for the purchase of equipment and approximately $321,000 for costs
associated with obtaining patents, trademarks and licenses rights. The Company
intends to use approximately $500,000 of its cash to purchase additional
manufacturing equipment for the production of the Company's patented, split
system toothpaste tube and for high-speed filling equipment, and for computer
equipment and software to support operations.

In June 1997, the Company sold 1,080,000 shares of its common stock in
a private placement to accredited investors at $13 per share for an aggregate
consideration of $14,040,000.

The Company's cash requirements may vary materially from those now
planned depending on numerous factors, including the status of the Company's
marketing efforts, the Company's business development activities, the
availability of alternative financing for the acquisition of manufacturing
equipment, the results of clinical trials, the regulatory process and
competition. The Company currently estimates that cash on hand, together with
its projected cash flow from operations, if any, will be sufficient to finance
its working capital and other requirements for a period of approximately 15
months which includes the test marketing period. Thereafter, or sooner if
conditions necessitate, the Company may need to raise additional funds through
public or private financings. If adequate funds are not available, then the
Company may be required to delay, reduce the scope of, or eliminate the
commercial introduction of its toothpaste product and otherwise reduce the
proposed operations.

The foregoing discussion should be read in conjunction with the
Financial Statements and Notes thereto appearing elsewhere in this Prospectus
and in the Company's Form 10-KSB for the year ended December 31, 1996. Except
for the historical information contained herein, the foregoing discussion
contains forward- looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those projected in the
forward-looking statements discussed herein. Factors that could cause actual
results to differ materially include, but are not limited to those discussed
under Risk Factors and Business. Those and other risks are described in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.

Recently issued accounting standards may affect the Company's Financial
Statements in the future. See Note 4 in the Notes to the Financial Statements
for the three months ended March 31, 1997 in the Financial Statements section of
this Prospectus.

<PAGE>

BUSINESS

Overview

Enamelon, Inc. (the "Company") is focused on developing and marketing
over-the-counter oral care products based on proprietary formulations and
technologies. The Company's products are intended to stop cavities before they
begin. Its prototype formulations have been demonstrated in animal and in vitro
studies conducted to strengthen tooth enamel. Enamelon(TM) toothpaste contains
the active ingredients sodium fluoride, plus calcium and phosphate ions, to
enhance the remineralization of tooth enamel. The Company has introduced an
all-family toothpaste into test markets, consisting of approximately 5% of
United States households and currently expects to begin a national roll-out of
its toothpaste product in the first half of 1998.

The Company holds licenses from the American Dental Association Health
Foundation (the "ADAHF") to use patented technologies (the "ADAHF Patented
Technology") relating to a method for oral use of various amorphous calcium
phosphate compounds that enhance the natural activity of fluoride to prevent
tooth decay. The ADAHF has granted the Company (i) exclusive worldwide licenses
to develop, manufacture and market toothpaste, chewing gum, food and
confectionery products using the ADAHF Patented Technology and (ii) a
non-exclusive international license covering products not covered by the
Company's exclusive licenses (including oral spray, mouth rinse and professional
gel products) using the ADAHF Patented Technology. The Company's international
license is co-extensive with a non-exclusive international license granted to
SmithKline Beecham Corp. ("SmithKline"), which also obtained from the ADAHF an
exclusive United States license covering products not covered by the Company's
exclusive licenses. The Company will be required to pay the ADAHF royalties
under these license agreements. Provided that the Company satisfies minimum
royalty and certain sales requirements, the licenses and any exclusivity
thereunder will continue with respect to each such patent until its expiration.

The Company itself has also developed patented and other proprietary
technologies relating to enhancing remineralization of tooth enamel (the
"Enamelon Proprietary Technology"). It has been granted five United States
patents for methods and materials that supply soluble calcium and phosphate
salts to teeth to enhance remineralization, and one patent for its dual chamber
toothpaste tube, which is used to dispense Enamelon(TM) toothpaste. In addition,
the Company has nine patent applications with respect to certain Enamelon
Proprietary Technology pending in the United States and six patent applications
pending in foreign jurisdictions.

The significant events in the Company's progress to date include the
following:

o In 1992, the Company was organized and received from the ADAHF
exclusive worldwide licenses for toothpaste, chewing gum, food
and confectionery products, and a non-exclusive international
license for products not covered by the exclusive licenses.

o In January 1995, the Company conducted successful in vitro
testing of a prototype formulation using the Enamelon
Technologies at the Oral Health Research Institute of Indiana
University.

o In October 1995, and January 1996, the Company conducted
successful animal studies of a prototype formulation using the
Enamelon Technologies at the School of Dentistry of the
University of Connecticut.

o In June 1996, the Company commenced preliminary intra oral and
clinical studies of its toothpaste intended to establish
additional advertising claims, for advertising to consumers
and dentists.

<PAGE>

o In October 1996, the Company completed its initial public
offering of 1,700,000 shares of common stock at $7.00 per
share receiving net cash proceeds of approximately $10.4
million. Concurrent with the public offering, 558,399 shares
of Series A Preferred Stock were automatically converted into
the same number of shares of common stock.

o In November 1996, the Company was granted its first patent and
in February, March and May 1997 was granted five additional
patents, all of which relate to Enamelon Proprietary
Technology. See "Patents, Trademarks and Proprietary
Information".

o In March 1997, the Company began to test market Enamelon(TM)
toothpaste in selected United States markets.

o In June 1997, the Company completed a private placement of
1,080,000 shares of Common Stock to certain institutional
investors and high-net- worth individuals for which Allen &
Company Incorporated and Dillon, Read & Co. Inc. acted as
placement agents.

The Company intends to continue its test market of Enamelon(TM)
toothpaste in several representative markets in selected United States
households. In addition, the Company currently is conducting intra oral and
small scale clinical studies to establish additional advertising claims to
consumers and dentists. Test Marketing is expected to continue throughout 1997,
with a national roll-out of Enamelon(TM) toothpaste in the first half of 1998.
The Company expects to continue to incur operating losses throughout this period
and expects to require additional financing to continue its operations
thereafter.

The worldwide toothpaste market is estimated to exceed $5.0 billion in
annual retail sales. Annual toothpaste sales in the United States were estimated
at $1.75 billion in 1997 and are projected to reach $2.0 billion by the turn of
the century. Over the last five years, the toothpaste market has become
segmented as new, premium-priced products offering benefits such as tartar
control or whitening or containing ingredients such as baking soda have steadily
attracted consumers away from older, more mature products.

Technology

On a daily basis, teeth lose small amounts of calcium and phosphate,
the major structural ingredients of tooth enamel. This demineralization occurs
as plaque acids gradually dissolve tooth enamel.

Saliva contains low levels of calcium and phosphate ions to naturally
fight this demineralization process. The presence of fluoride in the saliva is
also known to facilitate remineralization of calcium and phosphate. However,
remineralization is limited by the small amounts of calcium and phosphate ions
normally present in the saliva. If the demineralization process is not balanced
by remineralization, it eventually dissolves the mineral structure of the tooth
and causes dental cavities, which can only be repaired by a dentist.

In the 1950s, scientists at Indiana University discovered that the
inclusion of fluoride in toothpaste reduces the incidence of tooth decay. When
teeth are brushed with a fluoride-containing toothpaste, the fluoride diffuses
into the tooth along with minerals existing in saliva, including calcium and
phosphate. With currently available fluoride toothpastes, this process is
limited by the low levels of calcium and phosphate ions found in saliva as well
as by the small amounts of fluoride absorbed into the tooth as a result of
brushing. This slow remineralization process can be overcome by demineralization
cycles resulting in the gradual destruction of the mineral structure of teeth.

In contrast, the Company's studies have demonstrated that Enamelon(TM)
toothpaste simultaneously supplies the active ingredient, sodium fluoride, and
high concentrations of ions of the inactive ingredients calcium and phosphate in
soluble form during brushing. The Company's in vitro and animal studies have
demonstrated that Enamelon(TM) anticavity fluoride toothpaste enhances
remineralization with a higher level of fluoride uptake, and the tooth structure
was shown to be strengthened and hardened having added mineral. This makes the
tooth less soluble and more resistant to attacks by acids from decay-causing
bacteria. The Company currently is conducting intra oral and small scale
clinical studies intended to establish additional advertising claims, including
comparative claims. See "Business - Research and Development".

<PAGE>

Strategy

The Company's objective is to develop a variety of oral care, chewing
gum, food and confectionery products that prevent tooth decay at its earliest
stage and are based on the Enamelon Technologies. The Company has developed a
strategic plan to accomplish this goal. The Company's primary strategies are to:

o Focus Initially on Toothpaste. The Company is focusing on
completing the development of its toothpaste products and
packaging, along with the necessary manufacturing processes
required to achieve desired production speeds while
controlling manufacturing costs. The Company will seek to
establish distinctive brand identity emphasizing the enhanced
remineralization benefits of its products, which will be
communicated to both consumers and dental professionals.

o Conduct Further Testing. The Company believes that a
heightened understanding of the chemistry required for
effective remineralization of tooth enamel will lead to
stronger protection from competition. Clinical studies are
being conducted to establish additional marketing claims for
consumers and dentists.

o Collaborate with Corporate Partners in Certain Product Areas
and International Markets. The Company intends to seek
domestic and international strategic alliances with consumer
product companies that will assist in the marketing and
manufacturing of oral care products outside United States.

o Capitalize on Additional Commercial Applications. The Company
believes that products such as gum, lozenges and mints may
provide benefits similar to those of its toothpaste and
represent large potential markets for the application of the
Enamelon Technologies.

Products

The Company has introduced toothpaste as its initial product line. The
Company also is exploring application of the Enamelon Technologies to oral
spray, mouth rinse, professional gel, chewing gum and food and confectionery
products, which it intends to develop after the successful commercialization of
its toothpaste. See "Risk Factors -- Dependence on Successful Development of
Initial Products," "-- Uncertainties Related to Development of Additional
Products," and "Business--ADAHF Patents and Licenses" and "-- Patents,
Trademarks, and other Proprietary Information."

Toothpastes

The Company's introductory product is an all-family fluoride toothpaste
intended to stop cavities before they begin and to enhance remineralization of
tooth enamel by providing the active ingredient sodium fluoride. Product
development activities for the Company's all-family toothpaste were completed at
the end of 1996. The Company introduced its toothpaste into test markets
consisting of approximately 5% of United States households in the early part of
1997. Assuming the successful completion of test marketing, the Company intends
to begin a national roll-out of this product in the first half of 1998.

The Company is planning to follow-up this introduction with a
toothpaste for sensitive teeth. This toothpaste will enhance remineralization of
tooth enamel and provide cavity protection and pain relieving properties for
individuals with exposed dentin caused by receding gums. The Company is planning
a September 1997 market test of the initial formulation of its toothpaste for
sensitive teeth. Other entries such as tartar control and gum care toothpastes
also are anticipated as possible future product line extensions.

<PAGE>

In order to dispense its toothpaste products, the Company also has
developed a patented split system toothpaste tube that simultaneously dispenses
two formulations. The split system tube has dual chambers, maintaining
separation between two-component formulations until they are dispensed onto a
toothbrush. Unlike presently used split system toothpaste dispensing systems,
which employ expensive pumps, the Company's tube was designed to be filled with
conventional high-speed tube filling equipment, thus making the cost lower than
other dual chamber toothpaste dispensing systems. See "Business--Manufacturing".

Additional Potential Products

Chewing Gum. Chewing gum stimulates saliva which helps neutralize some
of the acids remaining in the mouth after eating. The Company believes that
providing greater levels of calcium and phosphate in chewing gum may have the
two-fold benefit of reducing demineralization through the increased stimulation
of saliva while increasing remineralization through the use of the Enamelon
Technologies. Accordingly, the Company believes that its proposed chewing gum
may be a beneficial supplement to brushing. Currently, the Company does not have
plans to develop and market independently a chewing gum. Therefore, it may seek
to sublicense or enter into joint ventures or strategic partnerships with major
chewing gum manufacturers or other entities that have appropriate sales and
marketing expertise to develop and market these products.

Oral Spray, Mouth Rinse and Professional Gels. The Company is pursuing
the development of other oral care products including oral sprays, mouthwash and
professional dental gels to be marketed outside of the United States.

Food and Confectionery. The Company believes that the addition of the
Enamelon Technologies to food and confectionery products, such as lozenges or
mints, can provide benefits similar to the Company's other proposed products.
The Company has begun to evaluate the possible uses of the Enamelon Technologies
in these areas and intends to explore such applications following the
commercialization of its toothpastes.

To date, the Company has concentrated development efforts on its
toothpaste products. Expansion of the Company's product development activities
with respect to other potential applications of the Enamelon Technologies will
require significant efforts. See "Risk Factors--Uncertainties Related to
Development of Additional Products."

Research and Development

Since January 1994, the Company has centralized its internal research
and development activities at its research laboratory. The laboratory is
responsible for all technology, formulation, flavor, packaging and process
development, and stability evaluations. Much of the efficacy testing is
performed at leading universities and outside research facilities.

Prior to the introduction of Enamelon(TM) toothpaste, the Company
conducted in vitro and animal studies to assess the effectiveness of the
Enamelon Technologies. The results of the in vitro studies generally
demonstrated that the prototype toothpaste formulations using the Enamelon
Technologies resulted in increased hardness and fluoride uptake over that
obtained by the prevailing industry standard. The results of the animal studies
generally demonstrated that interproximal lesions were reduced compared with
lesions existing prior to a two-week daily treatment with prototype
formulations. While the formulations used in the foregoing tests differ from the
final formulation of Enamelon(TM) toothpaste, similar ingredients are used in
the final formulation, and the Company believes that the results of similar in
vitro and animal tests with the final formulation would not differ significantly
from those described above.

The Company has also conducted the studies required by the Monograph in
order to sell Enamelon(TM) toothpaste to the public and is now performing
additional in vitro, animal, intra oral and small scale clinical studies at
leading independent oral research facilities in the United States, which are
intended to begin to establish additional advertising claims, including
comparative claims.

Notwithstanding the foregoing, the results of the Company's in vitro
and animal tests are not necessarily indicative of the results that will be
obtained in human clinical studies. The human studies are being conducted under
substantially different conditions from those of the laboratory tests, and there
can be no assurance that the human studies will support additional advertising
claims, including comparative claims. While studies to date support the claims

<PAGE>

being made for Enamelon(TM) toothpaste, there can be no assurance that
additional studies will be supportive, that additional claims can be made for
the product, or that the technology can be applied in other oral care products.
Furthermore, some of the Company's other proposed products may not be covered by
the Monograph, but may be subject to other FDA regulations, which would require
additional testing. See "Risk Factors-- Dependence on Successful Development and
Marketing of Initial Product," "--Substantiation of Additional Advertising
Claims," and "--Compliance with the FDA Monograph."

The current focus of the Company's toothpaste development program is on
the development of a toothpaste for sensitive teeth. The Company has also begun
to conduct research on methods for employing the Enamelon Technologies in other
oral care products that it will seek to market. However, the formulations of the
Company's toothpaste products and other proposed products constantly change as
dictated by consumer testing and research and development. See "Risk Factors--
Evolving Product Formulations."

In June 1997, the Company leased approximately 5,000 square feet of
space near its New Jersey offices for use as the Company's pilot manufacturing
facility. The Company believes that the additional space and equipment will
enable it to enhance its ability to develop new and improved product
formulations using the Enamelon Technologies. See "Business-- Properties."

From the Company's inception to March 31, 1997, the Company spent
approximately $3,376,702 on its research and development activities, including
$1,762,000 for the year ended December 31, 1996. The Company expects the level
of its research and development expense to increase in the future.

Manufacturing

The Company will not manufacture its toothpaste products for the United
States market at the outset, but will instead utilize contract manufacturers.
For the balance of the worldwide toothpaste markets, as well as for the
Company's other proposed products, the Company may seek to sublicense or enter
into joint ventures or strategic partnerships with major consumer product
companies or other third parties on either an exclusive or non-exclusive basis.
Manufacturing arrangements in these markets are likely to be reflected in any
agreements establishing such relationships and may place primary manufacturing
responsibilities on others.

The Company possesses laboratory size batching and tube filing
capabilities, enabling it to produce small quantities of its proposed products
at Enamelon's laboratory facility. The Company has contracted with an
FDA-approved manufacturer with facilities capable of providing proper batching
and high speed filling and packaging, according to the Company's specifications.
The Company purchases all packaging and raw materials, and the manufacturer is
responsible for quality control.

The Company has purchased manufacturing equipment for the production of
its patented, split system toothpaste tube and for high speed tube filling. The
equipment is owned by the Company for use by the contract manufacturer. The
Company believes that this will provide greater long-term flexibility,
permitting it to change manufacturers or even to commence its own manufacturing
operations. As demand for the Company's products increases, it will be necessary
to use other contract manufacturers. See "Business -- Government Regulation",
"Risk Factors -- Dependence on Others to Manufacture" and "-- Compliance with
Other Government Regulation."

Marketing

The Company is focusing its initial marketing activities on entering
the toothpaste market. The toothpaste market is highly competitive and
constantly changing as consumers continue to be receptive to product
improvements, taste enhancements and innovative packaging changes. The Company
believes that cavity prevention remains one of the most important product
attributes to attract consumers, and it intends to emphasize these qualities of
Enamelon(TM) toothpaste and its other proposed toothpaste products.

<PAGE>

In March 1997, the Company began to test market Enamelon(TM) all-family
toothpaste in selected United States markets. This test market introduction will
allow the Company to assess carefully all elements of the marketing mix and make
desired changes prior to launching Enamelon(TM) toothpaste nationally. Upon
successful completion of test marketing, the Company intends to initiate
introduction of its all-family toothpaste nationally in the first half of 1998.
See "Risk Factors -- Dependence on Successful Development of Initial Product"
and " -- Uncertainty of Consumer Acceptance of Enamelon Products."

The Company recognizes that the highly competitive nature of the
toothpaste market will require significant expenditures during the introductory
phase of marketing. However, the Company believes, based on management's
experience in the over-the-counter consumer products industry, that the claims
for Enamelon(TM) toothpaste may permit development of unique product
advertising, thus enabling it to gain market share. Achieving and maintaining
market penetration will require significant efforts by the Company to create
awareness of and demand for the Company's toothpaste and other proposed
products.

The Company's ability to build its customer base will be dependent on
its developing a successful marketing program. To the extent the Company
sublicenses or enters into joint ventures or strategic partnerships with a
well-established company in international markets, its domestic marketing
capabilities may thereby be complemented and enhanced. See "Risk Factors -
Limited Marketing Capability."

Professional Marketing

The Company presently anticipates establishing relationships with
dental professionals to create awareness and endorsements for its technology and
products. The Company's professional marketing activities include placing
advertisements and technical articles in professional journals as well as
attending professional conventions and distributing patient samples.

Consumer and Trade Marketing

The Company plans to build retail distribution and obtain retail shelf
space in food, drug and mass merchandisers through recruiting and supervising
experienced food and drug brokers who have strong regional ties with major
retailers. These efforts will be supported by competitive trade allowances,
television advertising and introductory trial promotions including sampling and
couponing.

Foreign Marketing

The Company will initially focus its marketing activities in the United
States. Accordingly, the Company has only preliminary formulated plans for its
foreign marketing activities. However, the Company's role in marketing its
products in foreign countries will depend on the type of strategic relationships
it can develop with third parties.

Competition

The United States toothpaste industry is dominated by Procter & Gamble
Co.'s Crest, Colgate-Palmolive Company's Colgate, SmithKline's Aquafresh,
Chesebrough- Pond's USA Co.'s Mentadent, Church & Dwight Co., Inc.'s Arm &
Hammer Dental Care, and Block Drug Co., Inc.'s Sensodyne. The industry is led by
Procter & Gamble Co. and its leading brand, Crest, which established it position
as a market leader when it received the seal of the American Dental
Association's Council on Dental Therapeutics for its use of fluoride in the
early 1960's.

Although the toothpaste market is mature, in recent years new products
have captured market share from established brands. Market share gains have been
achieved by higher priced, more therapeutically oriented new products with
unique marketing positions. Consequently, the Company believes that the focus on
enhanced remineralization of tooth enamel will capture consumer and professional
interest.

<PAGE>

If the Company attempts to develop a chewing gum using the Enamelon
Technologies, then it will be entering a highly competitive industry. The
chewing gum market in the United States is dominated by major competitors
including Wm. Wrigley Jr. Co., Warner-Lambert Company and RJR Nabisco, Inc. The
Company also intends to compete in the food and confectionery industries. To the
extent that the Company will sublicense or enter into joint ventures or
strategic partnerships with major consumer products companies, of which no
assurance can be given, it may be aligning itself with one or more of its major
competitors instead of competing with them. The Company will also be required to
comply with FDA's food labeling regulations, which may limit the claims that may
be made for the Company's proposed chewing gum.

Additionally, the Company is pursuing the development of its rights to
manufacture and market oral sprays, mouth rinses and professional gels outside
of the United States, in addition to its proposed toothpaste, chewing gum, food
and confectionery products. The international markets for these products are in
many ways similar to the United States markets in that consumers are becoming
increasingly aware of the importance of oral hygiene. Product innovation with
emphasis on therapeutic benefits is continuous. The Company's competition in
markets outside the United States will vary by product and from country to
country. However, in general, such markets tend to be highly competitive and
dominated by large multinational and domestic corporations. The Company does not
presently have the resources that are necessary to compete on a global scale and
intends to seek corporate partners and/or negotiate license agreements with
companies that have the resources to compete effectively in foreign markets.
Although the Company will attempt to form strategic alliances with global
companies, it may also seek to negotiate on a country-by-country basis with
major regional companies, as necessary or appropriate.

ADAHF Patents and Licenses

United States License Agreement

The ADAHF Patent Rights licensed to the Company relate to five United
States patents. Three of the issued patents cover formulations, including
toothpastes, chewing gums, mouth rinses and professional gels, containing or
capable of producing Amorphous Calcium Phosphate, Amorphous Calcium Carbonate
Phosphate and Amorphous Calcium Phosphate Fluoride, as well as the application
of these formulations to teeth. The other two patents cover advanced technology,
including Amorphous Calcium Phosphate Carbonate Fluoride and Amorphous Calcium
Fluoride compounds and other technology not covered in the first three United
States Patents.

In June 1992, the Company entered into a License Agreement (the
"License Agreement") with the ADAHF. This License Agreement, as restated and
amended, grants the Company the exclusive United States licenses to manufacture
and sell toothpastes, chewing gum, food and confectionery products using the
ADAHF Patented Technology. Under the License Agreement, the Company is required
to make royalty payments of 4% of net sales, subject to minimum royalty payments
of $3,000 in 1992, $5,000 in 1993 and $7,000 in each subsequent year. The
License Agreement extends until three years after the Company determines and
thereafter notifies the ADAHF that the following two conditions have been met:
(i) The material claimed in the ADAHF patents and patent application has been
stabilized in the form to be used in toothpastes, chewing gums, confections and
foods to enable it to be stored and marketed in a manner similar to other such
products and (ii) a licensed product has received the first FDA approval
necessary, if any, for marketing to professionals or the general public. The
exclusive license under the License Agreement may be extended by the Company in
additional four-year increments as to each of the product categories or as to
all such product categories, provided that the Company has complied with its
royalty and other obligations under the License Agreement and has, as to each
relevant product category or categories, sold products generating more than
$17,000 in royalties in the last year of the preceding exclusivity period.
Unless the License Agreement is otherwise terminated as provided therein, it
will extend for the term of the last to expire of any patent licensed under the
License Agreement in the United States, including patents of improvements
licensed as described below. If the period of exclusivity under the License
Agreement is not renewed, then the license becomes non-exclusive for the
remaining term of the agreement. The Company paid $5,000 as an initial license
fee under the License Agreement.

<PAGE>

The License Agreement may not be assigned, transferred or sublicensed
by the Company without the prior written consent of the ADAHF, which consent may
not be unreasonably withheld. However, the License Agreement may be assigned to
another company in which the Company owns more than 50% of the voting stock
without the prior written consent of the ADAHF.

The License Agreement provides that improvements that are used with or
that require use of toothpastes, chewing gum, foods or confections that embody
material claimed in the ADAHF Patent Rights, as well as any improvements and
inventions that are made jointly by the Company and the ADAHF that do not relate
to remineralization or commercialization of such products or of the subject
matter of the ADAHF Patent Rights, will be owned by the ADAHF and licensed to
the Company. The Company has the right to veto the granting of licenses relating
to such improvements and inventions that are developed in part by the Company.

The ADAHF Patent Rights may claim the effectiveness of ingredients that
do not fall under the Monograph. However, Enamelon(TM) toothpaste does not rely
on those ingredients as active ingredients, but rely only on sodium fluoride as
the sole active ingredient. See "Risk Factors-- Compliance with the Monograph"
and "--Compliance with Other Government Regulation."

Foreign License Agreement

In November 1992, the Company entered into a Foreign License Agreement
(the "Foreign License Agreement") with the ADAHF, which was subsequently
restated and amended and grants the Company an exclusive license to manufacture
and sell toothpastes, chewing gum, food and confections using the inventions
that are the subject matter of foreign patent applications filed by the ADAHF in
certain Patent Cooperation Treaty ("PCT") countries as well as Argentina,
Taiwan, the Peoples Republic of China, India, Mexico and Venezuela, among
others. In addition, the Foreign License Agreement grants the Company the
non-exclusive right to manufacture and sell other products in such countries
using inventions that are the subject of such foreign patent applications,
including oral sprays, mouth rinses and professional gels. Under the Foreign
License Agreement, the Company is required to pay 7% of net sales (4% if such
sales are made by an entity that joint ventures with the Company). If the
Company sublicenses a foreign patent, it is required to pay to the ADAHF 25% of
the gross income resulting from such sublicense actually received by the
Company. The Foreign License Agreement expires upon the earlier of the
termination of the License Agreement, except as to those countries for which the
royalty paid per county in the preceding year exceeded $7,000, or the expiration
of the last to expire of any foreign patent licensed under the Foreign License
Agreement or the abandonment or lapse of all foreign patents and applications.

The Company was notified in July 1995 that the ADAHF entered into a
license agreement with SmithKline for exclusive rights in the United States for
the fields of use other than toothpastes, chewing gum, food and confections
(including oral sprays, mouth rinse and professional gels)utilizing the ADAHF
Patented Technology. The Company's non-exclusive rights for these additional
applications outside of the United States are co-extensive with the
non-exclusive rights granted to SmithKline for these products outside of the
United States. Since SmithKline has substantially greater financial and other
resources than those of the Company, the Company may be limited in its ability
to compete effectively with SmithKline outside of the United States, unless the
Company enters into a strategic alliance with another company having financial
and other resources comparable to those of SmithKline. See "Risk Factors --
Competition."

Under the Foreign License Agreement, as restated, the Company was also
granted an option and right of first refusal during the term of the Foreign
License Agreement, for a limited license under future patents and patent
applications for inventions and material covered by and claimed in the ADAHF's
foreign patent rights, for all territories not included within the United States
or licensed territories under the licenses, with respect to toothpastes, chewing
gum, food and confectionery products. Before granting such a license for a
territory to third-parties, the ADAHF must first notify the Company, which will
then have the right to obtain a license for that territory on terms consistent
with the Foreign License Agreement. To the extent the ADAHF has not granted a
license to a third-party notwithstanding the Company's failure to exercise its
right of first refusal, the Company has the additional option to receive a
license in any of such territories on terms consistent with the Foreign Licenses
Agreement.

<PAGE>

The Company presently is the licensee under the Foreign License
Agreement of certain ADAHF Patent Rights under patent applications pending in
seven foreign jurisdictions. Patent applications made in certain other foreign
jurisdictions, however, have been abandoned. Nevertheless, the Company believes
that its filing of current and contemplated patent applications with respect to
the Patent Rights in any foreign jurisdictions in which patent applications have
been abandoned and the subsequent issuance of patents in those jurisdictions
will be adequate to preclude other manufacturers from using the Enamelon
Technologies in those jurisdictions. There can be no assurance, however, that
manufacturers outside of the United States will not infringe the Patent Rights
or challenge their validity. See "Risk Factors-- Uncertain Ability to Protect
Patents and Other Intellectual Property" and "Business--Patents, Trademarks and
Other Proprietary Information."

The License Agreement and Foreign License Agreement are both subject to
(i) licenses granted to the United States, which are not transferable by the
government and (ii) rights retained by the ADAHF to make and use its inventions
for research and testing, but not to sell or use them commercially in fields
licensed exclusively to the Company.

The ADAHF has made no representation or warranty, express or implied,
with respect to the efficacy or possible commercial exploitation of the
Company's proposed products.

Patents, Trademarks and Proprietary Information

Patents

The Company has been granted five United States patents for methods and
materials that supply soluble calcium and phosphate salts to teeth to enhance
remineralization, and one patent for its dual chamber toothpaste tube, which is
used to dispense Enamelon(TM) toothpaste. In addition, the Company has nine
patent applications with respect to various aspects of the Enamelon Technologies
pending in the United States, four patent applications pending with the PCT
countries (which include Canada, Japan, Belgium, France, Germany, the United
Kingdom, the Netherlands, Australia, and Sweden, among others), and two patent
applications pending in India. The issued patents and the patent applications
cover the Company's remineralization technology as it could be applied to a
broad range of oral care products, including toothpaste, mouth rinse, chewing
gum, lozenges, and professional treatments.

To the extent that the methods and materials covered by the Enamelon
Patent Rights result in and rely on the formation of compounds covered by the
ADAHF Patent Rights, the Company will have to pay royalties to the ADAHF under
the License Agreements, even if the Company is using technology covered by the
Enamelon Patent Rights in the manufacture of its products. No such royalties
will be payable with respect to products using technology covered by the
Enamelon Patent Rights, but not the ADAHF Patent Rights. Company scientists and
ADAHF scientists are presently determining whether Enamelon(TM) toothpaste uses
any of the technology covered by the ADAHF Patent Rights. See "Business-- ADAHF
Patents and Licenses."

The Enamelon Patent Rights may claim the effectiveness of ingredients
that do not fall under the Monograph. Enamelon(TM) toothpaste, however, does not
rely on those ingredients, but relies only on sodium fluoride as the sole active
ingredient.

The Company is not aware of the existence of any challenges to the
validity of the Enamelon Patent Rights or of any claim made by a third party of
patent infringement with respect to Enamelon(TM) toothpaste. No assurance can be
given, however, that such challenges or claims will not be asserted in the
future. See "Risk Factors-- Uncertain Ability to Protect Patents and Other
Intellectual Property."

<PAGE>

Trademarks

The Company intends to protect the names of certain of its products and
formulations by registration of its trademarks, where appropriate, both in the
United States and in foreign countries.

The Company has filed applications in the United States Patent and
Trademark Office to register the word mark ENAMELON, on the Principal Register,
for toothpaste, chewing gum, certain confection products, and various oral care
products, such as medicated mouth washes and professional dental gels. The
application covering toothpaste has been approved, and a registration is
scheduled to issue in late August 1997. The applications covering chewing gum,
confection and oral care products have been allowed, subject to use of the mark.
The Company has also registered or applied to register the ENAMELON mark for
toothpaste, chewing gum and/or certain confection products in certain foreign
countries. It is possible that prior registrations and/or uses of the mark (or a
confusingly similar mark) may exist in one or more countries, in which case the
Company might thereby be precluded from registering and/or using the ENAMELON
mark is such countries. Other trademarks are being considered by the Company.

In connection with the Company's anticipated Internet web site, the
Company has registered with Network Solutions, Inc. the Internet domain name
"ENAMELON.COM."

The Company has also filed applications to register the trademarks
FLUOREMIN and LIQUID CALCIUM and its stylized "E" logo in the United States and
Canada. In addition, the Company is considering other trademarks and has filed
applications to register those marks in the United States and Canada.

In connection with its trademark protection and registration program,
the Company acquired from a third party its rights in and to the mark ENAMELINE,
for use in connection with chewing gum, including the United States registration
for such mark. The assignment was made on a quitclaim basis without any
representations or warranties as to the validity or subsistence of the rights
and registration so assigned. The Company has not yet determined whether it will
use the mark ENAMELINE.

The Company is not aware of any third party challenges to the validity
of its trademarks, trademark registrations, or trademark applications, or of any
claim by a third party of trademark infringement with respect to its products,
marks, registrations or applications. No assurance can be given, however, that
such challenges or claims will not be asserted in the future. See "Risk
Factors-- Uncertain Ability to Protect Patents and Other Intellectual Property."

Proprietary Information

Much of the Company's technology is dependent upon the knowledge,
experience and skills of key scientific and technical personnel. To protect
rights to its proprietary know-how and technology, Company policy requires all
employees and consultants to execute confidentiality agreements that prohibit
the disclosure of confidential information to anyone outside the Company. These
agreements also require disclosure and assignment to the Company of discoveries
and inventions made by such persons while devoted to Company activities. There
can be no assurance that these agreements will not be breached, that the Company
will have adequate remedies for any such breach or that the Company's trade
secrets will not otherwise become known or be independently developed by
competitors. In addition, it is possible others may infringe the patent rights
of the Company. See "Risk Factors -- Protection of Proprietary Technology and
Information."

Government Regulation

Under the Federal Food, Drug, and Cosmetic Act, as amended, and the
implementing regulations promulgated by the FDA, a non-prescription
(over-the-counter) drug may be marketed in one of two ways. The FDA has
established a program to promulgate "monographs" determining the conditions
under which most non- prescription drugs may be marketed without the requirement
of an NDA. The monographs establish those active ingredients that are safe and
effective at specified levels and all aspects of the labeling that are permitted
for these products. The monographs establish all of the conditions for marketing
a non- prescription drug without the need for an NDA. Any non-prescription drug
that does not comply with the final monograph may lawfully be marketed only if
it has an approved NDA. Because it is time consuming and costly to obtain FDA
approval of an NDA, most non-prescription drugs (except those that have recently
been switched from prescription to non-prescription status) are marketed
pursuant to an FDA over-the counter drug monograph.

<PAGE>

The FDA has published the Monograph for over-the counter anticaries
drug products, the category of over-the-counter drug products covering the
Company's proposed oral care products. The Monograph establishes conditions
under which non- prescription drug products that aid in the prevention of dental
caries or cavities are generally recognized as being safe and effective and not
misbranded. The Company intends to rely on the advice of FDA counsel to satisfy
formulation and labeling requirements of the Monograph as they apply to the
Company's products.

Although the Company intends to make only such packaging claims as are
permitted by the Monograph in order to avoid the substantial expense and time
required to receive FDA approval under an NDA, it may seek to file an NDA with
the FDA in order to make further claims not covered by the Monograph. If the
Company decides to or is required to make such additional claims, it may seek
strategic partners to assist in the financing of the NDA process. Further, the
Company may not have sufficient financing or other resources available to
complete the NDA process and assuming such financing and resources are
available, there is no assurance that the FDA will approve the NDA.

Each domestic drug product manufacturing facility must be registered
with the FDA. Each manufacturer must inform the FDA of every drug product it has
in commercial distribution and keep such list updated. Domestic manufacturing
facilities are also subject to at least biannual inspection by the FDA for
compliance with Good Manufacturing Practice ("GMP") regulations promulgated by
the FDA. Compliance with GMP regulations is required at all times during the
manufacture and processing of drug products. Accordingly, to the extent that the
Company uses contract manufacturers, such manufacturers must be in compliance
with all FDA requirements.

The Company is also subject to regulation under various federal and
state laws regarding, among other things, occupational safety, environmental
protection, hazardous substance control and product advertising and promotion.
In connection with its research and development activities, the Company is
subject to federal, state and local laws, rules, regulations and policies
governing the use, generation, storage, discharge, handling and disposal of
certain materials and wastes. The Company believes that it has complied with
these laws and regulations in all material respects and it has not been required
to take any action to correct any material noncompliance. The Company does not
currently anticipate that any material capital expenditures will be required in
order to comply with federal, state and local environmental laws or that
compliance with such laws will have a material effect on the financial condition
or competitive position of the Company. The Company may also be subject to
foreign government regulations regarding over-the-counter drug products.
Accordingly, the Company intends to submit applications to foreign regulatory
agencies, if necessary, to make therapeutic health claims for its products to be
marketed abroad. See "Risk Factors -- Compliance with Other Government
Regulation."

Liability Insurance

The Company's business involves exposure to potential product liability
risks that are inherent in manufacturing and marketing of pharmaceutical
products. The Company currently has general liability insurance with coverage
limits of $1,000,000 per occurrence and $2,000,000 on an annual aggregate basis
and product liability insurance with coverage limits of $6,000,000 per
occurrence and $7,000,000 on an aggregate basis. While the Company's insurance
polices provide coverage on a "per occurrence" basis and are subject to annual
renewal, there can be no assurance that the Company will be able to maintain
such insurance on acceptable terms, that the Company will be able to secure
increased coverage or that any insurance will provide adequate protection
against potential liabilities.

Personnel

The Company has 20 full-time employees and four part-time employees.

<PAGE>

Properties

The Company currently subleases office facilities located at 15 Kimball
Avenue, Yonkers, New York from an affiliate. The Company leases office and
laboratory facilities in East Brunswick, New Jersey which expires December 31,
1998. The combined amount of space which relate to the above leased premises
total approximately 5,200 square feet.

The Company leased an additional 5,000 square feet for its product
development needs in the second quarter of 1997 and anticipates occupying the
additional space in the third quarter. See "Business -- Research and
Development."

The Company believes that if its program continues as anticipated, it
will need additional space for its administrative and research and development
needs. Since the Company presently intends to rely on outside manufacturers to
manufacture its products, it does not have a manufacturing facility. See "Risk
Factors -- Dependence on Others to Manufacture" and "Business -- Manufacturing."

Litigation

The Company is not a party to any pending legal or administrative
proceeding, and its property is not subject to such a proceeding.

<PAGE>

MANAGEMENT

Directors and Executive Officers

The following table sets forth information regarding the Company's
directors and executive officers.

NAME AGE POSITION
<S> <C>
Dr. Steven R. Fox............................ 43 Chairman of the Board and Chief Executive
Officer
D. Brooks Cole............................... 57 President and Chief Operating Officer
Norman Usen.................................. 55 Vice President-Product Development and
Secretary
Anthony E. Winston........................... 52 Vice President-Technology and Clinical
Research
Thomas J. Duncan............................. 49 Vice President-Operations
Edwin Diaz................................... 34 Vice-President-Finance, Chief Financial
Officer and Treasurer
Dr. S.N. Bhaskar............................. 74 Director
Dr. Bert D. Gaster........................... 70 Director
Richard A. Gotterer.......................... 34 Director
Eric D. Horodas, Esq......................... 44 Director
</TABLE>

The business experience, principal occupations and employment, as well
as the periods of service, of each of the directors and executive officers of
the Company during at least the last five years are set forth below.

Steven R. Fox, D.D.S., F.I.C.D., F.A.C.D., is the founder of the
Company, and has been Chairman of the Board of Directors and Chief Executive
Officer of the Company since June 1992. From June 1992 through December 1995 and
from June 1992 through June 1996, respectively, Dr. Fox was also the Company's
President and Treasurer. Dr. Fox is a member of the faculty of the Harvard
School of Dental Medicine. Since July 1978, Dr. Fox has been a practicing
dentist and currently practices dentistry on a part-time basis. Dr. Fox was an
Assistant Clinical Professor at New York University's College of Dentistry from
1979 to 1987. Dr. Fox has been active in various professional organizations,
including the International Dental Research Society, the American Dental
Association and the Ethics Committee of the Ninth District Dental Society. See
"Management -- Employment and Consulting Agreements."

D. Brooks Cole has been the President and Chief Operating Officer of
the Company since January 1996. Commencing in September 1993, Mr. Cole was
retained by the Company as a consultant. Mr. Cole has over twenty-five years of
experience in the marketing of over-the-counter drugs, oral care products and
cosmetics. Mr. Cole was employed by the Mentholatum Company, Inc., an
over-the-counter drug company, in various positions from 1980 to 1993, most
recently as President of the United States Division, and a member of the
Executive Committee and the Board of Directors from 1983 to 1993. He was
employed at Avon Products, Inc., a cosmetics company, in various positions from
1971 to 1980, most recently as a Vice President from 1976 to 1980. Mr. Cole was
employed at Vick Chemical Company, a consumer drug company, and served in
several sales, promotion and product marketing positions from 1961 to 1971. Mr.
Cole was a Vice President of the Non Prescription Drug Manufacturers Association
and served on its Board of Directors and Executive Committee from 1990 to 1993.
See "Management -- Employment and Consulting Agreements."

Norman Usen has been Vice President-Product Development and Secretary
of the Company since May 1995. Prior to that time, Mr. Usen served as Vice
President- Research and Development and Product Development of the Company from
July 1993 to May 1995 and as Vice-President of Operations from May 1995 to
November 1996. Mr. Usen has specialized in consumer product development with 30
years' experience in product development, contract manufacturing and consumer
research. He had substantial responsibility for the development of Arm & Hammer
Toothpaste and Toothpowder for Church & Dwight Co., Inc. from 1982 to 1991.
Since 1992, Mr. Usen, as President and sole stockholder of Nu-Products, Inc.
("NP"), has been an independent consultant. From August 1993 through April 1995,
NP was retained by the Company as a consultant on a part-time basis to
coordinate product development. See "Management -- Employment and Consulting
Agreements."

<PAGE>

Anthony E. Winston has been the Vice President-Technology and Clinical
Research since January 1995. Mr. Winston has over 25 years of technology
development and clinical research experience most recently as Technical Director
for Church & Dwight Co., Inc. where he was responsible for technology
development, clinical research, ADA and FDA interface, claim substantiation and
patent protection for Arm & Hammer's baking soda toothpastes, including their
latest introduction: Peroxy Care(R). Mr. Winston is the holder or co-holder of
more than 60 United States patents, of which 14 are for toothpaste products,
with two additional oral care patents pending. See "Management -- Employment and
Consulting Agreements."

Thomas J. Duncan has been the Vice President-Operations since May 1997.
Commencing in November 1996, Mr. Duncan served as Director of Manufacturing. Mr.
Duncan has over 20 years' experience in manufacturing and engineering at
consumer products companies. Mr. Duncan was a Project Manager in Corporate
Engineering at Church & Dwight Co., Inc. from 1982 through 1995. Mr. Duncan also
was a Division Engineer at Boyle-Midway Division of American Home Products from
May 1978 through October 1981.

Edwin Diaz, has been Chief Financial Officer, Vice President - Finance,
and Treasurer since August 1996. Prior to joining the Company, Mr. Diaz was the
Corporate Controller of NYCOR, INC., a manufacturer of devices used in heating
and cooling systems, from September 1994 to August 1996. He was the Controller
of Lancer Industries, Inc., a company specializing in the acquisition of
distressed and under-performing companies, from 1990 until August 1994. Mr. Diaz
was employed by the Alferi Organization, a real estate development company, as
Assistant Controller from 1988 until 1990 and by the accounting firm of Arthur
Young & Company from 1986 until 1988. Mr. Diaz is a certified public accountant.

S.N. Bhaskar, D.D.S., M.S., Ph.D., Major General U.S. Army (Ret.) has
been a director of the Company since August 1994 and the Chairman of the
Scientific Advisory Board since August 1992. Since 1981, Dr. Bhaskar has been in
a private dental practice in Monterey and Salinas, California. From January 1955
to December 1980, Dr. Bhaskar was Major General, Dental Corps in the United
States Army, Assistant Surgeon General for Dental Services of the United States
Army and Chief of the United States Army Dental Corps. He is an Honorary Fellow
of the Academy of General Dentistry, a Diplomat to the American Board of Oral
Medicine and the American Board of Oral Pathology, and a member of the Dental
Research Advisory Committee to the United States Army. Dr. Bhaskar is a former
Vice Chairman of Atrix Laboratories, Inc. and a consultant to the Board of
Directors at Vipont, Inc., a publicly-traded company engaged in the development
and marketing of oral care products.

Bert D. Gaster, D.D.S., M.S.D. has been a director of the Company since
November 1992 and is a tenured Associate Professor at New York University's
College of Dentistry. Dr. Gaster has held various faculty positions with New
York University's College of Dentistry since 1972, including that of Clinic
(Module) Director for nine years. Dr. Gaster is a member of the American College
of Prosthodontics, has served on the Budget Policy Development Committee and
currently is a Director of the New York University Dental Alumni Association.
Dr. Gaster is currently an attending Prosthodontist with four hospitals in the
New York metropolitan area.

Richard A. Gotterer has been a director of the Company since November
1992 and has been a portfolio manager of fixed income securities at Schroder
Wertheim Investment Services, an investment banking firm since September 1993.
Mr. Gotterer was a private investor from June 1990 through August 1993. Mr.
Gotterer was the Vice President of Finance and Chief Financial Officer of
Channel American LPTV Holdings, Inc., an entertainment company, from February
1988 to May 1990. He was a financial analyst with Oppenheimer & Co., Inc., an
investment banking firm, from October 1985 to October 1987.

Eric D. Horodas, Esq. has been a director of the Company since November
1992. Mr. Horodas is President of Markev Realty Corporation, and is Vice
President and Secretary of Baco Realty Corporation, both of which are actively
engaged in originating, managing and servicing commercial real estate and
mortgage investments. He has also been acting as a consultant to various
insurance regulators and insurance industry members in connection with the
restructuring and rehabilitation of financially troubled insurance companies
since October 1993. Mr. Horodas was a founding partner and member of the
Management Committee of the law firm of Rubinstein & Perry, from February 1988
until October 1993.

<PAGE>

All directors hold office until the next annual meeting of stockholders
or until their successors are elected and qualify. Officers are elected annually
by, and serve at the discretion of, the Board of Directors.

Scientific Advisory Board

The Company has established a four-member Scientific Advisory Board
(the "SAB"). Each member is a distinguished chemist or dental researcher chosen
for his continuing commitment to chemistry and dental science. The SAB provides
expertise and advice to the Company in several areas including guidance for the
ethical and scientific conduct of the scientific testing of the Company's
proposed products. The SAB also works in cooperation with the Company and the
scientists at the American Dental Association's Paffenbarger Research Center at
the United States Government's National Institute of Standards and Technology,
where the ADAHF Patented Technology was developed.

Consulting compensation at annual rates ranging from $5,000 to $15,000
are paid to certain members of the SAB. In addition, the Company intends to
grant, from time to time, stock options to members of the SAB. See "Management
- -- Employee Benefit Plans" for a description of options already granted to
certain SAB members. SAB members are elected annually by, and serve at the
discretion of, the Board of Directors. Currently, the members of the SAB are as
follows:

S.N. Bhaskar, D.D.S., Ph.D., Major General United States Army (Ret.)
serves as the Chairman of the SAB and is also a member of the Company's Board of
Directors. See "Management -- Directors and Executive Officers."

Robert Bruce Merrifield, Ph.D. is the recipient of the 1984 Nobel Prize
in Chemistry as well as numerous other scientific honors, and has been the John
D. Rockefeller, Jr. Professor at The Rockefeller University since 1966. He has
been a member of the faculty at The Rockefeller Institute for Medical Research
since 1963. Dr. Merrifield is an Associate Editor of The International Journal
of Peptide and Protein Research, on the Editorial Board of Analytical
Biochemistry, and a member of the American Chemical Society, American Society of
Biological Chemists, American Institute of Chemists and the National Academy of
Sciences. Dr. Merrifield has been the Nobel Guest Professor, Uppsala, Sweden.

Joseph L. Henry, D.D.S., M.S., Ph.D., F.A.C.D., F.R.S.H., F.I.C.D. has
held faculty positions at the Harvard School of Dental Medicine, including
Interim Dean for the Dental School and Associate Dean for Government and
Community Affairs, since 1975. In December 1994, Dr. Henry retired as Associate
Dean at the Harvard School of Dental Medicine, and Professor and Chairman of the
Department of Oral Diagnosis and Oral Radiology at the Harvard School of Dental
Medicine. Dr. Henry held various faculty positions at Howard University College
of Dentistry from 1953 to 1975, including Professor of Oral Medicine,
Superintendent and Director of Clinics, and served as Dean of the Dental College
for nine years.

Hans-Peter Weber, D.M.D., has held several faculty positions at the
Harvard School of Dental Medicine since 1989, and has been Chairman and
Associate Professor of the Department of Restorative Dentistry at the Harvard
Dental School since 1992. Dr. Weber also served as the Director of Implant
Dentistry at the Harvard Dental School from 1992 to 1994. He has published
numerous articles in professional journals and is an Associate Fellow of the
Academy of Prosthodontics.

Committees of the Board of Directors

The Audit Committee, established in July 1993, currently consists of
Mr. Gotterer (Chairman) and Dr. Bhaskar. The functions of the Audit Committee
are to recommend annually to the Board of Directors the appointment of the
independent public accountants of the Company, review the scope of their annual
audit and other services they are asked to perform, review the report on the
Company's financial statements following the audit, review the accounting and
financial policies of the Company and review management's procedures and
policies with respect to the Company's internal accounting controls.

The Compensation Committee, also established in July 1993, currently
consists of Mr. Horodas (Chairman) and Dr. Gaster. The functions of the
Compensation Committee are to review and approve salaries, benefits and bonuses

<PAGE>

for all executive officers of the Company, and to review and recommend to the
Board of Directors matters relating to employee compensation and employee
benefit plans. The Compensation Committee also administers the Plan. See
"Management -- Employee Benefit Plans."

Executive Compensation

The table below summarizes the compensation received by the Company's
Chief Executive Officer for the fiscal years ended December 31, 1994, 1995 and
1996,as well as the compensation of each executive officer of the Company who
received compensation in excess of $100,000 for services rendered to the Company
during any of those years ("named executive officers"). No other executive
officer of the Company received compensation in excess of $100,000 during such
years.

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term
------------------- Compensation
------------
Securities
Underlying
Name and Principal Salary Bonus Options
Position(1) Year ($) ($) (#)
(a) (b) (c) (d) (g)
--- --- --- --- ---
<S> <C>
Steven R. Fox
Chairman of the Board and
Chief Executive 1996 $175,000 $75,000 50,000
Officer(2)(3)
1995 $ 75,000 $10,000 400,000
1994 $ 75,000 -- --
Anthony E. Winston
Vice President - Technology 1996 $135,000 $20,250
and Clinical Research
1995 $129,875 -- 160,000
D. Brooks Cole
President and Chief 1996 $150,000 $22,500 50,000
Operating Officer(3)
Normen Usen 1996 $115,000 $17,000 -
Vice-President- Product
Development
</TABLE>

(1) See "Management -- Employment and Consulting Agreements" for a
description of Dr. Fox's employment agreement with the Company as
Chairman of the Board and Chief Executive Officer which commenced on
January 1, 1994; Anthony E. Winston's employment agreement with the
Company as the Company's Vice President-Technology and Clinical
Research which commenced on January 1, 1995; D. Brooks Cole's
employment agreement with the Company whereby Mr. Cole became the
Company's President and Chief Operating Officer as of January 1, 1996;
and Norman Usen's employment agreement with the Company as the
Company's Vice President -- Research and Development.

(2) Dr. Fox resigned as the Company's President effective on January 1,
1996, and as Treasurer effective August 1996.

(3) Options granted on December 11, 1996 issued at $6.875 for Dr. Fox and
$6.25 for Mr. Cole vest 25% as of December 11, 1997 and an additional
25% on December 11 in each successive year.

The following table sets forth the individual grants of stock options
made during the fiscal year ended December 31, 1996 to each of the named
executive officers.

<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE
---- ---------- ----------- ------ ----
<S> <C>
Steven R. Fox 50,000(1) 31.3% $6.875 12/10/01
D. Brooks Cole 50,000(1) 31.3% $6.25 12/10/06
Anthony E. Winston -- -- -- --
Norman Usen -- -- -- --
</TABLE>

The following table sets forth the number of exercisable or vested and
unexercisable or unvested options during the fiscal year ended December 31, 1996
held by each of the named executive officers and the year-end value of such
options.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

VALUE OF UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT
SHARES OPTIONS AT FISCAL FISCAL
ACQUIRED YEAR-END(#) YEAR-END($)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- -------- -------- ------------- -------------
<S> <C>
Steven R. Fox - - 450,000/50,000 $ 1,462,500/0
Anthony E. Winston - - 160,000/0 360,000/0
D. Brooks Cole - - 135,000/50,000 498,870/0
Norman Usen - - 168,762/30,000 830,309/147,600
</TABLE>

Compensation of Directors

Each non-employee director receives $500 for attendance at each meeting
plus reimbursement for expenses for each meeting attended. See "Management --
Employee Benefit Plans" and "-- Employment and Consulting Agreements" for a
description of options granted to members of the Board of Directors. Each member
of the Audit Committee and the Compensation Committee receives $250 for each
meeting attended together with reimbursement of expenses.

Compensation Committee Interlocks and Insider Participation

Dr. Bert D. Gaster and Mr. Eric D. Horodas served as members of the
Company's compensation committee during the last completed fiscal year. There
are no compensation committee (or board of directors) interlock relationships
with respect to the Company.

Employment and Consulting Agreements

The Company has entered into an employment agreement with Dr. Steven R.
Fox, pursuant to which Dr. Fox is employed as Chairman of the Board of Directors
and Chief Executive Officer for a term of five years commencing on January 1,
1994. The agreement, as amended, provides that Dr. Fox shall devote such time to

<PAGE>

the Company as necessary to perform his responsibilities thereunder, but no less
than forty hours per week, in consideration of an annual salary of $75,000,
which increased to $250,000 per year in January 1997. The employment agreement
acknowledges that Dr. Fox shall be entitled to maintain his dental practice and
see patients on a basis that does not interfere with the performance of his
duties thereunder. Dr. Fox continues to practice dentistry on a part-time basis.
Pursuant to the agreement, if Dr. Fox opposes a change of control of the
Company, as defined in the agreement, and thereafter elects to terminate his
employment with the Company, he is entitled to a one time payment of either (i)
two and nine-tenths (2.9) times the sum of Dr. Fox's current base annual salary
plus any amounts due to him under the Company's Incentive Compensation Plan if a
majority of the Company's Board of Directors opposed the change of control or
(ii) two and one-half (2.5) times the sum of Dr. Fox's current base annual
salary plus any amounts due to him under the Company's Incentive Compensation
Plan if a majority of the Company's Board of Directors voted in favor of the
change of control. However, such payment shall not exceed the maximum payment
permitted by Section 280G of the Internal Revenue Code of 1986, as amended.
Pursuant to the Company's Incentive Compensation Plan, Dr. Fox is entitled to
50% of all amounts allocated to such plan. See "Management -- Employee Benefit
Plans."

The Company has entered into an employment agreement with D. Brooks
Cole, pursuant to which Mr. Cole is employed as President and Chief Operating
Officer. The agreement, as amended, provides that Mr. Cole will devote all of
his business time to the Company in consideration of an annual salary of
$175,000, subject to adjustment. In addition, Mr. Cole is entitled to 15% of all
amounts allocated to the Company's Incentive Compensation Plan. Mr. Cole serves
at the pleasure of the Board of Directors; however, if the Company elects to
terminate the agreement, Mr. Cole is entitled to six months severance pay,
including all salary and benefits. Pursuant to the employment agreement, Mr.
Cole was granted a seven-year option to purchase 99,000 shares of Common Stock
at an exercise price equal to $3.00 per share, immediately exercisable from the
date of the grant, and expiring seven years thereafter. Prior to the
commencement of this agreement, Mr. Cole had been retained by the Company on a
consulting basis at a rate of $3,000 per month, plus, for the period from July
1994 through July 1995, 3,000 Common Stock options per month at an exercise
price of $1.33 per share. Effective November 1, 1995, the consulting fee was
increased to $4,000 per month.

The Company has entered into an employment agreement with Norman Usen,
pursuant to which Mr. Usen is employed full-time as Vice President -- Product
Development for a term of three years commencing on May 1, 1995, which was
extended to June 30, 1999. The consulting agreement between the Company and Mr.
Usen's consulting company, Nu-Products, Inc. ("NP") terminated upon the
commencement of Mr. Usen's employment agreement. Pursuant to the employment
agreement, as extended, Mr. Usen will devote his full time to the Company in
consideration of an annual salary of $143,000 for the period ending June 30,
1998, and $151,000 for the period ended June, 1999. If Mr. Usen is terminated
from the Company without cause, as defined in the agreement, then he will be
entitled to continue to receive his salary and benefits until the end of the
term of the agreement. As additional compensation, Mr. Usen will be entitled to
12.5% of all amounts allocated to the Company's Incentive Compensation Plan.
Pursuant to the employment agreement, Mr. Usen was granted seven-year options to
purchase an aggregate 90,000 shares of Common Stock at an exercise price equal
to $1.33 per share. The options previously granted to NP were terminated and
reissued to Mr. Usen. See "Certain Transactions."

The Company has entered into an employment agreement with Anthony E.
Winston, pursuant to which Mr. Winston is employed full-time as Vice President
- -- Technology and Clinical Research for a term of two years ending in January
1995, which was extended to January 2000. Pursuant to the employment agreement,
Mr. Winston will devote his full time to the Company in consideration of an
annual salary of $143,000 for the period ending January 1998, $151,000 for the
period ended January 1999, and $160,000 for the period ending January 2000. If
Mr. Winston is terminated from the Company without cause, as defined in the
agreement, then he shall be entitled to continue to receive his salary and
benefits until the end of the term of the agreement. As additional compensation,
Mr. Winston shall be entitled to 10% of all amounts allocated to the Company's
Incentive Compensation Plan. Pursuant to the employment agreement, Mr. Winston
was granted ten-year options to purchase an aggregate 150,000 shares of Common
Stock at an exercise price equal to $1.33 per share.

<PAGE>

Employee Benefit Plans

1993 Stock Option Plan

In July 1993, the Board of Directors adopted the 1993 Plan which was
approved by the Company's stockholders in September 1993. The 1993 Plan provides
for the grant to qualified employees (including officers and directors) of the
Company of options to purchase shares of Common Stock. A total of 1,500,000
shares of Common Stock have been reserved for issuance upon exercise of stock
options granted under the 1993 Plan. The 1993 Plan is administered by the Board
of Directors or a committee of the Board of Directors (the "Committee") whose
members are not entitled to receive options under the 1993 Plan (excluding
options granted exclusively for directors fees). The Committee has complete
discretion to select the optionee and to establish the terms and conditions of
each option, subject to the provisions of the 1993 Plan. Options granted under
the Plan may or may not be "incentive stock options" as defined in Section 422
of the Internal Revenue Code ("Incentive Options") depending upon the terms
established by the Committee at the time of grant, but the exercise price of
options granted may not be less than 100% of the fair market value of the Common
Stock as of the date of grant (110% of the fair market value if the grant is an
Incentive Option granted to an employee who owns more than 10% of the
outstanding Common Stock). Options may not be exercised more than 10 years after
the grant (five years if the grant is an Incentive Option to any employee who
owns more than 10% of the outstanding Common Stock). Options granted under the
1993 Plan are not transferable and may be exercised only by the respective
grantees during their lifetimes or by their heirs, executors or administrators
in the event of death. Under the 1993 Plan, shares subject to canceled or
terminated options are reserved for subsequently granted options. The number of
options outstanding and the exercise price thereof are subject to adjustment in
the case of certain transactions such as mergers, recapitalizations, stock
splits or stock dividends.

As of August 1, 1997, the Company has granted pursuant to the 1993 Plan
options exercisable for periods of three to ten years to purchase an aggregate
of 1,203,355 shares of Common Stock, at an exercise price ranging from $1.33 to
$4.00 per share, to certain employees, officers and directors of the Company,
including options to purchase an aggregate of 450,000 shares granted to the
Company's Chairman of the Board at $3.00 per share, options to purchase an
aggregate of 130,515 shares granted to other members of the Company's Board of
Directors at prices ranging from $1.86 to $2.67 per share, and options to
purchase an aggregate of 41,628 shares granted to members of the Company's
Scientific Advisory Board other than members of the Company's Board of Directors
at $2.67 per share. See "Management -- Employment and Consulting Agreements" for
a description of options granted to an affiliate of an officer of the Company.

1997 Stock Option Plan

In December 1996, the Board of Directors adopted the 1997 Incentive
Stock Option Plan ("1997 Plan") which was approved by the Company's stockholders
in May 1997. The 1997 Plan provides for the grant to qualified employees
(including officers and directors), independent contractors and consultants of
the Company and/or any subsidiary or parent thereof options to purchase shares
of Common Stock. A total of 750,000 shares of Common Stock, par value $.001,
have been reserved for issuance upon exercise of stock options granted under the
1997 Plan. The 1997 Plan is administered by the Board of Directors or a Stock
Option Committee or Compensation Committee of the Board of Directors (the
"Committee") which shall be comprised of at least two Outside Directors,
appointed by the Board of Directors of the Company. The Committee has complete
discretion to select the optionee and to establish the terms and conditions of
each option, subject to the provisions of the 1997 Plan. Options granted under
the Plan may or may not be "incentive stock options" as defined in Section 422
of the Internal Revenue Code ("Incentive Options") depending upon the terms
established by the Committee at the time of grant, but in no event shall the
option price be less than 85% of the fair market value of the Common Stock at
the time of grant (110% of the fair market value if the grant is an Incentive
Option granted to an employee who owns more than 10% of the outstanding Common
Stock). Options may not be exercised more than 10 years after the grant. Options
granted under the 1997 Plan are not transferable otherwise by will or the laws
of descent and distribution and may be exercised only by the respective grantees
during their lifetimes or by their heirs, executors or administrators in the
event of death. Under the 1997 Plan, shares subject to canceled or terminated
options are reserved for subsequently granted options. In no event shall an
employee be granted options for more than 150,000 shares of Common Stock during
any calendar year period, subject to changes in the Company's capitalization.
The number of options outstanding and the exercise price thereof are subject to
adjustment in the case of certain transactions such as mergers,
recapitalizations, stock splits or stock dividends.

<PAGE>

As of the date of this Prospectus, the Company has not granted any
options pursuant to the 1997 Plan.

Incentive Compensation Plan

The Company has established a five-year incentive compensation program
to award officers and key employees for their efforts on behalf of the Company
as measured by yearly increases in the net income (before income taxes and
extraordinary items) generated by the Company. The program provides for
incentive compensation utilizing an objective formula based upon guidelines in
accordance with the Company's goals. The Company will establish a yearly bonus
pool, equal to five percent of its net income before income taxes including the
amount provided for by the incentive compensation plan, and extraordinary items
("ICP Income"), to be distributed to officers and key employees. For the
subsequent four fiscal years, such bonus pool shall only be established in the
event the Company's ICP Income equals or exceeds by at least 5% the Company's
ICP Income for the prior fiscal year. Amounts remaining in the yearly bonus pool
which are not distributed do not carry over into the subsequent year's pool. The
maximum amount an executive or key employee may receive from the bonus pool is
limited to two times such person's salary.

Indemnification

Pursuant to the Company's Certificate of Incorporation and By-laws,
officers and directors of the Company will be indemnified by the Company to the
fullest extent allowed under Delaware law for claims brought against them in
their capacities as officers or directors. Indemnification is not allowed if the
officer or director does not act in good faith and in a manner reasonably
believed to be in the best interests of the Company, or if the officer or
director had no reasonable cause to believe his conduct was lawful. Accordingly,
indemnification may occur for liabilities arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted for directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.

PRINCIPAL SECURITYHOLDERS

The following table sets forth as of the date of this prospectus,
certain information, with respect to the beneficial ownership of shares of
Common Stock by (i) each person known by the Company to be the owner of more
than 5% of the outstanding shares of Common Stock, (ii) each director, (iii)
each named executive officer and (iv) all directors and executive officers as a
group:

<PAGE>

AMOUNT AND
NATURE OF PERCENTAGE OF
NAME AND ADDRESS BENEFICIAL OUTSTANDING
OF BENEFICIAL OWNERS(1) OWNERSHIP(2) SHARES OWNED(3)
- ----------------------- ------------ ---------------
Dr. Steven R. Fox(4) 3,423,240(5) 39.8%
Dr. Bert Gaster(4) 25,253(6) *
Mr. Richard Gotterer(4) 90,512(6) 1.1%
Mr. Eric Horodas(4) 109,262(6)(7) 1.3%
Dr. S.N. Bhaskar(4) 68,756(8) *
Anthony E. Winston(4) 160,000(9) 1.9%
Mr. D. Brooks Cole(4) 135,000(10) 1.6%
Mr. Norman Usen(4) 198,762(11) 2.4%
All directors and
executive officers as
a group (10 persons)(12) 4,223,285 51.9%

- ----------------
* Represents less than 1%.

(1) None of the beneficial owners listed is a Selling Securityholder in the
Offering.

(2) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. A person is deemed
to be the beneficial owner of securities that can be acquired by such
person within 60 days from the date hereof upon the exercise of
warrants or options. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof have been exercise.

(3) Based on 8,142,749 shares of Common Stock issued and outstanding as of
August 1, 1997, which reflects the sale of 1,080,000 shares issued on
June 26, 1997 in the June Offering.

(4) The address of this person is c/o Enamelon, Inc., 15 Kimball Avenue,
Yonkers, NY 10704.

(5) Includes 36,348 shares held in trust for the benefit of Dr. Fox's minor
children. Also includes 450,000 shares issuable upon exercise of
currently exercisable stock options.

(6) Includes 25,253 shares issuable upon exercise of currently exercisable
stock options.

(7) Includes 9,375 shares issuable upon exercise of currently exercisable
warrants.

(8) Reflects 68,756 shares issuable upon exercise of currently exercisable
stock options.

(9) Reflects 160,000 shares issuable upon exercise of currently exercisable
stock options.

(10) Reflects 135,000 shares issuable upon exercise of currently exercisable
stock options.

(11) Reflects 198,762 shares issuable upon exercise of currently exercisable
stock options.

<PAGE>

(12) Includes 1,088,277 shares issuable upon exercise of currently
exercisable stock options and 9,375 shares issuable upon exercise of
currently exercisable warrants.

By virtue of his ownership of shares of Common Stock and position with
the Company, Dr. Steven R. Fox may be deemed a "parent" and a "founder" of the
Company as such terms are defined under the federal securities laws.

<PAGE>

SELLING SECURITYHOLDERS

The table below sets forth, with respect to each Selling
Securityholder, based upon information available to the Company as of the date
hereof, the number of shares of Common Stock beneficially owned or underlying
other securities beneficially owned, the number of shares to be sold; and the
number and percentage of outstanding Common Shares beneficially owned before and
after the sale of the Shares offered hereby. An aggregate 1,200,000 Shares are
being offered for the accounts of the Selling Securityholders. Although there
can be no assurance that the Selling Securityholders will sell any or all of the
Shares, the following table assumes that each of the Selling Stockholders will
sell all Shares offered by this Prospectus.

Amount and Shares
Nature Beneficially Percent of Class(3)
Beneficial Shares Owned -------------------
Ownership to Be After Before After
Name (1)(2) Sold(2) Offering Offering Offering
- ---- ------ ------- -------- -------- --------
<S> <C>
Allen & Company 162,888(5) 36,600 126,288 2.0% 1.5%
Incorporated

Ambit & Co. 50,000(4) 50,000 0 1.0% 0

Smith Barney FBO 127,500(9) 54,000 73,500 1.5% 1.0%
Wood Island Associates

SBSF Biotechnology 66,000(4) 66,000 0 1.0% 0
Fund, L.P.

Barry Diller 23,000(4) 23,000 0 - 0

Zweig-DiMenna Special 15,900(4) 15,900 0 - 0
Opportunities, L.P.

Zweig-DiMenna 61,800(4) 61,800 0 1.0% 0
International Ltd.

SC Fundamental Value 17,250(4) 17,250 0 - 0
Fund, L.P.

SC Fundamental Value 7,750(4) 7,750 0 - 0
BVI, Ltd.

Barbara Fromm 1,000(4) 1,000 0 - 0

Fromm Revocable Trust 30,000(4) 30,000 0 - 0

Froma, A Partnership 13,000(4) 13,000 0 - 0

Larry Flinn 38,400(4) 38,400 0 - 0

</TABLE>
40

<PAGE>

Gamma North Peel 56,250(6) 25,000 31,250 1.0% -
Laboratory Limited

Goldman Grandchildren 3,000(4) 3,000 0 - 0
Irrevocable Trust

Hare & Co. 200,000(4) 200,000 0 2.4% 0

Haussmann Holdings N.V. 13,900(4) 13,900 0 - 0

JLA Partners, Ltd. 10,000(4) 10,000 0 - 0

Maurice D. Kent 12,500(4) 12,500 0 - 0

Lawrence J. Kent 12,500(4) 12,500 0 - 0

Friends Fromm Institute 10,000(4) 10,000 0 - 0
for Life Long Learning

Huizenga Investments 50,000(4) 50,000 0 1.0% 0
Limited Partnership

Bernard Holdings 50,000(4) 50,000 0 1.0% 0
Limited Partnership

Maier Family Trust 13,000(7) 3,000 10,000 - -

Diana Maier Trust 2,000(4) 2,000 0 - 0

Michelle Maier Trust 2,000(4) 2,000 0 - 0

Arthur B. Modell 42,628(8) 10,000 32,628 1.0% 0

Network Fund III, Ltd. 83,000(4) 83,000 0 1.0% 0

Network IV LLC 30,000(4) 30,000 0 - 0

William P. O'Donell 2,000(4) 2,000 0 - 0

Kenneth F. Siebel 2,000(4) 2,000 0 - 0

</TABLE>

<PAGE>

Amount and
Nature Shares
Beneficially Percent of Class(3)
Beneficial Shares Owned -------------------
Ownership to Be After Before After
Name (1)(2) Sold(2) Offering Offering Offering
- ---- ------ ------- -------- --------- ---------
<S> <C>

Simon Community 3,000(4) 3,000 0 - 0
Property

Raifinanz AG 10,000(4) 10,000 0 - 0

JDK Partners 25,000(4) 25,000 0 - 0

SBSF Biotechnology 9,000(4) 9,000 0 - 0
Partners, L.P.

Maple Partners, Ltd. 10,000(4) 10,000 0 - 0

Westbury (Bermuda) Ltd. 100,000(4) 100,000 0 1.0% 0

Weyerhauser Company 7,400(4) 7,400 0 - 0
Master Retirement Trust

Whittier Opportunity Fund 50,000(4) 50,000 0 1.0% 0

Vange, LP 20,000(4) 20,000 0 - 0

Victor Ventures LLC 20,000(4) 20,000 0 - 0
- -------------------------
</TABLE>
* Represents less than 1%

(1) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. A person is deemed
to be the beneficial owner of securities that can be acquired by such
person within 60 days from the date hereof upon the exercise of
warrants or options. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof have been exercised.

(2) Includes shares of Common Stock issuable upon exercise of warrants and
options, but does not include fractional shares to be purchased by the
Company.

(3) Based on 8,142,749 shares of Common Stock issued and outstanding as of
August 1, 1997, which reflects the sale of 1,080,000 shares issued in
the June Offering.

(4) Represents shares acquired in the June Offering.

<PAGE>

(5) Includes 36,600 shares issued in the June Offering and 13,788 shares of
Common Stock, 112,500 Warrants issued in connection with a private
placement in January 1996.

(6) Includes 25,000 shares issued in the June Offering and 31,250 shares
issued in connection with a private placement in October 1995.

(7) Includes 3,000 shares issued in the June Offering and 10,000 shares
issued in connection with a private placement in December 1995.

(8) Includes 10,000 shares issued in the June Offering and 32,628 shares
issued in connection with a private placement in June 1993.

(9) Includes 54,000 shares issued in the June Offering and 73,500 shares of
Common Stock purchased in the open market.

CERTAIN TRANSACTIONS

The Company has subleased its office facilities in Yonkers, New York,
without a written agreement, since December 1, 1992, from Dr. Steven R. Fox, the
Chairman of the Board, at a rent of $600 per month. Commencing January 1, 1996
for a period of one year, the Company entered into a lease with a relative of
Dr. Fox for additional office facilities at a rent of $2,500 per month. Such
lease has been extended for a one year period ending December 1997. See
"Business -- Properties" for a description of such facilities. For information
concerning employment and consulting agreements with, and compensation of, the
Company's executive officers and directors, see "Management -- Executive
Compensation," "-- Employment and Consulting Agreements" and "-- Employee
Benefit Plans."

On June 26, 1997, the Company completed a private placement of
1,080,000 shares of Common Stock to accredited investors (the "June Offering")
for a total purchase price of $14,040,000. In connection with the June Offering,
the Company paid Allen & Company Incorporated a sales commission of 6% of the
aggregate proceeds of the June Placement.

The Company believes that the terms of each of the foregoing
transactions and those which will exist after the consummation of the Offering
are no less favorable to the Company than could have been obtained from
non-affiliated third parties, although no independent appraisals were obtained.
In the future, all transactions between the Company and its affiliates will also
be on terms which the Company believes will continue to be no less favorable to
the Company than the Company could obtain from non-affiliated parties.

DESCRIPTION OF SECURITIES

Common Stock

The Company is authorized to issue 20,000,000 shares of Common Stock,
$0.001 par value per share, of which 8,142,749 shares are currently outstanding
and held of record by approximately 314 holders. Holders of shares of Common
Stock are entitled to one vote for each share held of record on all matters to
be voted on by stockholders. There are no preemptive, subscription, conversion
or redemption rights pertaining to the shares of Common Stock. Holders of shares
of Common Stock are entitled to receive dividends when, as and if declared by
the Board of Directors from funds legally available therefor and to share
ratably in the assets of the Company available upon liquidation, dissolution or
winding up. The holders of shares of Common Stock do not have cumulative voting
rights for the election of directors and, accordingly, the holders of more than
50% of the shares of Common Stock are able to elect all directors. If the
officers and directors of the Company were to exercise all of their presently
exercisable warrants and options, they would control 51.9% of the votes and
would have the ability to affect the outcome of any election for directors or
votes on other matters presented to the Company's stockholders. All of the
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and non-assessable.

SHARES ELIGIBLE FOR FUTURE SALE

Of the 8,142,749 shares of Common Stock issued and outstanding,
1,700,000 were sold publicly in the Company's initial public offering,
approximately 338,684 shares have been sold publicly pursuant to Rule 144, and
1,200,000 shares may be sold publicly pursuant to the registration statement of
which this Prospectus is a part. The remaining 6,104,067 outstanding shares of
Common Stock are "restricted securities," as that term is defined in Rule 144,
and may only be sold pursuant to a registration statement under the Securities
Act or an applicable exemption from registration thereunder, including
exemptions provided by Rule 144. All of such shares are presently eligible for
resale under Rule 144. In addition, holders of 558,399 shares of Common Stock
and warrants to purchase 631,250 shares of Common Stock at prices ranging from
$3.60 to $5.75 per share have three demand registration rights exercisable until
October 24, 2001, and unlimited piggyback registration rights exercisable until
January 23, 2003 (subject to certain limitations), and holders of warrants to
purchase 170,000 shares of Common Stock at $8.40 per share have one demand
registration right exercisable after October 23, 1997, and unlimited piggyback
registration rights exercisable until October 29, 2001. Employees, consultants,
and other eligible holders of options to purchase approximately 1,198,431 shares
of Common Stock granted under the Company's 1993 Plan prior to the Company's
initial public offering also have the right to exercise their options and
immediately sell the shares of Common Stock received upon exercise under Rule
144. No prediction can be made as to the effect that future sales of Common
Stock, or the availability of shares of Common Stock for future sales, will have
on the market prices for the Common Stock prevailing from time to time. Sales of
substantial amounts of Common Stock, or the perception that such sales could
occur, could adversely affect prevailing market prices for the Common Stock, or
the perception that such sales could occur, could adversely affect prevailing
market prices for the Common Stock and could impair the Company's ability to
raise capital through the future sale of its equity securities. See "Principal
Stockholders" and "Risk Factors -- Shares Eligible for Future Sale."

<PAGE>

PLAN OF DISTRIBUTION

The Selling Securityholders are offering the Shares for their own
account and not for the account of the Company. The Shares may be sold from time
to time by the Selling Securityholders directly to purchasers or, alternatively,
may be offered from time to time through agents, brokers, dealers or
underwriters, who may receive compensation in the form of concessions or
commissions from the Selling Stockholders or purchasers of the Shares. Sales of
the Shares may be made in one or more transactions on the NASDAQ National Market
or in privately negotiated transactions or otherwise, and such sales may be made
at the market price prevailing at the time of sale, a price related to such
prevailing market price or a negotiated price.

Under the Exchange Act and the regulations thereunder, any person
engaged in a distribution of the shares of Common Stock of the Company offered
by this Prospectus may not simultaneously engage in market making activities
with respect to the Common Stock of the Company during the applicable "cooling
off" periods prior to the commencement of such distribution. In addition, and
without limiting the foregoing, the Selling Securityholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder including, without limitation, Regulation M, which provisions may
limit the timing of purchases and sales of Common Stock by the Selling
Securityholders.

To the extent required, the Company will use its best efforts to file,
during any period in which offers or sales are being made, one or more
supplements to this Prospectus to describe any material information with respect
to the plan of distribution not previously disclosed in this Prospectus.

INTERESTS OF NAMED EXPERTS AND COUNSEL

SBK Investment Partners, a partnership consisting of members of Snow
Becker Krauss P.C., counsel to the Company, owns 96,600 shares of Common Stock
and holds an option to purchase 32,628 shares of Common Stock.

EXPERTS

The financial statements included in this Prospectus have been audited
by BDO Seidman, LLP, independent certified public accountants, to the extent and
for the periods indicated in their report appearing elsewhere herein and are
included in reliance on such report given upon the authority of said firm as
experts in auditing and accounting.

<PAGE>

GLOSSARY

The following glossary is intended to provide the reader with an
explanation of certain terms used in this Prospectus.

Active Ingredient Element responsible for the therapeutic activity
of a product. However, other ingredients in the
product may enhance the effectiveness of the
active ingredient. In Enamelon toothpaste, the
active ingredient is sodium fluoride.

Calcium Important elemental constituent of teeth and bones.

Caries An oral disease caused by the presence of cariogenic
bacteria in plaque. Signs of the disease are lesions
and/or cavities in the teeth.

Cavity Area of the tooth where mineral loss, due to
demineralization, has been extensive, resulting in
collapse of the tooth structure. A cavity cannot be
remineralized and must be filled by a dentist.

Demineralization Chemical process whereby acids, produced by
cariogenic bacteria in plaque, dissolve and remove
calcium and phosphate from tooth enamel and/or
dentin, making the tooth weaker and more porous. If
allowed to continue, demineralization will eventually
cause the tooth structure to collapse and a cavity to
be formed.

Dentin An underlying tooth material that contains minerals
and organic matter. Dentin is covered by enamel in
the crown and cementum in the root.

Enamelon Technologies The ADAHF Patented Technology together with the
Enamelon Proprietary Technology as described in Item
1, "Description of Business".

Fluoride Inorganic form of the element fluorine in combination
with other elements.

Inactive Ingredient Element not responsible for the therapeutic activity
of the product. Inactive ingredients may be important
for other product attributes and may substantially
enhance the effectiveness of the active ingredient.

Interproximal Lesions Lesions that occur between the teeth.

In Vitro Literally means "in glass" (Latin) . Refers to
experimental studies carried out under laboratory
conditions that do not involve living species.

In Vivo Literally means "in life" (Latin). Refers to
experimentation performed on live animals or humans.

Ions Dissolved particles bearing a positive or negative
charge. Because of their charges, ions attract a

<PAGE>

sphere of water molecules around themselves, which
helps to keep them in solution.

Lesions Defects in teeth resulting from loss of tooth mineral
due to demineralization in localized areas of the
tooth. Lesions often, but not always, show up as
visible white or colored spots on teeth. They may or
not be detected by x-rays.

Phosphate Combination of the elements phosphorous and oxygen in
ionic form or part of an inorganic or organic
compound. An important constituent of teeth and
bones.

Plaque Soft sticky film formed on teeth and between teeth
due to eating sugar-containing foods. Contains a very
high concentration of bacteria.

Plaque Acids Acidic materials formed by the break-down of sugars
due to the action of plaque bacteria. Plaque acids,
primarily lactic and acetic acid, are highly
corrosive to the tooth mineral structure, and cause
demineralization of the tooth.

Professional Gels Therapeutic materials applied to the teeth for the
prevention, arrestment, or reversal of lesions or
cavities. Applied directly by a qualified dental
practitioner or supplied to the user through a
prescription supplied by a qualified dental
practitioner.

Remineralization Chemical process whereby calcium and phosphate, lost
during demineralization, are replaced into tooth
enamel and dentin, thereby rebuilding, restoring and
restrengthening the tooth.

Sodium Fluoride Compound consisting of the element sodium combined
with the element fluorine and which provides fluoride
ions when dissolved in water. Sodium fluoride is an
accepted active ingredient in anti- caries products
for over-the-counter use.

Tooth Enamel Outer hard mineral layer of the crown, which is the
part of the tooth that emerges from the gum.

<PAGE>

ENAMELON, INC.
(A DEVELOPMENT STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Audited)

Report of Independent
Certified Public Accountants..................................... F-2

Financial statements:

Balance sheets........................................... F-3

Statements of operations................................. F-4

Statements of stockholders' equity....................... F-5

Statements of cash flows................................. F-6

Notes to the financial statements........................ F-7- F-17

THREE MONTHS ENDED MARCH 31, 1996 and 1997
(Unaudited)

Financial statements:

Balance sheets........................................... F-18

Statements of operations................................. F-19

Statements of stockholders' equity....................... F-20

Statements of cash flows................................. F-21

Notes to financial statements............................ F-22-F-23

F-1

<PAGE>

REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

Enamelon, Inc.
Yonkers, New York

We have audited the accompanying balance sheets of Enamelon, Inc. (A
Development Stage Company) as of December 31, 1996 and 1995, and the related
statements of operations, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1996 and for the period from June
9, 1992 (inception) to December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Enamelon, Inc. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1996 and for the
period from June 9, 1992 (inception) to December 31, 1996, in conformity with
generally accepted accounting principles.

BDO Seidman, LLP
New York, New York
February 11, 1997

F-2

<PAGE>

ENAMELON, INC.
(A development stage company)
Balance Sheets

December 31,
1995 1996
Assets ------ -----
<S> <C>
Current:
Cash and cash equivalents (Note 1).................................. $ 1,790,666 $11,389,894
Prepaid expenses and other assets................................... 11,077 193,290
Inventory .................................................... -- 53,183
-----------
Total current assets.............................................. 1,801,743 11,636,367

Equipment, net (Note 1 and 2)....................................... 58,077 438,348

Deferred costs, net (Note 1 and 3).................................. 172,157 308,030

Other assets ....................................................... 8,939 8,939
----------- -----------

Total assets..................................................... $ 2,040,916 $12,391,684
----------- -----------

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable.................................................... $ -- $ 553,377
Accrued expenses.................................................... 173,939 539,894
----------- -----------
Total current liabilities......................................... 173,939 1,093,271
----------- -----------

Commitments (Notes 6 and 7)

Stockholders' Equity (Note 4):
Preferred stock, $0.01 par value - shares...........................
authorized 4,172,750 none issued or outstanding -- --
Common stock, $0.001 par value - shares
authorized 20,000,000; issued
and outstanding 4,635,273 and 6,900,378........................... 4,635 6,900
Additional paid-in capital.......................................... 4,055,925 16,409,926
Accumulated deficit during the development stage.................... (2,193,583) (5,118,413)
----------- -----------
Total stockholders' equity........................................ 1,866,977 11,298,413
----------- -----------

Total liabilities and stockholders equity......................... $ 2,040,916 $12,391,684
----------- -----------

</TABLE>

See accompanying notes to financial statements.

F-3

<PAGE>

ENAMELON, INC.
(A development stage company)
Statements of Operations

<TABLE>
<CAPTION>
Period from
June 9, 1992
(Inception) to
Year ended December 31, December 31,
---------------------------------- ------------
1994 1995 1996 1996
---- ---- ---- ----
<S> <C>
Expenses:
Marketing and selling............... -- $ -- $ 362,371 $362,371
Research and testing................ 206,126 546,994 1,761,718 2,631,305
Administrative and other............ 330,154 533,587 996,160 2,091,000
------- ----------- ----------- ---------
Total expenses.................... 536,280 1,080,581 3,120,249

Other charges (income):
Interest and dividends.............. 7,325 (19,663) (195,419) (236,232)
Write-off of deferred
offering costs (Note 1)............. 269,969 269,969
-------- ---------- -------
Net loss .................... (798,924) $(1,060,918) $(2,924,830) $(5,118,413)
======== =========== =========== ===========

Pro forma net loss per
common share (Note 1)................ $(.21) $ (0.20) $ (0.52)
----------- -----------

Weighted average common
shares outstanding................... 3,784,800 5,234,289 5,636,935
--------- ----------- -----------
</TABLE>
See accompanying notes to financial statements.

F-4

<PAGE>

Enamelon, Inc.
(A development company)
Statement of Stockholders' Equity (Note 4)

Common Stock Additional Accumulated Total
------------ paid-in deficit during the stockholders'
Shares Par value capital development stage equity
--------- --------- ----------- ----------------- ------------
<S> <C>
Issuance of common stock in June and December 1992......... 3,331,458 $3,331 $ 111,684 $ -- $ 115,015
Issuance of common stock for legal services rendered....... 9,792 10 29,960 -- 29,970
Net loss................................................... -- -- -- (37,070) (37,070)
------------------------------------- -------------- ----------

Balance, December 31, 1992................................. 3,341,250 3,341 141,644 (37,070) 107,915
Issuance of common stock at $3.06 per share in
private placement, net of costs 293,619 294 868,648 -- 868,942
Issuance of common stock for
legal services rendered................................. 17,268 17 63,348 -- 63,365
Net loss................................................... -- -- -- (296,671) (296,671)
-------------------------------------- ----------- ---------
Balance, December 31, 1993................................. 3,652,137 3,652 1,073,640 (333,741) 743,551
Issuance of common stock at $1.33
per share in private placement, net of costs 118,125 118 141,783 -- 141,901
Issuance of common stock for
legal services rendered................................. 14,538 15 63,985 -- 64,000
Net loss................................................... -- -- -- (798,924) (798,924)
------------------------------------ ----------- ---------

Balance, December 31, 1994................................. 3,784,800 3,785 1,279,408 (1,132,665) 150,528
Issuance of common stock at $1.33
per share in private placement, net of costs 93,750 94 124,906 -- 125,000
Issuance of common stock at $4.00
per share in private placement, net of costs 648,723 648 2,504,024 -- 2,504,672
Issuance of common stock for legal services rendered....... 108,000 108 147,587 -- 147,695
Net loss................................................... -- -- -- (1,060,918) (1,060,918)
------------------------------------- ------------ ----------

Balance, December 31, 1995................................. 4,635,273 4,635 4,055,925 (2,193,583) 1,866,977
Issuance of common stock for legal services rendered....... 6,706 7 26,817 -- 26,824
Issuance of common stock in public offering, net of costs.. 1,700,000 1,700 10,423,572 -- 10,425,272
Conversion of preferred stock to common stock.............. 558,399 558 1,903,442 -- 1,904,000
Warrants exercised......................................... -- -- 170 -- 170
Net loss................................................... -- -- -- (2,924,830) (2,924,830)
------------------------------------- ------------ -----------

Balance, December 31, 1996................................. 6,900,378 $6,900 $16,409,926 $(5,118,413) $ 11,298,413
--------- ------ ----------- ------------ -----------
</TABLE>

See accompanying notes to financial statements.

F-5

<PAGE>

ENAMELON, INC.
(A development stage company)
Statements of Cash Flow
<TABLE>
<CAPTION>
Period from
June 9, 1992
(Inception) to
Year ended December 31, December 31,
1994 1995 1996 1996
---- ---- ---- ----
<S> <C>
Cash flows from operating activities:

Net loss ............................................... $ (798,924) $ (1,060,918) $ (2,924,830) $ (5,118,413)
Adjustments to reconcile net loss to net cash used
in operating activities:
Write-off of deferred offering costs ................. 269,969 -- -- 269,969
Stock issued for services ............................ -- 147,695 26,824 174,519
Depreciation and amortization ........................ 15,433 23,490 45,488 89,257
Increase in prepaid expenses and other assets ........ (7,896) (2,203) (182,213) (202,228)
Increase in inventory ................................ -- -- (53,183) (53,183)
Increase in deferred costs ........................... -- -- -- (1,133)
Increase in accrued expenses and account payable ..... 63,633 59,287 616,078 788,017
------------ ------------ ------------ ------------
Net cash used in operating activities .............. (457,785) (832,649) (2,471,836) (4,053,195)
------------ ------------ ------------ ------------

Cash flows from investing activities:
Purchases of equipment ............................... (39,559) (28,949) (411,056) (489,678)
Patents, trademarks and licenses ..................... (35,700) (27,505) (150,575) (298,181)
------------ ------------ ------------ ------------
Net cash used in investing activities .............. (75,266) (56,454) (561,631) (787,859)
------------ ------------ ------------ ------------

Cash flows from financing activities:
Proceeds from sale of common stock ................... 141,901 2,718,459 11,900,000 15,744,317
Proceeds from sale of preferred stock ................ -- -- 2,025,000 3,025,000
Offering costs ....................................... (75,520) (88,787) (1,292,305) (1,538,369)
------------- ------------ ------------ ------------
Net cash provided by financing activities .......... 66,381 2,629,672 12,632,695 16,230,948
------------ ------------ ------------ ------------

Net increase in cash and cash equivalents ................ (466,670) 1,740,569 9,599,228 11,389,894
Cash and cash equivalents, beginning of period ........... 516,767 50,097 1,790,666 --
------------ ------------ ------------ ------------
Cash and cash equivalents, end of period ................. $ 50,097 $ 1,790,666 $ 11,389,894 $ 11,389,894
============ ============ ============ ============

Supplemental disclosures of noncash financing activities:
The Company issued common stock for professional
services performed by unrelated parties............$ 64,000 $ 147,695 $ 26,824 $ 331,854
============ ============ ============ ============
Accrued offering cost ................................ -- -- $ 282,423 --
============ ============ ============ ============
</TABLE>

F-6

<PAGE>

ENAMELON, INC.
(A development stage company)

Notes to Financial Statements

1. Organization and Summary of Accounting Policies

Organization

The Company (a development stage company) was founded in June 1992 to
develop and market over-the-counter oral care products that prevent tooth decay
at its earliest stage and are based on proprietary formulations and
technologies. To date, the Company has not commenced any product
commercialization or realized any operating revenues.

The Company completed formulation of its all-family toothpaste and the
testing required by the monograph published by the Food and Drug Administration
during 1996. The Company intends to begin in the early part of 1997 to test
market Enamelon(TM) toothpaste in several representative markets comprising
approximately 5% of all United States households. Test marketing and additional
clinical human studies to establish additional marketing claims for consumers
and dentists are expected to continue throughout 1997, with a national roll-out
of Enamelon(TM) toothpaste in the first half of 1998. The Company expects to
continue to incur operating losses throughout this period and may require
additional financing to continue its operations thereafter.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts of cash, prepaid expenses and accrued expenses
approximate fair value because of the short maturity of these items.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of highly liquid debt
instruments with original maturities of three months or less, principally
Treasury Bills and money market accounts.

Equipment

Equipment is stated at cost. Depreciation is computed over the
estimated useful lives of the assets using the straight-line method.

Deferred Costs

Organization costs are amortized using the straight-line method over a
sixty-month period.

Licensing costs and patent rights are amortized using the straight-line
method over seventeen years, which is the term of the licensing agreements and
the estimated useful lives of the patents, respectively.

F-7

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

Trademarks are being amortized using the straight-line method over
seventeen years.

Deferred offering costs related to a proposed private placement had
been deferred until the proceeds of the private placement were raised. Since the
related private placement transaction did not occur as expected, these costs
were expensed in 1994.

Income Taxes

Income taxes are computed in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"), which requires, among other things, a liability approach to
calculating deferred income taxes. SFAS 109 requires a company to recognize
deferred tax liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
Deferred tax assets must be reduced by a valuation allowance to amounts expected
to be realized.

Earnings Per Share

Earnings per share are presented for 1995 and 1996 on a pro forma basis
to give retroactive effect to the conversion of the redeemable preferred stock
as a result of the public offering discussed in Note 4. The calculation of
earnings per share reflects the conversion of the preferred stock as if it
occurred on January 1, 1995.

The weighted average number of common shares outstanding used in
computing the net loss per common share for the year ended December 31, 1996 was
adjusted for the effects of the application of Securities and Commission (SEC)
Staff Accounting Bulletin (SAB) No. 83. Pursuant to SAB No. 83, common stock
issued by the Company at a price less than the initial public offering price
during the twelve months immediately preceding the initial filing of the
offering together with common stock purchase warrants and options issued during
such period with an exercise price less than the initial public offering price,
are treated as outstanding for all periods presented. Earnings (loss) per share
are computed using a treasury stock method, under which the number of shares
outstanding reflects an assumed use of the proceeds from the issuance of such
shares and from the assumed exercise of such warrants and options, to repurchase
shares of the Company's common stock at the average market price outstanding
since the initial public offering.

Recent Accounting Standards

In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of," which requires that certain long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicated that the carrying amount
may not be recoverable. The adoption of this pronouncement in 1996 did not have
a significant effect on the Company's financial statements.

F-8

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

In October 1995, the Financial Accounting Standards Board issued SFAS
No. 123, "Accounting for Stock-Based Compensation," which allows the choice of
either the intrinsic value method or the fair value method of accounting for
employee stock options. The Company has selected the option to continue the use
of the current intrinsic value method.

Presentation of Prior Year Data

Certain reclassifications have been made to conform prior year data
with the current presentation.

2. Equipment
<TABLE>
<CAPTION>

Equipment is summarized as December 31, Estimated Useful Life
follows:
<S> <C>

1995 1996
---- ----

Furniture and fixtures $ 6,691 $ 27,334 5 - 7 years
Equipment 71,931 462,344 3 - 10 years
------- --------
78,622
489,678
Less: Accumulated 20,545 51,330
depreciation ------- --------

$ 58,077 $ 438,348
======== =========

</TABLE>
3. Deferred Costs

Deferred costs are summlows:

December 31,

1995 1996
---- ----
Patent rights $ 132,207 $ 256,557
Trademarks 43,082 67,840
Licensing costs 18,962 18,962
Organization cost 1,133 2,600
------ --------
195,384 345,959
Less: Accumulated
amortization 23,227 37,929
------- ----------
$ 172,157 $ 308,030
========= ==========

4. Stockholders' Equity

Redeemable Preferred Stock

In January 1996, the Company issued 500,000 units at $4.00 per unit, each
consisting of 1.103 shares of 5% convertible Series A preferred stock and 1
common stock purchase warrant, exercisable at $5.75 per share. In April
1996, the Company issued an additional 6,250 units at $4.00 per unit. The

F-9

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

Company received proceeds of $2,025,000 for these issuances. In October
1996, the 558,399 shares of Series A Preferred Stock were converted into
common stock and retired upon the consummation of the initial public
offering.

In connection with the placement of the transaction, the Company issued
warrants to purchase 100,000 shares at an exercise price of $4.80 and
23,750 shares at $3.60 per share, which expire January 23, 2003.

Common Stock

In November 1992, the Board of Directors amended the Company's Certificate
of Incorporation to increase the number of authorized common shares from
15,000 shares to 3,000,000 shares and effected a 100-for-one stock split.
The Company effectuated a 1.19688-for-one stock split of its common stock
in July 1993, a one-for-1.65068 reverse stock split of its common stock in
September 1994 and a three-for-one stock split in June 1995. All common
shares, common stock options and price per share information disclosed in
the financial statements and notes thereto have been adjusted to give
retroactive effect for these stock splits. The Board of Directors amended
the Company's Certificate of Incorporation to increase the Company's
authorized shares of common stock from 3,000,000 to 20,000,000.

In December 1992, 9,792 shares of stock were issued for services performed
by unrelated parties. In September 1993, November 1993 and January 1994, an
additional 4,545 share, 12,723 shares and 14,538 shares, respectively, were
issued for services performed by unrelated parties. In May and June 1995,
an additional 105,000 shares and 3,000 shares, respectively, were issued
for services performed by unrelated parties. In January 1996, an additional
6,706 shares were issued for services performed by unrelated parties.
Common stock issued for services was valued at the estimated fair value of
the stock issued.

In January 1993, the Company issued an aggregate 293,619 shares of its
common stock to private investors, officers and directors of the Company
for the aggregate consideration of $900,000.

In September 1994, the Company sold 118,125 shares of common stock and
warrants to purchase 59,064 shares of common stock at an exercise price of
$1.33 per share for an aggregate amount of $157,500.

In May 1995, the Company issued an aggregate 93,750 shares of its common
stock and warrants to purchase 93,750 shares of common stock at an exercise
price of $1.33 per share to private investors, officers and directors of
the Company for an aggregate consideration of $125,000.

On various dates through December 31, 1995, the Company issued an aggregate
648,723 shares of its common stock pursuant to a private placement
memorandum dated June 20, 1995 to private investors, officers and directors
of the

F-10

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

Company for an aggregate consideration of $2,504,672, net of expenses. In
connection with the private placement, the Company authorized the issuance
of warrants to purchase 26,276 shares of common stock at an exercise price
of $4.00 per share, and 1,562 shares of common stock at an exercise price
of $3.60 per share, which expire December 14, 2000, to representatives in
the offering.

Initial Public Offering

In October 1996, the Company completed the initial public offering of
1,700,000 shares of common stock at $7.00 per share. Cash proceeds net of
costs was $10,425,000. Concurrent with the public offering, 558,399 shares
of redeemable preferred stock were automatically converted into an
equivalent number of shares of common stock.

Stock Option Plan

In 1993, the Company adopted the 1993 Stock Option Plan (the "Option
Plan"). The Option Plan provides for the grant of options to qualified
employees (including officers and directors) of the Company to purchase an
aggregate of 1,500,000 shares of common stock. The Option Plan is
administered by the Board of Directors or a committee of the Board of
Directors (the "Compensation Committee") whose members are not entitled to
receive options under the Option Plan (excluding options granted
exclusively for directors' fees). Options granted under the Plan may or may
not be "incentive stock options" as defined in the Internal Revenue Code
("Incentive Options") depending upon the terms established by the
Compensation Committee at the time of grant. The exercise price shall not
be less than the fair market value of the Company's common stock as of the
date of grant (110% of the fair market value if the grant is an Incentive
Option to an employee who owns more than 10% of the Company's outstanding
common stock). Options granted under the Plan are subject to a maximum term
of 10 years.

SFAS No. 123, Accounting for Stock-Based Compensation, requires the Company
to provide pro forma information regarding net income and earnings per
share as if compensation cost for the Company's stock option plans had been
determined in accordance with the fair value based method prescribed in
SFAS No. 123. The Company estimates the fair value of each stock option at
the grant date by using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants during the period
from January 1, 1995 to October 24, 1996 ("pre IPO"), and October 25, 1996
to December 31, 1996 ("post IPO"), respectively; no dividend yield for both
years; expected volatility of .01 and 35 percent; risk-free interest rates
of 6.5 and 6.2 percent and expected lives of 6.3 and 6.8 years for the
options.

Under the accounting provisions of SFAS No. 123, the Company's net loss and
loss per share would have been reduced to the pro forma amounts indicated
below:

F-11

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

1995 1996
---- ----
<S> <C>
Net loss
As reported $1,060,918 $2,924,830
Pro forma $1,735,766 $3,365,581

Loss per share
As reported $(0.20) $(0.52)
Pro forma $(0.33) $(0.60)
</TABLE>

A summary of activity for the Company's Plan, including those
options granted pursuant to the terms of certain employment and other
agreements (see Note 7), is as follows:
<TABLE>
<CAPTION>

Weighted average
Option shares Exercise price
------------- --------------
<S> <C>
Balance, January 1, 1995 380,487 $3.02
Granted 937,081 2.35
Exercised -- --
Canceled ( 108,762) 3.37
---------- ----
Balance, December 31, 1995 1,208,806 2.50
Granted 160,000 6.51
Exercised -- --
Canceled -- --
---------- ----
Balance, December 31, 1996 1,368,806 $2.97
========== =====

</TABLE>

December 31,

1995 1996
---- ----
Options exercisable 1,148,806 1,192,806
Weighted average exercise price
of options exercisable $2.56 $2.57
Weighted average fair value of $674,848 $440,751
options granted during the
year

The following table summarized information about fixed stock
options outstanding at December 31, 1996:

F-12

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------- -------------------

Weighted-
Average Weighted- Weighted-
Number Remaining Average Number Average
Range of Outstanding Contractual Exercise Exercisable Exercise
Exercise Prices at 12/31/96 Life Price at 12/31/96 Price
--------------- ----------- ------ ------- ----------- ------
<S> <C>
$1.33 to $2.67 405,213 6.2 $1.37 375,213 $1.38
$3.00 to $4.00 803,593 3.1 $3.07 803,593 $3.07
$5.81 to $7.00 160,000 7.5 $6.51 14,000 $6.25
---------- ---------
$1.33 to $7.00 1,368,806 4.6 $2.97 1,192,806 $2.57
========== =========
</TABLE>

5. Income Taxes

At December 31, 1996, the Company had a deferred tax asset of approximately
$2,047,000 primarily attributable to net operating loss carryforwards. The
deferred tax asset has been fully reserved by a valuation allowance of the
same amount.

The net operating loss carryforwards at December 31, 1996 totaling
approximately $5,118,000 will expire if not used by the period from 2007
through 2011 and may be limited by United States federal tax law as a
result of future changes in ownership.

6. Commitments

Leases

The Company leases office facilities in New York from a related party and
laboratory facilities in New Jersey. The lease for the laboratory
facilities includes provisions requiring the Company to pay a proportionate
share of the increase in real estate taxes and operating expenses over base
period amounts. The minimum rents for the leased property for the
subsequent years are as follows:

Year ending December 31,

1997 $ 79,000
1998 52,000
------------
$ 131,000
============

Rent expense for the years ended December 31, 1995 and 1996 was $35,500 and
$83,028 respectively, and $160,483 for the period from June 9, 1992
(inception) to December 1996.

Patent License Agreements

In June 1992, the Company entered into a patent licensing agreement with
the ADAHF, the holder and/or the applicant for the patents for the
Amorphous Calcium Compounds ("ACC"). The agreement, as modified, grants the
Company

F-13
<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

the exclusive United States license to manufacture and sell dentifrices,
chewing gum, food and confection formulated according to the patented
process in return for royalty payments to the licensor. In November 1992,
the Company entered into an exclusive international patent licensing
agreement which, as modified, granted the Company patent license rights in
Austria, Belgium, Canada, China, Denmark, France, Germany, Greece, Ireland,
Italy, Japan, Luxembourg, Monaco, the Netherlands, Portugal, Spain, Sweden,
Switzerland, Liechtenstein, Taiwan and the United Kingdom. The grants
extend to improvements in patent compounds and utilities in dentifrices,
chewing gum, food and confectionery products developed by the ADAHF.

The exclusive United States license has been granted for an initial term
from the date of the agreement until three years following the physical and
chemical stabilization of the formula in a commercially viable product and
following the first Food and Drug Administration ("FDA") approval necessary
to market any ACC products in their commercially viable form to
professionals or the general public. The foreign license expires upon the
earlier of the termination of the United States license or the expiration
of the foreign patents license thereunder. The licenses are renewable in
four year increments for the life of the ACC patents subject to minimum
royalty payment terms, and transferable under certain conditions with the
prior written consent of the licensor, which consent may not be
unreasonably withheld. The licenses are subject to cancellation in the
event the Company fails to comply with its terms and conditions, including
payment of royalties and other amounts due thereunder.

The Company was also granted an option and right of first refusal, as
amended, for a limited license under future patents and patent applications
for ACC for all territories not included within the licensed territories
under the foreign patent license, with respect to dentifrices, chewing gum,
food and confection. Before granting such a license to third parties, the
ADAHF must first offer the license to the Company on the terms consistent
with the foreign license agreement. To the extent the ADAHF has not granted
the license to a third party due to the Company's failure to exercise its
right of first refusal, the Company has the option to receive a license in
any of such territories with the terms consistent with the foreign license
agreement.

In consideration for the grant of the exclusive United States license, the
Company is required to make royalty payments of four percent of net sales,
subject to minimum royalty payments of $7,000. In consideration for the
grant of foreign patent rights, the Company is required to pay seven
percent of net sales and four percent in a joint venture and bear the costs
of prosecution of foreign patent applications. However, to the extent the
ADAHF grants a foreign license to a third party to use ACC in products
other than dentifrices, chewing gum, food and confection, then such third
party must share with the Company the costs associated with the foreign
patent applications. If the Company sublicenses a foreign patent, it will
pay to the ADAHF twenty-five percent of the gross income resulting from
such sublicenses actually received by the Company.

7. Employment and Consulting Agreements

The Company has established a five-year incentive compensation program
(the "Incentive Compensation Program") for certain of its officers and key
employees. The Incentive Compensation Program provides for the establishment of
a yearly pool, equal to 5% of the Company's net income before expenses pursuant
to the Incentive Compensation Program, taxes and extraordinary items ("Plan Net
Income"). Such pool shall only be established in the event that the Company's
Plan Net Income equals or exceeds by at lease 5% the Company's Plan Net Income
for the prior fiscal year.

The Company has entered into a five-year employment agreement for the
services of a Chairman of the Board of Directors and Chief Executive Officer
commencing January 1, 1994. The agreement, as amended, provides for an annual
salary of $175,000 in 1996 and $250,000 per year in January 1997, subject to
adjustment, as well as 50% of all amounts allocated by the Board of Directors to
the Company's Incentive Compensation Program. The Company has granted this
officer an option to purchase 450,000 shares of common stock at an exercise
price of $3.00 per share, which expires five years from the date of grant.

F-14

<PAGE>

ENAMELON, INC.
(a development stage company)
Notes to Financial Statements
- continued -

The Company entered into an employment agreement for the services of a
President and Chief Operating Officer which provides for an annual salary of
$150,000 in 1996 and $175,000 in 1997, subject to adjustment, as well as 15% of
all amounts allocated by the Board of Directors to the Company's Incentive
Compensation Program. In addition, in 1996 the Company granted this individual
an option to purchase 99,000 shares of common stock at an exercise price of
$3.00 per share which expires seven years from the date of grant.

In May 1995, the Company entered into a three-year employment agreement
for the services of a Vice President - Product Development and Operations and
Secretary. This agreement, which replaced a prior consulting agreement (the
"Consulting Agreement"), provides for annual compensation of $105,000 in the
first year, $115,000 in the second year and $125,000 in the third year, subject
to adjustment, as well as 12.5% of all amounts allocated by the Board of
Directors to the Company's Incentive Compensation Program. In addition, options
to purchase 108,762 shares of common stock at various exercise prices previously
granted to the individual pursuant to the Consultanting Agreement were canceled
and regranted to the officer at an exercise price of $1.33 per share.
Furthermore, the Company has granted this individual an option to purchase an
additional 90,000 shares of common stock at an exercise price of $1.33 per share
which expires seven years from the date of grant.

The Company has entered into a an employment agreement for a term of
three years expiring January 2000, for the services of a Vice President of
Technology and Clinical Research. The agreement as amended provides for an
annual salary of $143,000 in 1997, $151,000 in 1998 and $160,00 in 1999, as well
as 10% of all amounts allocated by the Board of Directors to the Company's
Incentive Compensation Program. In addition, the Company has granted this
individual an option to purchase 150,000 shares of common stock at an exercise
price of $1.33 per share, which expires ten years from the date of grant.

The Company has entered into an employment agreement commencing August
1996 for the services of a Vice President and Chief Financial Officer. The
agreement provides for an annual salary of $89,000, subject to adjustment, as
well as not less than 5% of all amounts allocated by the Board of Directors to
the Company's Incentive Compensation Program. In addition, the Company has
granted this individual an option to purchase 25,000 shares of the Company's
common stock subject to certain vesting provisions at an exercise price of $7.00
per share.

F-15

<PAGE>

Enamelon, Inc.
(A development stage company)
Balance Sheet
(unaudited)

Assets March 31, 1997
--------------
<S> <C>
Current:
Cash and cash equivalents .............................................. $ 9,324,317
Prepaid expenses and other assets . .................................... 110,149
Inventory............................................................... 200,126
-----------
Total currents assets................................................... 9,634,592

Equipment, less accumulated depreciation of
$62,079................................................................. 981,889

Deferred costs, less accumulated amortization of
$43,277................................................................. 325,603

Other assets - security deposits........................................ 9,023
-----------

Total assets............................................................ $10,951,107
-----------

Liabilities and Stockholders' Equity
Current liabilities:
Account Payable......................................................... $ 871,018
Accrued expenses........................................................ 731,046
-----------
Total current liabilities............................................... 1,602,064
-----------

Commitments

Stockholders' equity (note 2) Preferred stock, $0.01 par value - shares
authorized 4,172,750; none issued or outstanding Common stock, $0.001 par value
- - shares authorized 20,000,000;issued and
outstanding and 6,900,378............................................... 6,900
Additional paid-in capital.............................................. 16,409,926
Accumulated deficit during the development stage........................
........................................................................
........................................................................ (7,067,783)
-----------
Total stockholders' equity.............................................. 9,349,043
-----------

Total liabilities and stockholders' equity.............................. $10,951,107
-----------
</TABLE>

See accompanying notes to financial statements.

F-16

<PAGE>

Enamelon, Inc.
(A development stage company)
Statement of Operations
(Unaudited)

Three Months Ended Period from
March 31 June 9, 1992
--------------------- (Inception)
to March 31,
1997 1996 1997
------- ---- --------
<S> <C>
Expenses:
Marketing and selling $ 853,018 $ 4,000 $1,215,389
Research and development 746,056 473,182 3,376,702
Administrative and other.. 481,252 75,025 2,572,911
----------- -------- -----------

Total expenses.. 2,080,326 552,207 7,165,002

Other charges (income):
Interest and dividends (130,956) (35,435) (367,188)
Write-off of deferred
offering costs. -- -- 269,969
----------- --------- -----------
Net loss $(1,949,370) $(516,772) $(7,067,783)
----------- --------- -----------

Pro forma net loss per
common share (note 2) $ (0.28) $ (0.09)
------- ---------

Weighted average common
shares outstanding 6,900,378 5,563,389
---------- ----------
</TABLE>

See accompanying notes to financial statements.

F-17

<PAGE>

Enamelon, Inc.
(A development stage company)
Statements of Stockholders' Equity
(unaudited)

<TABLE>
<CAPTION>
Accumulated
Common Stock Additional deficit during the Total
------------ paid-in development stockholders'
Shares Par value capital stage equity
<S> <C>

Balance, December 31,1996 6,900,378 $ 6,900 $ 16,409,926 $ (5,118,413) $11,298,413
Net loss -- -- -- (1,949,370) (1,949,370)
------------- ------------ -------------- ------------- ------------------

Balance, March 31, 1997 6,900,378 $ 6,900 $ 16,409,926 $ (7,067,783) $ 9,349,043
----------- --------------- ------------ --------------------
</TABLE>

See accompanying notes to financial statements.

F-18

<PAGE>

Enamelon, Inc.
(A development stage company)
Statements of Cash Flows
(unaudited)

Period from
June 9, 1992
(Inception) to
Three Months ended March 31, March 31,
1997 1996 1997 1997
------------------- ---------- --------------------
<S> <C>
Cash flows from operating activities:
Net loss.............................................. $(1,949,370) $ (516,772) $(7,067,783)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Write-off of deferred offering costs.................. -- -- 269,969
Stock issued for services............................. -- 26,824 174,519
Depreciation and amortization......................... 16,097 8,863 105,354
Change in operating assets and liabilities:
Decrease (increase) in prepaid expenses and
other assets........................................ 83,057 (832) (119,171)
Increase in inventory................................. (146,943) (200,126)
Increase in accrued expenses and
account payable..................................... 631,216 95,491 1,418,100
----------- ---------- -----------
Net cash used in operating activities................. (1,365,943) (386,426) (5,419,138)
----------- ---------- -----------

Cash flows from investing activities:
Purchases of equipment................................ (554,290) (71,378) (1,043,968)
Patents, trademarks and licenses...................... (22,921) (31,772) (321,102)
----------- ------- -----------
Net cash used in investing activities................. (577,211) (103,150) (1,365,070)
----------- ---------- -----------

Cash flows from financing activities:
Proceeds from sale of common stock.................... -- -- 15,744,317
Proceeds from sale of preferred stock................. -- 1,979,000 2,025,000
Offering costs........................................ (122,423) (265,000) (1,660,792)
----------- ---------- -----------
Net cash provided by financing
activities.......................................... (122,423) 1,714,000 16,108,525
----------- ---------- -----------

Net increase (decrease) in cash and
cash equivalents.................................... (2,065,577) 1,224,424 9,324,317
Cash and cash equivalents,
beginning of period................................. 11,389,894 1,790,666 --
----------- ---------- -----------
Cash and cash equivalents,
end of period....................................... $ 9,324,317 $3,015,090 $ 9,324,317
----------- ---------- -----------

Supplemental disclosures of
noncash financing activities:
The Company issued common stock for
professional services performed by
unrelated parties................................... $ -- $ 26,824 $ 331,854
----------- ---------- -----------

</TABLE>

See accompanying notes to financial statements.

F-19

<PAGE>

Enamelon, Inc.
(A development stage company)
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)

1. Statement of information furnished

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 210 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation have been included.
Results for the interim period ended March 31, 1997 are not necessarily
indicative of results for the entire year.

For further information, refer to the annual financial statements and
footnotes thereto included elsewhere herein.

2. Amounts per share

Net loss per share is presented for the three months ended March 31,
1996 on a pro forma basis to give effect to the conversion of the redeemable
preferred stock as a result of the public offering consummated in October 1996.
The calculation of net loss per share reflects the conversion of the preferred
stock as if it occurred on January 1, 1996.

The weighted average number of common shares outstanding used in
computing the pro forma net loss per common share was adjusted for the effects
of the application of Securities and Exchange Commission (SEC) Staff Accounting
Bulletin (SAB) No.83. Pursuant to SAB No. 83, common stock issued by the Company
at a price less than the initial public offering price during the twelve months
immediately preceding the initial public offering, together with common stock
purchase warrants and options issued during such period with an exercise price
less than the initial public offering price, are treated as outstanding for all
periods presented. Earnings (loss) per share are computed using the treasury
stock method, under which the number of shares outstanding reflects an assumed
use of the proceeds from the issuance of such shares and from the assumed
exercise of such warrants and options, to repurchase shares of the Company's
common stock at the initial public offering price.

3. Inventory is summarized as follows:

March 31, 1997

Raw materials $ 89,842
Work in process 10,350
Finished goods 99,934
----------
$200,126
----------

Inventories are valued at the cost of materials and contract
manufacturing by the first-in, first-out method.

F-20

<PAGE>

4. Effect of New Accounting Pronouncement

In February 1997, the FASB issued SFAS No. 128 "Earning Per Share". In
accordance with this statement, basic earnings per share are based on the
weighted average shares outstanding during the period and diluted earnings per
share are based on the weighted average number of common shares and all dilutive
potential common shares that were outstanding during the period. In addition,
prior period financial statements have to be restated to reflect the change in
accounting principle. Effective December 15, 1997, the Company will adopt this
statement. The effect of the adoption will not have a material impact on the
Company's net loss per share previously reported.

F-21

<PAGE>

No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
or incorporated by reference into the Prospectus and, if given or made, such
other information and representations must not be relied upon as having been
authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the securities to which it relates or any offer to sell or
the solicitation of an offer to buy such securities in any circumstances in
which such offer or solicitation is unlawful. Subject to any duties and
obligations under applicable securities laws to update information contained or
incorporated by reference herein, neither the delivery of this Prospectus nor
any sales made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
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TABLE OF CONTENTS
PAGE

Available Information................................. 2
Prospectus Summary.................................... 3
Risk Factors.......................................... 6
Use of Proceeds....................................... 13
Dividend Policy....................................... 13
Capitalization........................................ 13
Market for Common Equity and
Related Stockholder Matters...................... 13
Selected Financial Data............................... 14
Management's Discussion and
Analysis of Financial Condition
and Results of Operations......................... 15
Business.............................................. 18
Management............................................ 30
Principal Securityholders............................. 37
Selling Securityholders............................... 40
Certain Transactions.................................. 42
Description of Securities............................. 43
Shares Eligible for Future Sale....................... 43
Plan of Distribution.................................. 44
Interests of Named Experts and Counsel................ 44
Experts............................................... 44
Glossary.............................................. 45
Index to Financial Statements......................... F-1

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ENAMELON, INC.

1,200,000 Shares

Common Stock

PROSPECTUS

August 11, 1997