UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1999

                                       OR

___      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to _______________________

Commission File Number  1-10581

                            BENTLEY PHARMACEUTICALS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                           No. 59-1513162
-------------------------------                             --------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

              65 Lafayette Road, 3rd Floor, North Hampton, NH 03862
                (Current Address of Principal Executive Offices)


Registrant's telephone number, including area code:         (603) 964-8006
                                                    ----------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

YES  [X]       NO _____

The number of shares of the Registrant's common stock outstanding as of November
2, 1999 was 10,122,824.


<PAGE>
                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999
                                      INDEX


<TABLE>
<CAPTION>
Part I.   FINANCIAL INFORMATION                                                    PAGE
          ---------------------                                                    ----
<S>       <C>                                                                      <C>
          Item 1.  Consolidated Financial Statements:

                    Consolidated   Balance  Sheets  as  of  September  30,  1999
                    (unaudited) and December 31, 1998                                3

                    Consolidated  Statements of Operations and of  Comprehensive
                    Income  (Loss)   (unaudited)  for  the  three  months  ended
                    September  30,  1999 and  1998,  and the nine  months  ended
                    September 30, 1999 and 1998                                      4

                    Consolidated  Statement  of Changes in Common  Stockholders'
                    Equity  (unaudited)  for the nine months ended September 30,
                    1999                                                             5

                    Consolidated  Statements of Cash Flows  (unaudited)  for the
                    nine months ended September 30, 1999 and 1998                    6

                    Notes to Consolidated Financial Statements (unaudited)           8


          Item 2.   Management's Discussion and Analysis of Financial  Condition
                    and Results of Operations                                       11


          Item 3.   Quantitative  and  Qualitative Disclosures About Market Risk    18


Part II.  OTHER INFORMATION
          -----------------

          Item 2.  Changes in the Rights of the Registrant's Security Holders       20

          Item 5.  Other Information                                                21

          Item 6.  Exhibits and Reports on Form 8-K                                 21
</TABLE>


                                      -2-


<PAGE>


                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                   unaudited)
                                                                  September 30,         December 31,
                                                                      1999                 1998
                                                                  -------------         ------------
<S>                                                               <C>                   <C>
ASSETS

Current assets:
 Cash and cash equivalents                                           $4,653              $ 6,703
 Short term investments                                               1,271                    -
 Receivables                                                          3,695                3,730
 Inventories                                                          1,279                1,208
 Prepaid expenses and other                                             847                  820
                                                                     ------               ------
  Total current assets                                               11,745               12,461
                                                                     ------               ------
Fixed assets, net                                                     3,892                3,551
Drug licenses and related costs, net                                  4,751                2,433
Other non-current assets, net                                         1,630                1,873
                                                                     ------               ------
                                                                    $22,018              $20,318
                                                                     ======               ======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                  $ 2,357              $ 2,835
  Accrued expenses                                                    1,788                1,563
  Short term borrowings                                                 954                1,223
  Current portion of long term debt                                       5                    5
                                                                     ------               ------
    Total current liabilities                                         5,104                5,626
                                                                     ------               ------
Long term debt, net                                                   5,448                5,410
                                                                     ------               ------
Other non-current liabilities                                            98                  290
                                                                     ------               ------

Commitments and contingencies

Common Stockholders' Equity:
  Common tock, $.02 par  value, authorized 35,000 shares,
    issued and outstanding, 10,123 and 8,443 shares                     202                  168
  Stock purchase warrants (to purchase 4,896 and 5,928
    shares of common stock)                                             808                  556
 Additional paid-in capital                                          87,560               83,728
 Accumulated deficit                                                (75,045)             (73,858)
 Accumulated other comprehensive loss                                (2,157)              (1,602)
                                                                     ------               ------
                                                                     11,368                8,992
                                                                     ------               ------
                                                                    $22,018              $20,318
                                                                    =======               ======
</TABLE>


                The accompanying Notes to Consolidated Financial
                    Statements are an integral part of these
                              financial statements.


                                       -3-

<PAGE>
                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND OF COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)                      For the Three           For the Nine
                                                           Months Ended            Months Ended
                                                           September 30,           September 30,
                                                      ----------------------    ------------------
                                                         1999         1998         1999        1998
                                                         ----         ----         ----        ----
<S>                                                    <C>           <C>          <C>         <C>
Sales                                                   $5,187       $3,674       $14,295     $10,532
Cost of sales                                            2,062        1,585         6,070       4,480
                                                         -----        -----         -----       -----
 Gross margin                                            3,125        2,089         8,225       6,052
                                                         -----        -----         -----       -----
Operating expenses:

 Selling, general and administrative                     2,438        2,113         7,349       6,208

 Research and development                                  226           30           527          95

 Depreciation and amortization                             136           75           321         201

 Nonrecurring charge                                         -            -             -       1,176
                                                         -----        -----        ------      ------
  Total operating expenses                               2,800        2,218         8,197       7,680
                                                         -----        -----        ------      ------
Income (loss) from operations                              325        (129)            28      (1,628)

Other (income) expenses:

 Interest expense                                          291          285           860         820

 Interest income                                           (58)        (126)         (180)       (408)
                                                         -----        -----         -----       -----
Income (loss) before income taxes                           92         (288)         (652)     (2,040)

Provision (benefit) for income taxes                       280         (132)          535         320
                                                         -----        -----         -----       -----
Net loss                                                  (188)        (156)       (1,187)     (2,360)

Other comprehensive (income) loss:

  Foreign currency translation (gains) losses             (196)        (328)          555        (304)
                                                         -----        -----         -----       -----
Comprehensive income (loss)                                 $8         $172       ($1,742)    ($2,056)
                                                         =====        =====        ======       =====
Basic and diluted net loss per common share             ($0.02)      ($0.02)       ($0.14)     ($0.29)
                                                         =====        =====         =====       =====
Weighted average common shares outstanding               9,522        8,428         8,808       8,428
                                                         =====        =====         =====       =====
</TABLE>


          The accompanying Notes to Consolidated Financial Statements
              are an integral part of these financial statements.


                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                  BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
                                                    (UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                 $.02 Par Value    Additional   Accumu-     Accumulated        Other
                                                 Common Stock       Paid-In      lated     Other Compre-      Equity
                                                Shares   Amount     Capital     Deficit    hensive Loss    Transactions   Total
                                                ------   ------     -------     -------    ------------    ------------   -----
<S>                                             <C>      <C>       <C>         <C>         <C>             <C>           <C>
Balance at December 31, 1998                     8,443    $168     $83,728     ($73,858)     ($1,602)         $556       $8,992

Issuance of stock options/warrants                   -       -           -            -            -           319          319

Common Stock issued to acquire technology          585      12         838            -            -             -          850

Common Stock issued as compensation                216       4         334            -            -             -          338

Exercise of Class A redeemable warrants            859      18       2,626            -            -           (67)       2,577

Conversion of debentures                            20       -          34            -            -             -           34

Foreign currency translation adjustment              -       -           -            -         (555)            -         (555)

Net loss                                             -       -           -       (1,187)           -             -       (1,187)
                                                ------    ----     -------     ---------     --------         ----      -------
Balance at September 30, 1999                   10,123    $202     $87,560     ($75,045)     ($2,157)         $808      $11,368
                                                ======    ====     =======     =========     ========         ====      =======
</TABLE>


          The accompanying Notes to Consolidated Financial Statements
              are an integral part of these financial statements.


                                      -5-


<PAGE>
*********
                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                             `                For the Nine
                                                              Months Ended
                                                              September 30,
                                                            ------------------
(IN THOUSANDS)                                                1999      1998
                                                              ----      ----
Cash flows from operating activities:
 Net loss                                                  ($1,187)   ($2,360)
 Adjustments to reconcile net loss
    to net cash used in operating activities:
    Depreciation and amortization                              321        201
    Nonrecurring charges                                         -        158
    Other non-cash items                                       552        375
      (Increase) decrease in assets and increase
      (decrease) in liabilities:
        Receivables                                           (335)      (316)
        Inventories                                           (199)      (160)
        Prepaid expenses and other current assets             (352)      (609)
        Other assets                                           102         78
        Accounts payable and accrued expenses                   88         64
        Other liabilities                                       (2)        60
        Capitalized acquisition costs                            -        448
                                                             -----      -----
          Net cash used in operating activities             (1,012)    (2,061)
                                                             -----      -----

Cash flows from investing activities:
 Acquisition of drug delivery technology/drug licenses      (1,518)      (447)
 Purchase of short term investments                         (1,271)         -
 Additions to fixed assets, net                               (785)      (178)
                                                             -----      -----
          Net cash used in investing activities             (3,574)      (625)
                                                             -----      -----


                The accompanying Notes to Consolidated Financial
                    Statements are an integral part of these
                              financial statements.


                                       -6-


<PAGE>


                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)
                                   (UNAUDITED)

(IN THOUSANDS)
                                                           For the Nine
                                                           Months Ended
                                                           September 30,
                                                          ----------------
                                                          1999        1998
                                                          ----        ----
Cash flows from financing activities:
 Proceeds from exercise of stock options/warrants, net   $2,577      $   8
 Net (decrease) increase in short term borrowings          (174)        12
 Payments on capital leases                                  (4)        (5)
                                                          -----       ----
         Net cash provided by financing activities        2,399         15
                                                          -----       ----
Effect of exchange rate changes on cash                     137        (16)
                                                          -----       ----

Net decrease in cash and cash equivalents                (2,050)    (2,687)

Cash and cash equivalents at beginning of period          6,703     11,117
                                                         ------     ------
Cash and cash equivalents at end of period               $4,653    $ 8,430
                                                         ======     ======

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  The Registrant paid cash during the period for
  (IN THOUSANDS):

 Interest                                                  $699       $669
                                                         ======     ======
 Taxes                                                     $265       $716
                                                         ======     ======

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
  The Registrant has issued  Common Stock in exchange
    for  services  and  purchase of drug  delivery
    technology as follows (IN THOUSANDS):

 Shares                                                     801          -
                                                          =====      ======
 Amount                                                  $1,188          -
                                                          =====      ======

During the nine months ended September 30, 1999, the Registrant  issued Warrants
to purchase  450,000  shares of Common  Stock as partial  consideration  for the
purchase of drug delivery technology.  Fifty of the Registrant's 12% Convertible
Debentures  were  converted  into 20,000  shares of Common Stock during the nine
months ended September 30, 1999.

During the nine months ended September 30, 1998, the Registrant  issued Warrants
to purchase 425,000 shares of Common Stock in exchange for services.


                The accompanying Notes to Consolidated Financial
                    Statements are an integral part of these
                              financial statements.


                                       -7-


<PAGE>

                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


HISTORY AND OPERATIONS:

Bentley  Pharmaceuticals,  Inc. and its  Subsidiaries  (the  "Registrant") is an
international  pharmaceutical and drug delivery company engaged primarily in the
manufacturing,  marketing and distribution of  pharmaceutical  products in Spain
and exportation of  pharmaceutical  products to other countries.  The Registrant
develops and  registers  late stage  products,  and  manufactures,  packages and
distributes both its own and other companies' pharmaceutical products.

The strategic  focus of the  Registrant has shifted in response to the evolution
of the global health care environment.  The Registrant has moved from a research
and  development-oriented  pharmaceutical company,  developing products from the
chemistry  laboratory  through  marketing,  to  a  company  seeking  to  acquire
late-stage  development  compounds  that can be  marketed  in the near future or
currently marketed products. As a result of this transition,  the Registrant has
decreased its research and development  expenses  dramatically over the past few
years as well as implemented  cost-cutting  measures throughout the Registrant's
operations.   However,   with  the  February  1999   acquisition  of  permeation
enhancement technology,  limited development expenditures will be required prior
to entering into formal collaboration with other companies.

In  February  1999,  the  Registrant   acquired   rights  to  certain  U.S.  and
international  patents and related technology (the "Assets") covering methods to
enhance the absorption of drugs delivered to biological tissues. The acquisition
price included a cash payment of  approximately  $1.1 million,  an obligation to
issue 225,807 shares of Common Stock and ten-year  warrants to purchase  450,000
shares of common  stock.  In addition,  the  Registrant  agreed to issue 359,282
shares of Common Stock to Conrex Pharmaceutical Corporation.  The total value of
all  consideration   paid  for  the  Assets  was  approximately   $2.5  million.
Furthermore, terms of this transaction provide for certain royalty payments upon
commercialization of products using the technologies purchased.

BASIS OF CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated  financial statements of the Registrant,  at September 30, 1999
and 1998 included herein,  have been prepared by the Registrant,  without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with Generally Accepted Accounting  Principles
have  been  condensed  or  omitted.  It is  suggested  that  these  consolidated
financial  statements  be read in  conjunction  with the summary of  significant
accounting policies and the audited consolidated  financial statements and notes
thereto  included in the  Registrant's  Annual  Report on Form 10-K for the year
ended December 31, 1998.


                                      -8-
<PAGE>


The consolidated financial statements include the accounts of the Registrant and
its wholly-owned  subsidiaries:  Laboratorios  Belmac S.A.;  Bentley  Healthcare
Corporation and its wholly-owned subsidiary, Belmac Hygiene, Inc.; Belmac Health
Corporation; Belmac Holdings, Inc. and its wholly-owned subsidiary, Belmac A.I.,
Inc.; B.O.G. International Finance, Inc.; Bentley Pharma, Inc; Pharma de Espana,
Inc.;  and Belmac  Jamaica,  Ltd.  Belmac  Hygiene,  Inc.  entered  into a 50/50
partnership with Maximed Corporation of New York in March 1994. Belmac Hygiene's
participation  in the partnership is accounted for using the equity method.  All
significant  intercompany  balances have been eliminated in  consolidation.  The
financial   position  and  results  of  operations  of  the  Company's   foreign
subsidiaries  are  measured  using local  currency as the  functional  currency.
Assets and  liabilities  of foreign  subsidiaries  are translated at the rate of
exchange  in  effect  at the  end of  the  period.  Revenues  and  expenses  are
translated  at the  average  exchange  rate  for the  period.  Foreign  currency
translation gains and losses not impacting cash flows are credited to or charged
against Accumulated other comprehensive gain (loss) in the Common  Stockholders'
Equity section of the Consolidated Balance Sheets.  Foreign currency translation
gains and losses  arising  from cash  transactions  are  credited  to or charged
against current earnings.

In the opinion of management,  the accompanying unaudited consolidated financial
statements  for the period ended  September 30, 1999 and 1998 are presented on a
basis consistent with the audited consolidated financial statements for the year
ended December 31, 1998 and contain all  adjustments,  consisting only of normal
recurring  adjustments,  necessary to present fairly the Registrant's  financial
position as of September 30, 1999 and the results of its operations and its cash
flows for the nine months  ended  September  30,  1999 and 1998.  The results of
operations for the nine months ended September 30, 1999 should not be considered
indicative of the results to be expected for the year.

CASH AND CASH EQUIVALENTS:

The Registrant  considers all highly liquid investments with original maturities
of three months or less when  purchased to be cash  equivalents  for purposes of
the Consolidated  Balance Sheets and the Consolidated  Statements of Cash Flows.
Investments in securities  that do not meet the  definition of cash  equivalents
are classified as  investments  available for sale in the  Consolidated  Balance
Sheets.

INVENTORIES:

Inventories are stated at the lower of cost or market,  cost being determined on
the first in, first out ("FIFO")  method and are  comprised of the following (in
thousands):

                                    September 30, 1999      December 31, 1998
                                    ------------------      -----------------

Raw Materials                               $491                 $  505
Finished goods                               788                    703
                                           -----                  -----
                                          $1,279                 $1,208
                                           =====                  =====


                                      -9-
<PAGE>


DRUG LICENSES AND RELATED COSTS:

Drug licenses and related costs incurred in connection with acquiring  licenses,
patents,  and other proprietary rights related to the Registrant's  commercially
developed products are capitalized.  Capitalized drug licenses and related costs
are being amortized on a  straight-line  basis over fifteen years from the dates
of  acquisition.  Carrying  values of such assets are  reviewed  annually by the
Registrant and are adjusted for any diminution in value.

As  discussed  above,  the  Registrant  acquired  rights  to  certain  U.S.  and
international  patents and related  technology  in February  1999.  The purchase
price,  which  included  cash,  shares of Common  Stock and warrants to purchase
Common  Stock,  of  approximately  $2.5  million  has been  capitalized  as drug
licenses and related costs, net on the Consolidated Balance Sheets.

COMMON STOCKHOLDERS' EQUITY:

During the nine months ended  September  30, 1999,  holders of the  Registrant's
Class A Redeemable  Warrants exercised  approximately  859,000 of such warrants,
resulting in the issuance of  approximately  859,000  shares of Common Stock and
approximately  859,000  Class  B  Warrants.  The  remaining  1,252,000  Class  A
Warrants,  which were not exercised,  expired on August 16, 1999. The Registrant
received net proceeds of approximately $2,577,000.

During the nine months ended September 30, 1999, holders of the Registrant's 12%
Debentures  converted  50 of  such  Debentures,  with a net  carrying  value  of
approximately $34,000, into 20,000 shares of Common Stock.

PROVISION FOR INCOME TAXES:

The Registrant  recorded a provision for income taxes totaling  $535,000 for the
nine months ended September 30, 1999 as a result of its taxable income in Spain.
This amount differs from the amount computed by applying the U.S. federal income
tax rate of 34% to pretax  loss  primarily  as a result of the  increase  in the
valuation   allowance  to  offset  domestic  deferred  tax  assets  and  certain
nondeductible expenses in Spain.

BASIC NET LOSS PER COMMON SHARE:

Basic net loss per common  share is presented in  accordance  with  Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128).

Basic  net loss per  common  share is based on the  weighted  average  number of
shares of common stock outstanding during each period adjusted for actual shares
issued during the period. Diluted loss per common share is not presented,  as it
is antidilutive. The effect of the Registrant's outstanding stock options, stock
warrants and  convertible  debentures  were  considered  in the diluted loss per
share calculation.


                                      -10-
<PAGE>


                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
---------------------

Three  Months  Ended  September 30, 1999 versus Three Months Ended September 30,
--------------------------------------------------------------------------------
1998
----


The  Registrant  reported  revenues of $5,187,000  and a net loss of $188,000 or
$.02 per basic and diluted common share for the three months ended September 30,
1999 compared to revenues of  $3,674,000  and a net loss of $156,000 or $.02 per
basic and diluted common share for the same period in the prior year.

The 41% increase in revenues is primarily attributable to increased sales by the
Registrant's  Spanish  subsidiary,  Laboratorios  Belmac S.A., which reported an
increase in revenues of 52% in local currency; however,  fluctuations in foreign
currency exchange rates resulted in revenues for the quarter ended September 30,
1999 of $5,187,000 when translated into U.S. dollars.

Gross margins for the quarter ended September 30, 1999 improved to 60%, compared
to 57% in the  comparable  period of the prior year,  primarily as a result of a
change in the mix of products sold during the quarter  ended  September 30, 1999
compared to the quarter  ended  September 30, 1998, as well as from higher sales
volume  in the  quarter  ended  September  30,  1999,  which  resulted  in lower
manufacturing costs per unit.

Selling,  general and  administrative  expenses  increased  15% or $325,000,  to
$2,438,000 for the three months ended  September 30, 1999 compared to $2,113,000
for the same period in the prior year,  primarily  as a result of  increases  in
selling and marketing expenses.  Selling, general and administrative expenses as
a percentage  of revenues,  however,  have  improved,  decreasing to 47% for the
quarter ended September 30, 1999 from 58% in the comparable  period of the prior
year. A significant  portion of these  expenses are marketing and selling costs,
which are  necessary  for the  Registrant's  growth in sales and market share in
Spain. To the extent practical,  however, the Registrant intends to continue its
efforts to control  general and  administrative  expenses in its effort to reach
and maintain profitability.

Research  and  development  expenses  totaled  $226,000  for the  quarter  ended
September  30,  1999  compared to $30,000 for the same period of the prior year.
The increase in research  and  development  expenses is primarily  the result of
establishing a laboratory in the Registrant's new U.S. headquarters,  located in
New  Hampshire,  which is being used by the  Registrant  to develop its recently
acquired permeation enhancement technology. The minimal expenditures in research
and development reflect the Registrant's continued de-emphasis of basic research
and  redirection  of its  resources  to  developmental  expenses  necessary  for
expansion  of its  portfolio of marketed  products.  The  Registrant  intends to
continue to carefully manage its research and development expenditures; however,
future  expenditures  will be  greater  than in recent  periods  due to  planned
limited  development  expenditures  related to its recently acquired  permeation
enhancement technology.


                                      -11-
<PAGE>


Depreciation and amortization  expenses  increased 81% to $136,000 for the three
months ended September 30, 1999,  compared to $75,000 for the same period of the
prior year. The increase was primarily due to higher  depreciation  charges with
respect  to  renovations  and  improvements  at the  Registrant's  manufacturing
facility,  renovations  and the  purchase  of  equipment  to  establish  it U.S.
laboratory  and higher  amortization  charges with respect to recently  acquired
drug licenses and technologies.

Interest  expense totaled $291,000 for the three months ended September 30, 1999
compared to $285,000  for the same  period of the prior  year.  Interest  income
totaled  $58,000 for the three months  ended  September  30,  1999,  compared to
$126,000  for the same period of the prior year.  The  decrease was due to lower
short term  interest  bearing  investment  balances  during the third quarter of
1999.

The Registrant  recorded a provision for income taxes totaling  $280,000 for the
three  months  ended  September  30, 1999 as a result of higher  taxable  income
earned in Spain.  The  comparable  period of the prior year included a provision
for income taxes on taxable  income in Spain of $148,000,  offset by a refund of
U.S.  income  taxes in the amount of  $280,000,  resulting  in a net  benefit of
$132,000.

The Registrant reported income from operations of $325,000 for the quarter ended
September  30, 1999  compared to a loss from  operations of $129,000 in the same
period of the prior year. The effect of combining non-operating items, primarily
interest  expense of  $291,000,  interest  income of  $58,000  and an income tax
provision of $280,000 resulted in a net loss of $188,000,  or $.02 per basic and
diluted common share for the quarter ended  September 30, 1999,  compared to the
net loss in the  comparable  period of the prior year, of $156,000,  or $.02 per
basic and diluted  common share.  The  Registrant's  net loss of $156,000 in the
third  quarter of the prior year would have been  $280,000  higher,  or $436,000
($.05 per basic and diluted common share),  if not for the  nonrecurring  income
tax refund of $280,000.

Nine Months Ended September 30, 1999 versus Nine Months Ended September 30, 1998
--------------------------------------------------------------------------------

The Registrant  reported revenues of $14,295,000 and a net loss of $1,187,000 or
$.14 per basic and diluted common share for the nine months ended  September 30,
1999  compared to revenues of  $10,532,000  and a net loss of $2,360,000 or $.29
per basic  and  diluted  common  share  for the same  period in the prior  year.
Excluding the effect of the 1998 nonrecurring charge of $1,176,000, representing
the write-off of previously capitalized  acquisition costs, the Registrant's net
loss for the nine months ended  September 30, 1998 would have been $1,184,000 or
$.15 per basic and diluted common share.

The 36% increase in revenues is primarily attributable to increased sales by the
Registrant's  Spanish  subsidiary,  Laboratorios  Belmac S.A., which reported an
increase  in  revenues  of 41% in  local  currency  for the  nine  months  ended
September  30, 1999  compared  to the same  period in the prior  year;  however,
fluctuations  in  foreign  currency  exchange  rates  resulted  in  revenues  of
$10,532,000  when expressed in U.S.  dollars.


                                      -12-
<PAGE>


Gross margins for the nine months ended September 30, 1999 increased slightly to
58% compared to gross margins of 57% in the comparable period of the prior year,
primarily as a result of a more  favorable  mix of products sold during the nine
months ended  September 30, 1999 compared to the nine months ended September 30,
1998.

Selling,   general  and  administrative  expenses  increased  by  $1,141,000  to
$7,349,000  (51% of  revenues)  for the nine  months  ended  September  30, 1999
compared to $6,208,000  (59% of revenues) for the same period in the prior year.
A significant  portion of these expenses are marketing and selling costs,  which
are necessary for the Registrant's growth in sales and market share in Spain. In
addition,  certain  nonrecurring  compensation  charges were recorded during the
nine months ended  September 30, 1999,  which  represent  bonuses in the form of
Common Stock, in lieu of cash,  issued to executive  officers of the Registrant.
To the extent practical, however, the Registrant intends to continue its efforts
to control general and administrative  expenses as part of its austerity program
in its effort to reach and maintain profitability.

Research  and  development  expenses  were  $527,000  for the nine months  ended
September  30,  1999  compared to $95,000 for the same period of the prior year.
The increase in research  and  development  expenses is primarily  the result of
establishing a laboratory in the Registrant's new U.S. headquarters,  located in
New  Hampshire.  This  laboratory is being used by the Registrant to develop its
recently acquired permeation enhancement technology. The minimal expenditures in
research and development reflect the Registrant's continued de-emphasis of basic
research and redirection of its resources to  developmental  expenses  necessary
for expansion of its portfolio of marketed  products.  The Registrant intends to
continue to carefully manage its research and development expenditures.

Depreciation  and  amortization  expenses  totaled  $321,000 for the nine months
ended September 30, 1999,  compared to $201,000 for the same period of the prior
year. The increase was primarily due to higher depreciation charges with respect
to renovations and  improvements  at the  Registrant's  manufacturing  facility,
renovations  and  purchase of equipment to  establish  its U.S.  laboratory  and
higher amortization  charges with respect to recently acquired drug licenses and
technologies.

Included in operating expenses for the nine months ended September 30, 1998 is a
nonrecurring charge of $1,176,000,  which represents the previously  capitalized
costs specific to the abandoned  Schwarz Pharma and other related  acquisitions.
These  costs  were  written  off  during  the  second   quarter  of  1998  after
negotiations ended during May 1998.

Interest  expense totaled  $860,000 for the nine months ended September 30, 1999
compared to $820,000 for the same period of the prior year.  Interest income was
$180,000 for the nine months ended  September  30, 1999 compared to $408,000 for
the same  period of the prior year.  The  decrease  was due to lower  short-term
interest bearing investment  balances during the nine months ended September 30,
1999.

The Registrant  recorded a provision for income taxes totaling  $535,000 for the
nine months ended  September  30, 1999 as a result of taxable  income  earned in
Spain compared to $320,000 in the


                                      -13-
<PAGE>


same period of the prior year,  which includes a refund of U.S.  income taxes in
the amount of  $280,000.  The prior year  provision  for income taxes would have
totaled $600,000, if not for the U.S. income tax refund.

The Registrant  reported  income from  operations of $28,000 for the nine months
ended  September 30, 1999 compared to a loss of $1,628,000 in the same period of
the  prior  year.   Excluding  the  effect  of  the  nonrecurring   charge,  the
Registrant's  loss from  operations for the nine months ended September 30, 1998
would have been $452,000. The effect of combining non-operating items, primarily
interest  expense of $860,000,  interest  income of $180,000 and  provision  for
income taxes of $535,000 resulted in a net loss of $1,187,000, or $.14 per basic
and diluted common share for the nine months ended September 30, 1999,  compared
to the net loss in the comparable  period of the prior year, of  $2,360,000,  or
$.29 per basic and diluted common share. Excluding the 1998 nonrecurring charge,
the prior year net loss for the nine months ended  September 30, 1998 would have
been $1,184,000 or $.15 per basic and diluted common share.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Total assets  increased from  $20,318,000 at December 31, 1998 to $22,018,000 at
September 30, 1999, while Common  Stockholders' Equity increased from $8,992,000
at December  31, 1998 to  $11,368,000  at September  30,  1999.  The increase in
Common  Stockholders'  Equity reflects  primarily the  Registrant's  issuance of
approximately 585,000 shares of Common Stock and 450,000 stock purchase warrants
as  a  result  of  the  February  1999  acquisition  of  permeation  enhancement
technology,  issuance of 150,000 shares of Common Stock to executive officers of
the Registrant, which shares represent bonuses in lieu of cash, and the exercise
of  approximately  859,000  Class A Warrants  during the third  quarter of 1999,
offset  by the  loss  incurred  by the  Registrant  for the  nine  months  ended
September  30, 1999 and the negative  impact of the  fluctuation  of the Spanish
peseta (and related euro) exchange rate on the foreign currency translation.

The Registrant's  working capital decreased from $6,835,000 at December 31, 1998
to  $6,641,000  at September  30,  1999,  primarily as a result of the loss from
operations  incurred by the Registrant during the period and use of cash for the
acquisition   of  permeation   enhancement   technology  in  the  U.S.  and  for
manufacturing  facility renovations in Spain,  partially offset by cash received
from the exercise of  approximately  859,000  Class A Warrants  during the third
quarter of 1999.

Cash and cash  equivalents  decreased  from  $6,703,000  at December 31, 1998 to
$4,653,000  at  September  30,  1999,  primarily  as a result of using  cash for
operating activities, purchase of permeation enhancement technology,  renovation
of the  manufacturing  facility in Spain and  establishing  a laboratory  in the
U.S.,  which  was  partially  offset  by cash  received  from  the  exercise  of
approximately  859,000 Class A Warrants, a portion of which was used to purchase
short term  investments.  Included in cash and cash equivalents at September 30,
1999 are  approximately  $4,179,000 of short term  investments  considered to be
cash  equivalents.  There  are  also  approximately  $1,271,000  of  short  term
investments  at September 30, 1999,  which were  purchased with a portion of the
cash received from the exercise of approximately 859,000 Class A Warrants during
the quarter ended September 30, 1999.


                                      -14-
<PAGE>


Accounts  receivable  decreased slightly from $3,730,000 at December 31, 1998 to
$3,695,000 at September 30, 1999.  Although sales have increased during the nine
months ended September 30, 1999,  this was offset by increased cash  collections
during  this  period  and the  effect of the  fluctuation  in  foreign  currency
exchange  rates.  The Registrant  has not  experienced  any material  delinquent
accounts.  Inventories increased to $1,279,000 at September 30, 1999 compared to
$1,208,000  at December 31, 1998.  Prepaid  expenses  and other  current  assets
increased from $820,000 at December 31, 1998 to $847,000 at September 30, 1999.

The  combined  total of accounts  payable and accrued  expenses  decreased  from
$4,398,000 at December 31, 1998 to  $4,145,000 at September 30, 1999,  primarily
as a result of payment of liabilities,  offset by an increase in the accrual for
income taxes payable and fluctuations in foreign currency exchange rates.  Short
term  borrowings  decreased from  $1,223,000 at December 31, 1998 to $954,000 at
September 30, 1999, as a result of lower outstanding balances on lines of credit
used for operating  purposes in Spain and the effect of  fluctuation  in foreign
currency exchange rates.

Fixed assets,  net increased from  $3,551,000 at December 31, 1998 to $3,892,000
at September 30, 1999, due primarily to renovations at the Spanish manufacturing
facility  and  establishing  a  laboratory  in the  U.S.,  partially  offset  by
recurring  depreciation  charges  and the  effect  of  fluctuations  in  foreign
currency exchange rates.

Drug licenses and related costs,  net increased from  $2,433,000 at December 31,
1998 to  $4,751,000  at September  30, 1999,  primarily due to the February 1999
acquisition  of  permeation  enhancement  technology,  which was purchased for a
combination  of cash,  shares of the  Registrant's  Common Stock and issuance of
stock purchase warrants and other drug licenses,  partially offset by the effect
of fluctuations in foreign  currency  exchange rates and recurring  amortization
charges.

Other  non-current  assets  decreased  from  $1,873,000  at December 31, 1998 to
$1,630,000 at September 30, 1999, primarily due to the effect of fluctuations in
foreign currency exchange rates and recurring amortization charges.

Long term debt increased  from  $5,410,000 at December 31, 1998 to $5,448,000 at
September 30, 1999, due primarily to accretion recorded on the Debentures issued
in the Registrant's February 1996 public offering. Other non-current liabilities
decreased  from  $290,000 at December 31, 1998 to $98,000 at September 30, 1999,
primarily as a result of the issuance of  approximately  66,000 shares of Common
Stock as compensation to a consultant.

Investing  activities,  primarily the  acquisition of drug delivery  technology,
capital  improvements  to the  manufacturing  facility in Spain,  establishing a
laboratory in the U.S. and the purchase of short term  investments used net cash
of  $3,574,000  during the nine  months  ended  September  30,  1999.  Financing
activities,  primarily the exercise of approximately  859,000 Class A Redeemable
Warrants,  partially  offset by repayment of short term  borrowings for the nine
months ended  September 30, 1999,  provided net cash of $2,399,000 and operating
activities  for the  nine  months  ended  September  30,  1999  used net cash of
$1,012,000.




                                      -15-
<PAGE>


Given the Registrant's  current  liquidity and cash balances and considering its
future strategic plans, the Registrant should have sufficient  liquidity to fund
operations  into the year 2001,  which should be a sufficient time frame for the
Registrant to advance its strategic  objectives  and generate  revenues and cash
flow to support the Registrant's  cash  requirements.  However,  there can be no
assurance  that these  objectives or revenues will be attained.  The  Registrant
continues to explore alternative sources for financing its business  activities.
In appropriate situations, that will be strategically determined, the Registrant
may seek financial  assistance  from other sources,  including  contribution  by
others to joint ventures and other  collaborative or licensing  arrangements for
the  development,   testing,  manufacturing  and  marketing  of  products  under
development and the sale of certain of the assets of, or its subsidiaries.

IMPACT OF THE YEAR 2000 ISSUE
-----------------------------

The Year 2000 Issue has arisen because many existing  computer programs use only
the last two digits of any  particular  year,  rather than all four  digits,  to
identify that year. These computer programs cannot properly  distinguish between
the years 1900 and 2000 or 1901 and 2001, for example.  If not  corrected,  many
computer  applications  could fail or create  erroneous  results.  The Year 2000
Issue can affect  information  technology  ("IT") as well as non-IT systems.  In
fact,  many  non-IT  systems  typically  include  imbedded  technology  such  as
microcontrollers. These types of systems are more difficult to assess and repair
than IT systems.  It may even be  necessary  to replace  non-IT  systems if they
cannot be modified. The extent of the potential impact of the Year 2000 Issue is
not yet known, and if not timely corrected, could affect the global economy.

The Registrant  has  recognized the need to ensure that its business  operations
will not be  adversely  impacted by the Year 2000 Issue and is aware of the time
sensitive  nature of the problem.  As a result,  the Registrant has completed an
assessment  of how it may be  impacted by the Year 2000  Issue.  The  Registrant
engaged  information  system consultants to evaluate its systems and technology.
The  Registrant's  assessment  process  included  a review  of its IT as well as
non-IT systems.  The Registrant has also considered the potential  impact on its
operations  and business  model in the event that third parties with whom it has
material relationships fail to resolve their own Year 2000 issues.

The  Registrant  completed  its  assessment  phase of the Year 2000 Issue.  As a
result, it was determined that certain IT systems (hardware and software) needed
upgrading or replacing.  The Registrant has completed the remediation project of
upgrading and/or replacing its IT systems where  appropriate.  In addition,  the
Registrant  is in the  process of  installing  a new IT system at its  operating
subsidiary in Spain, at a total  approximate  cost of $70,000,  all of which has
been incurred and  capitalized  to date.  This project was not  accelerated  nor
precipitated by the Year 2000 Issue; however, it is anticipated that all aspects
of the new system are Year 2000 compliant.  Such expenditures have been budgeted
and are being  funded from  operations.  The new system has been  installed  and
tested and began operating on November 1, 1999. Management of the Registrant has
also  conducted a review of its non-IT  systems and has concluded that it is not
materially exposed to non-IT system risks.


                                      -16-
<PAGE>


The Registrant has polled its significant suppliers, service providers and other
third parties with whom it has material relationships to determine the extent to
which it is  vulnerable  to a  failure  of any such  third  party to  adequately
address its own Year 2000 Issue.  The  Registrant  has received  responses  from
substantially all of such parties. No additional risks have been identified as a
result  of  the  responses  received.   External  consultants  have  tested  the
Registrant's systems and have determined that its existing  upgraded/replaced IT
systems are now Year 2000 compliant.

In the  view of  management  of the  Registrant,  not only is it  possible  that
management  may not  have  access  to  vital  information  which is used to make
management  decisions,  but the manufacturing  process could even be interrupted
due to unavailability of raw materials or inoperable equipment and/or systems if
the Registrant's assessment and remediation program was not successful.

There can be no  guarantee  that the  systems  of other  companies  on which the
Registrant's systems rely will be timely converted, or that a failure to convert
by another company,  or a conversion that is incompatible  with the Registrant's
systems,  would  not have a  material  adverse  effect  on the  Registrant.  The
Registrant  has  determined it has no exposure to  contingencies  related to the
Year 2000  Issue for the  products  it has sold or  anticipates  selling  in the
future.

Although the Registrant  cannot  determine the severity with which the Year 2000
issue will affect,  either directly or indirectly,  the Registrant's  operations
and financial  condition,  the Registrant  believes the most  reasonably  likely
worst case scenario in the event the  Registrant or its  significant  customers,
vendors,  or  service  providers  fail to resolve  the Year 2000 issue  would be
inability on the part of the Registrant to manufacture,  market,  and distribute
its  products  and  receive  revenues  from  the  sale  of such  products  for a
substantial  period of time following the commencement of the Year 2000. Factors
that could cause material differences in results,  many of which are outside the
control of the  Registrant,  include,  but are not limited to, the  Registrant's
ability to identify and correct all relevant computer software,  the accuracy of
representations by manufacturers of the Registrant's systems that their products
are Year 2000 compliant, the ability of the Registrant's customers,  vendors and
service  providers  to identify  and resolve  their own Year 2000 issues and the
Registrant's  ability to respond to and dedicate  adequate  resources to resolve
unforeseen complications arising as a result of the Year 2000 issue.

Although the  Registrant  continues to focus on the Year 2000 issue and believes
that  it is now  Year  2000  compliant,  the  Registrant  is in the  process  of
finalizing a contingency  plan  intended to mitigate the possible  disruption in
business operations that may result from the Year 2000 issue.  Contingency plans
to address the most  reasonably  likely worst case scenario  described above may
include the purchase of alternative  hardware and software and other appropriate
measures.  Such plans will not,  however,  guarantee  that no  material  adverse
effects will occur.

The  Registrant  completed its Year 2000 project in October 1999 at a total cost
of  approximately  $85,000  excluding  the new IT system in Spain.  Of the total
project  cost,  approximately  $35,000 was  attributable  to the purchase of new
hardware and software,  which has been capitalized.  The Registrant incurred and
expensed  approximately  $50,000  related to the assessment of,  remediation and
testing for compliance with its Year 2000 project.


                                      -17-
<PAGE>


Because of the  importance of the potential  impact of the Year 2000 Issue,  the
Registrant  is finalizing  contingency  plans to address any issues that may not
have been corrected by implementation of the Registrant's Year 2000 project in a
timely  manner.  Such  contingency  plans  may  include  considerations  such as
increasing  inventories  of raw  materials,  production  of greater  than normal
quantities of finished goods, and implementation of manual back-up systems where
appropriate.

DERIVATIVE INSTRUMENTS AND HEDGING
----------------------------------

Statement of Financial  Accounting  Standards No. 133 "Accounting for Derivative
Instruments  and  Hedging  Activities"  (SFAS  133) was  issued in June 1998 and
establishes  accounting  and  reporting  standards for  derivative  instruments,
including   certain   derivative   instruments   embedded  in  other   contracts
(collectively  referred  to as  derivatives)  and  for  hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities  in the balance sheet and measure these  instruments  at fair value.
The accounting for changes in the fair value of a derivative (that is, gains and
losses)   depends  upon  the  intended  use  of  the  derivative  and  resulting
designation  if used as a hedge.  The FASB has  delayed  the date for  mandatory
adoption and  implementation  of SFAS 133.  SFAS 133 is effective for all fiscal
quarters of fiscal years  beginning  after June 15, 2000, and is not intended to
be applied retroactively.  Management does not believe that the adoption of SFAS
133 will have a significant  impact on the Registrant's  consolidated  financial
statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------

Foreign Currency
----------------

A substantial amount of the Registrant's  business is conducted in Europe and is
therefore  influenced  by the  extent  to which  there are  fluctuations  in the
dollar's value against other  currencies,  specifically the euro and the peseta.
On January 1, 1999,  the euro became the official  currency of 11 European Union
(EU)  member  states  with  a  fixed  conversion  rate  against  their  national
currencies.  The value of the euro against the dollar and all other  currencies,
including those of the four EU member states that are not  participating  in the
eurozone, will fluctuate according to market conditions. Although euro notes and
coins will not appear  until  January 1, 2002,  the new  currency can be used by
consumers, retailers, companies and public administrations from January 1, 1999,
in the form of "written money," i.e. by means of checks, traveler's checks, bank
transfers,  credit card  transactions,  etc. The permanent  value of one euro is
fixed at 166.39  pesetas.  The exchange  rate at September 30, 1999 and December
31,  1998 was 156.17 and  141.97  pesetas  per U.S.  dollar,  respectively.  The
weighted  average exchange rate for the nine months ended September 30, 1999 and
1998 was 154.78 and 154.27 pesetas per U.S. dollar, respectively.

The effect of foreign  currency  fluctuations  on assets and liabilities for the
nine  months  ended  September  30,  1999 was a  decrease  of  $555,000  and the
cumulative  historical effect was a decrease of $2,157,000,  as reflected in the
Registrant's  Consolidated  Balance Sheets in the "Liabilities and Stockholders'
Equity" section titled Accumulated other  comprehensive  loss. Although exchange
rates recently  fluctuated  significantly,  the Registrant does not believe that
the effect of foreign  currency


                                      -18-
<PAGE>


fluctuation  is  material  to the  Registrant's  results  of  operations  as the
expenses  related to much of the Registrant's  foreign currency  revenues are in
the same currency as such  revenues.  However,  the carrying value of assets and
reported  values can be  materially  impacted by foreign  currency  translation.
Nonetheless,  the Registrant does not plan to modify its business practices. The
Registrant has relied primarily upon financing activities to fund the operations
of the  Registrant  in the United  States.  In the event that the  Registrant is
required to fund United States  operations or cash needs with funds generated in
Spain,  currency rate fluctuations in the future could have a significant impact
on the  Registrant.  However,  at the  present  time,  the  Registrant  does not
anticipate  altering its business  plans and practices to compensate  for future
currency fluctuations.

CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF THE "SAFE  HARBOR"  PROVISIONS  OF THE
--------------------------------------------------------------------------------
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
------------------------------------------------

The  statements  contained in this  Quarterly  Report on Form 10-Q which are not
historical  facts contain  forward  looking  information  with respect to plans,
projections  or future  performance of the  Registrant,  the occurrence of which
involve certain risks and uncertainties that could cause the Registrant's actual
results to differ  materially from those expected by the  Registrant,  including
that it could be  required  to cut back or stop  operations  if it is  unable to
raise or obtain needed funding; a history of losses; that successful development
of current and future  products is uncertain;  that  clinical  trial results may
result in failure to obtain regulatory  approval and inability to sell products;
that its patent position is uncertain and its success depends on its proprietary
rights;  that it may have to lower  prices or spend  more  money to  effectively
compete against  companies with greater  resources,  which could result in lower
revenues and/or profits;  that rapid technological  change may result in product
obsolescence  before a  significant  portion of the related  costs are recouped;
product  liability;  doing  business  outside  of the  United  States;  that its
computer  system  may not  recognize  the Year 2000,  which may affect  computer
systems  and  disrupt  its  business;  and other  uncertainties  detailed in the
Registrant's  Registration  Statement  on Form  S-3  (SEC  Commission  file  No.
333-80729)  declared effective by the Securities and Exchange Commission on July
22, 1999 and any amendments thereto.


                                      -19-
<PAGE>


PART II.  OTHER INFORMATION
          -----------------

          ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS
                    -----------------------------------------

         On June  30,  1999,  the  shareholders  of the  Registrant  approved  a
proposal that authorized the change of the  Registrant's  state of incorporation
from Florida to Delaware  and adoption of a  certificate  of  incorporation  and
by-laws,  which  conform  to  Delaware  law  as  well  as  adoption  of  various
anti-takeover  provisions.  Effective October 29, 1999, such reincorporation was
completed  by merging the  Registrant  with and into  Bentley  Pharma,  Inc.,  a
Delaware  corporation,  which was a  wholly-owned  subsidiary of the  Registrant
("Bentley-Delaware"), with Bentley-Delaware being the surviving entity.

         This  reincorporation/merger,  in effect,  caused the  Registrant to be
reincorporated in Delaware. On the effective date of the reincorporation/merger,
each issued and  outstanding  share of Common Stock was  converted  into one (1)
share of Common  Stock,  $.02 par value  per share of  Bentley-Delaware.  On the
effective date of the reincorporation/merger,  Bentley-Delaware succeeded to all
of the assets,  liabilities  and business of the Registrant and possesses all of
the rights and powers of the  Registrant.  The business of the  Registrant  will
continue to operate under the name, "Bentley Pharmaceuticals, Inc." The officers
and directors of Bentley-Delaware  are the same as the officers and directors of
the Registrant. Stockholders of Bentley-Delaware,  as stockholders of a Delaware
corporation,  will,  in general,  have the same rights  that they  possessed  as
stockholders of the Registrant, a Florida corporation,  although certain changes
are  inherent  in being  incorporated  in Delaware  rather than in Florida.  The
Registrant  has filed  Amendment No. 1 on Form 8-A/A on October 29, 1999,  which
sets forth a  description  of the  Common  Stock of  Bentley-Delaware,  which is
hereby incorporated by reference.  The  reincorporation/merger  had no effect on
the rights of holders of its 12% Debentures or Class B Warrants, other than that
holders  thereof will  receive  shares of Common  Stock of  Bentley-Delaware,  a
Delaware corporation,  rather than of Bentley  Pharmaceuticals,  Inc., a Florida
corporation, upon conversion or exercise, respectively.

         In connection with the reincorporation/merger, Bentley-Delaware adopted
a Restated  Certificate of Incorporation  and Amended Restated  By-Laws.  On the
effective date of the reincorporation/merger,  each issued and outstanding share
of  Common   Stock   was   automatically   converted   into  one  (1)  share  of
Bentley-Delaware  Common  Stock.  Stockholders  may,  but are not  required  to,
surrender their present Common Stock  certificates to the Registrant's  Transfer
Agent,  American  Stock Transfer and Trust  Company,  Inc., 40 Wall Street,  New
York,  NY  10005,  so  that  replacement  certificates  representing  shares  of
Bentley-Delaware  Common Stock may be issued in exchange therefor.  Certificates
representing Common Stock should not be destroyed or returned to the Registrant.


                                      -20-
<PAGE>


ITEM 5.  OTHER INFORMATION
         -----------------

         The Registrant relocated its corporate headquarters to New Hampshire in
June 1999. All future correspondence should be addressed to:

                   Bentley Pharmaceuticals, Inc.
                   65 Lafayette Road, 3rd Floor
                   North Hampton, NH 03862
                   Telephone: 603.964.8006
                   Facsimile: 603.964.6889
                   www.bentleypharm.com

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

          (a)  Exhibits:

               3.1  Copy of Registrant's  Restated  Certificate of Incorporation
                    (Incorporated by reference to Appendix B to the Registrant's
                    Definitive   Proxy   Statement   for   Annual   Meeting   of
                    Stockholders   filed  with  the   Securities   and  Exchange
                    Commission on May 18, 1999.)

               3.2  Copy  of   Registrant's   Amended   and   Restated   By-Laws
                    (Incorporated by reference to Appendix C to the Registrant's
                    Proxy  Statement for Annual  Meeting of  Stockholders  filed
                    with  the  Securities  and  Exchange  Commission  on May 18,
                    1999.)

               27.1 Financial Data Schedule (Filed herewith.)

         (b)   Reports on Form 8-K filed during the quarter ended September  30,
1999:

                    None.

          The  Registrant  has not filed any reports on Form 8-K  subsequent  to
September 30, 1999.

All  other  items  required  in Part II have  been  previously  filed or are not
applicable for the quarter ended September 30, 1999.


                                      -21-
<PAGE>


                                   SIGNATURES
                                   ----------


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                         BENTLEY PHARMACEUTICALS, INC.
                                         ---------------------------------------
                                         Registrant


November 2, 1999                    By:  /s/ James R. Murphy
                                         ---------------------------------------
                                         James R. Murphy
                                         Chairman, President and Chief Executive
                                           Officer
                                         (principal executive officer)


November 2, 1999                   By:   /s/ Michael D. Price
                                         ---------------------------------------
                                         Michael D. Price
                                         Vice President, Chief Financial
                                         Officer, Treasurer and Secretary
                                         (principal financial and accounting
                                         officer)